10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission file number 001-11290

NNN REIT, INC.

(Exact name of registrant as specified in its charter)

Maryland	56-1431377
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

450 South Orange Avenue, Suite 900

Orlando, Florida 32801

(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (407) 265-7348

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol(s):	Name of exchange on which registered:
Common Stock, $0.01 par value	NNN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 29, 2024, the registrant had 183,660,240 shares of common stock, $0.01 par value, outstanding.

TABLE OF CONTENTS

		PAGE
Part I – Financial Information
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income and Comprehensive Income	2
	Condensed Consolidated Statements of Equity	3
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
Part II – Other Information
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	35
Signatures		37

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NNN REIT, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

	June 30, 2024			December 31, 2023
	(unaudited)
ASSETS
Real estate portfolio, net of accumulated depreciation and amortization	$	8,586,936		$	8,535,851
Cash and cash equivalents		2,130			1,189
Restricted cash and cash held in escrow		14,672			3,966
Receivables, net of allowance of $639 and $669, respectively		2,551			3,649
Accrued rental income, net of allowance of $4,087 and $4,168, respectively		33,956			34,611
Debt costs, net of accumulated amortization of $25,552 and $23,952, respectively		10,460			3,243
Other assets		76,590			79,459
Total assets	$	8,727,295		$	8,661,968
LIABILITIES AND EQUITY
Liabilities:
Line of credit payable	$	12,000		$	132,000
Notes payable, net of unamortized discount and unamortized debt costs		4,370,807			4,228,544
Accrued interest payable		30,931			34,374
Other liabilities		118,635			109,593
Total liabilities		4,532,373			4,504,511
Equity:
Stockholders' equity:
Common stock, $0.01 par value. Authorized 375,000,000 shares; 183,666,067 and     182,474,770 shares issued and outstanding, respectively		1,838			1,826
Capital in excess of par value		5,012,642			4,971,625
Accumulated deficit		(810,689	)		(805,883	)
Accumulated other comprehensive income (loss)		(8,869	)		(10,111	)
Total equity		4,194,922			4,157,457
Total liabilities and equity	$	8,727,295		$	8,661,968

See accompanying notes to condensed consolidated financial statements.

1

NNN REIT, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(dollars in thousands, except per share data)

(unaudited)

	Quarter Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenues:
Rental income	$	216,140		$	202,426		$	430,965		$	406,056
Interest and other income from real estate transactions		673			214			1,255			692
		216,813			202,640			432,220			406,748
Operating expenses:
General and administrative		11,789			10,740			24,373			22,991
Real estate		6,758			6,836			13,912			13,682
Depreciation and amortization		62,503			59,875			123,118			119,023
Leasing transaction costs		20			52			53			127
Impairment losses – real estate, net of recoveries		944			34			2,148			2,674
Executive retirement costs		153			309			470			732
		82,167			77,846			164,074			159,229
Gain on disposition of real estate		17,621			13,930			22,442			20,230
Earnings from operations		152,267			138,724			290,588			267,749
Other expenses (revenues):
Interest and other income		(976	)		(74	)		(1,095	)		(107	)
Interest expense		46,577			40,094			90,646			78,985
		45,601			40,020			89,551			78,878
Net earnings	$	106,666		$	98,704		$	201,037		$	188,871
Net earnings per share:
Basic	$	0.58		$	0.54		$	1.10		$	1.04
Diluted	$	0.58		$	0.54		$	1.10		$	1.04
Weighted average shares outstanding:
Basic		182,438,791			181,092,031			182,119,471			180,969,809
Diluted		182,807,374			181,627,857			182,528,333			181,544,275
Other comprehensive income:
Net earnings	$	106,666		$	98,704		$	201,037		$	188,871
Amortization of interest rate hedges		610			616			1,242			1,223
Total comprehensive income	$	107,276		$	99,320		$	202,279		$	190,094

See accompanying notes to condensed consolidated financial statements.

2

NNN REIT, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Quarter Ended June 30, 2024

(dollars in thousands, except per share data)

(unaudited)

	Common Stock		Capital in   Excess of Par Value			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balances at March 31, 2024	$	1,835	$	4,996,698		$	(814,196	)	$	(9,479	)	$	4,174,858
Net earnings		—		—			106,666			—			106,666
Dividends declared and paid:
$0.5650 per share of common stock		—		570			(103,159	)		—			(102,589	)
Issuance of common stock:
9,655 shares – director compensation		—		319			—			—			319
1,204 shares – stock purchase plan		—		51			—			—			51
303,443 shares – ATM equity program		3		12,799			—			—			12,802
Stock issuance costs		—		(132	)		—			—			(132	)
Amortization of deferred compensation		—		2,337			—			—			2,337
Amortization of interest rate hedges		—		—			—			610			610
Balances at June 30, 2024	$	1,838	$	5,012,642		$	(810,689	)	$	(8,869	)	$	4,194,922

See accompanying notes to condensed consolidated financial statements.

3

NNN REIT, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY – CONTINUED

Quarter Ended June 30, 2023

(dollars in thousands, except per share data)

(unaudited)

	Common Stock		Capital in   Excess of Par Value			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total  Equity
Balances at March 31, 2023	$	1,822	$	4,948,024		$	(802,999	)	$	(11,975	)	$	4,134,872
Net earnings		—		—			98,704			—			98,704
Dividends declared and paid:
$0.5500 per share of common stock		—		731			(99,745	)		—			(99,014	)
Issuance of common stock:
7,623 shares – director compensation		—		270			—			—			270
1,444 shares – stock purchase plan		—		62			—			—			62
300,326 shares – ATM equity program		3		12,779			—			—			12,782
Stock issuance costs		—		(264	)		—			—			(264	)
Amortization of deferred compensation		—		2,206			—			—			2,206
Amortization of interest rate hedges		—		—			—			616			616
Balances at June 30, 2023	$	1,825	$	4,963,808		$	(804,040	)	$	(11,359	)	$	4,150,234

See accompanying notes to condensed consolidated financial statements.

4

NNN REIT, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY – CONTINUED

Six Months Ended June 30, 2024

(dollars in thousands, except per share data)

(unaudited)

	Common Stock		Capital in   Excess of Par Value			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balances at December 31, 2023	$	1,826	$	4,971,625		$	(805,883	)	$	(10,111	)	$	4,157,457
Net earnings		—		—			201,037			—			201,037
Dividends declared and paid:
$1.130 per share of common stock		—		1,306			(205,843	)		—			(204,537	)
Issuance of common stock:
19,224 shares – director compensation		—		639			—			—			639
1,987 shares – stock purchase plan		—		83			—			—			83
803,443 shares – ATM equity program		8		33,719			—			—			33,727
349,975 restricted shares – net of forfeitures		4		(4	)		—			—			—
Stock issuance costs		—		(310	)		—			—			(310	)
Amortization of deferred compensation		—		5,584			—			—			5,584
Amortization of interest rate hedges		—		—			—			1,242			1,242
Balances at June 30, 2024	$	1,838	$	5,012,642		$	(810,689	)	$	(8,869	)	$	4,194,922

See accompanying notes to condensed consolidated financial statements.

5

NNN REIT, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY – CONTINUED

Six Months Ended June 30, 2023

(dollars in thousands, except per share data)

(unaudited)

	Common Stock		Capital in   Excess of Par Value			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balances at December 31, 2022	$	1,815	$	4,928,034		$	(793,765	)	$	(12,582	)	$	4,123,502
Net earnings		—		—			188,871			—			188,871
Dividends declared and paid:
$1.100 per share of common stock		—		1,455			(199,146	)		—			(197,691	)
Issuance of common stock:
15,806 shares – director compensation		—		539			—			—			539
3,576 shares – stock purchase plan		—		160			—			—			160
650,135 shares – ATM equity program		7		29,143			—			—			29,150
255,667 restricted shares – net of forfeitures		3		(3	)		—			—			—
Stock issuance costs		—		(558	)		—			—			(558	)
Amortization of deferred compensation		—		5,038			—			—			5,038
Amortization of interest rate hedges		—		—			—			1,223			1,223
Balances at June 30, 2023	$	1,825	$	4,963,808		$	(804,040	)	$	(11,359	)	$	4,150,234

See accompanying notes to condensed consolidated financial statements.

6

NNN REIT, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(unaudited)

	Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net earnings	$	201,037		$	188,871
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		123,118			119,023
Impairment losses – real estate, net of recoveries		2,148			2,674
Amortization of notes payable discount		1,384			869
Amortization of debt costs		3,088			2,401
Amortization of mortgages payable premium		—			(21	)
Amortization of interest rate hedges		1,242			1,223
Gain on disposition of real estate		(22,442	)		(20,230	)
Performance incentive plan expense		6,852			6,290
Performance incentive plan payment		(1,274	)		(916	)
Change in operating assets and liabilities, net of assets acquired and liabilities assumed:
Decrease in receivables		1,098			550
Decrease (increase) in accrued rental income		131			(1,003	)
Increase in other assets		(1,602	)		(721	)
Increase (decrease) in accrued interest payable		(3,443	)		953
Increase (decrease) in other liabilities		61			(721	)
Other		(204	)		52
Net cash provided by operating activities		311,194			299,294
Cash flows from investing activities:
Proceeds from the disposition of real estate		86,268			40,450
Additions to real estate		(224,986	)		(327,739	)
Principal payments received on mortgages and notes receivable		344			324
Other		(974	)		(1,144	)
Net cash used in investing activities		(139,348	)		(288,109	)

See accompanying notes to condensed consolidated financial statements.

7

NNN REIT, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED

(dollars in thousands)

(unaudited)

	Six Months Ended June 30,
	2024			2023
Cash flows from financing activities:
Proceeds from line of credit payable	$	408,000		$	513,500
Repayment of line of credit payable		(528,000	)		(347,200	)
Repayment of mortgages payable		—			(9,947	)
Proceeds from notes payable		493,840			—
Repayment of notes payable		(350,000	)		—
Payment of debt issuance costs		(13,014	)		(125	)
Proceeds from issuance of common stock		35,116			30,765
Stock issuance costs		(298	)		(558	)
Payment of common stock dividends		(205,843	)		(199,146	)
Net cash used in financing activities		(160,199	)		(12,711	)
Net increase (decrease) in cash, cash equivalents and restricted cash(1)		11,647			(1,526	)
Cash, cash equivalents and restricted cash at beginning of period(1)		5,155			6,778
Cash, cash equivalents and restricted cash at end of period(1)	$	16,802		$	5,252
Supplemental disclosure of cash flow information:
Interest paid, net of amount capitalized	$	91,851		$	74,686
Supplemental disclosure of noncash investing and financing activities:
Change in other comprehensive income	$	1,242		$	1,223
Right-of-use asset recorded in connection with lease liability	$	—		$	6,401
Change in work in progress accrual	$	10,048		$	8,986

(1) Cash, cash equivalents and restricted cash is the aggregate of cash and cash equivalents and restricted cash and cash held in escrow from the Condensed Consolidated Balance Sheets. As of June 30, 2024, December 31, 2023 and June 30, 2023, NNN had restricted cash of $14,672, $3,966 and $2,971, respectively.

See accompanying notes to condensed consolidated financial statements.

8

NNN REIT, INC.

and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024

(Unaudited)

Note 1 – Organization and Summary of Significant Accounting Policies:

Organization and Nature of Business. NNN REIT, Inc., a Maryland corporation, is a fully integrated real estate investment trust (“REIT”) formed in 1984. The term "NNN" or the "Company" refers to NNN REIT, Inc. and all of its consolidated subsidiaries. NNN may elect to treat certain of its subsidiaries as taxable REIT subsidiaries ("TRS").

NNN's assets primarily include real estate assets. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment ("Properties" or "Property Portfolio", or individually a "Property").

	June 30, 2024
Property Portfolio:
Total Properties	3,548
Gross leasable area (square feet)	36,095,000
States	49
Weighted average remaining lease term (years)	10.0

NNN's operations are reported within one reportable segment in the unaudited condensed consolidated financial statements and all properties are considered part of the Properties or Property Portfolio. As such, property counts and calculations involving property counts reflect all NNN Properties.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles. The unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. Operating results for the quarter and six months ended June 30, 2024, may not be indicative of the results that may be expected for the year ending December 31, 2024. Amounts as of December 31, 2023, included in the condensed consolidated financial statements have been derived from the audited consolidated financial statements as of that date. The unaudited condensed consolidated financial statements, included herein, should be read in conjunction with the consolidated financial statements and notes thereto as well as Management's Discussion and Analysis of Financial Condition and Results of Operations in NNN's Form 10-K for the year ended December 31, 2023.

Principles of Consolidation. NNN's unaudited condensed consolidated financial statements include the accounts of each of the respective majority owned and controlled affiliates, including transactions whereby NNN has been determined to be the primary beneficiary in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") guidance included in Topic 810, Consolidation. All significant intercompany account balances and transactions have been eliminated.

Real Estate Portfolio. NNN records the acquisition of real estate at cost, including acquisition and closing costs. The cost of Properties developed or funded by NNN includes direct and indirect costs of construction, property taxes, interest, third-party costs and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. NNN recorded $3,476,000 and $1,126,000 in capitalized interest during the development period for the six months ended June 30, 2024 and 2023, respectively, of which $1,617,000 and $721,000 was recorded during the quarters ended June 30, 2024 and 2023, respectively.

Purchase Accounting for Acquisition of Real Estate. In accordance with the FASB ASC guidance on business combinations, consideration for the real estate acquired is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and, if applicable, to identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, as applicable, based on their respective fair values.

9

The fair value estimate is sensitive to significant assumptions, such as establishing a range of relevant market assumptions for land, building and rent and where the acquired property falls within that range. These market assumptions for land, building and rent use the most relevant comparable properties for an acquisition. The final value relies upon ranking comparable properties' attributes from most to least similar.

The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then allocated to land, building and tenant improvements based on the determination of their fair values.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management's estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease and the renewal option terms if it is probable that the tenant will exercise options. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant will renew the lease for an option term whereby the Company amortizes the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is valued by comparing the purchase price paid for a property after adjusting for existing in-place leases to the estimated fair value of the property as-if-vacant, determined as set forth above. This intangible asset is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off in that period. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

Lease Accounting. NNN records its leases on the Property Portfolio in accordance with FASB ASC Topic 842, Leases ("ASC 842"). In addition, NNN records right-of-use assets and operating lease liabilities as lessee under operating leases in accordance with ASC 842.

NNN's real estate is generally leased to tenants on a net lease basis, whereby the tenant is responsible for all operating expenses relating to the Property, including property taxes, insurance, maintenance, repairs and capital expenditures. The leases on the Property Portfolio are predominantly classified as operating leases and are accounted for as follows:

Operating method – Properties with leases accounted for using the operating method are recorded at the cost of the real estate and depreciated on the straight-line method over their estimated remaining useful lives, which generally range from 20 to 40 years for buildings and improvements and 15 years for land improvements. Leasehold interests are amortized on the straight-line method over the terms of their respective leases. Revenue is recognized as rentals are earned and expenses (including depreciation) are charged to operations as incurred. When scheduled rentals vary during the lease term, income is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis.

Collectability. In accordance with ASC 842, NNN reviews the collectability of its rental income on an ongoing basis. NNN considers collectability indicators when analyzing accounts receivable (and accrued rent), historical bad debt levels, tenant credit-worthiness and current economic trends, all of which assists in evaluating the probability of outstanding and future rental income collections and the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected recovery of pre-petition and post-petition bankruptcy claims.

When NNN deems the collection of rental income from a tenant not probable, uncollected previously recognized rental revenue and any related accrued rent are reversed as a reduction to rental income and, subsequently, any rental income is only recognized when cash receipts are received. At this point, a tenant is deemed cash basis for accounting purposes. If NNN subsequently deems the collection of rental income is probable, any related accrued rental income or expense is restored.

10

As a result of the review of collectability, NNN recorded a write-off of $473,000 and $348,000 of outstanding receivables and related accrued rent for certain tenants reclassified to cash basis for accounting purposes during the six months ended June 30, 2024 and 2023, respectively.

The following table summarizes those tenants classified as cash basis for accounting purposes as of June 30:

	2024				2023
Number of tenants		11				9
Cash basis tenants as a percent of:
Total Properties		3.4	%			5.0	%
Total annual base rent		5.0	%	(1)		7.1	%	(2)
Total gross leasable area		4.8	%			6.8	%

Based on annualized base rent for all leases in place at the end of each respective quarter.
	(1)	$837,568,000 as of June 30, 2024.
	(2)	$794,475,000 as of June 30, 2023.

During the six months ended June 30, 2024 and 2023, NNN recognized $20,883,000 and $30,088,000, respectively, of rental income from certain tenants for periods following their classification to cash basis for accounting purposes, of which $11,108,000 and $14,523,000 was recognized during the quarters ended June 30, 2024 and 2023, respectively.

NNN includes an allowance for doubtful accounts in rental income on the Condensed Consolidated Statements of Income and Comprehensive Income.

Real Estate – Held for Sale. Real estate held for sale is not depreciated and is recorded at the lower of cost or fair value, less cost to sell. On a quarterly basis, the Company evaluates its Properties for held for sale classification based on specific criteria as outlined in FASB ASC Topic 360, Property, Plant and Equipment, including management's intent to commit to a plan to sell the asset. NNN anticipates the disposition of Properties classified as held for sale to occur within 12 months. At June 30, 2024 and December 31, 2023, NNN had recorded real estate held for sale of $9,442,000 (six properties) and $4,573,000 (one property), respectively, in real estate portfolio on the Condensed Consolidated Balance Sheets. The property classified as held for sale as of December 31, 2023 was sold during the six months ended June 30, 2024.

Real Estate Dispositions. When real estate is disposed, the related cost, accumulated depreciation or amortization and any accrued rental income from operating leases and the net investment from direct financing leases are removed from the accounts, and gains and losses from the dispositions are reflected in income. FASB ASC Topic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets ("ASC 610-20"), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. An entity that transfers a nonfinancial asset in the scope of ASC 610-20 follows a two-step derecognition model to determine whether (and when) to derecognize the asset. NNN determined the key transactions impacted by ASC 610-20 are recorded in gain on disposition of real estate reported on the Condensed Consolidated Statements of Income and Comprehensive Income. In accordance with ASC 610-20, NNN evaluates any separate contracts or performance obligations to determine proper timing and/or amount of revenue recognition, as well as, transfer of control and transaction price allocation in determining the amount of gain or loss to record.

Impairment – Real Estate. NNN periodically assesses its long-lived real estate assets for possible impairment whenever certain events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. These indicators include, but are not limited to: changes in real estate market conditions, the ability of NNN to re-lease properties that are currently vacant or become vacant, properties reclassified as held for sale, persistent vacancies greater than one year, and properties leased to tenants in bankruptcy. Management evaluates whether an impairment in carrying value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), and the residual value of the real estate, with the carrying value of the individual asset. The future undiscounted cash flows are primarily driven by estimated future market rents. Future cash flow estimates are sensitive to the assumptions made by management regarding future market rents, which are affected by expectations about future market and economic conditions. If an impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its estimated fair value. NNN's Properties are leased primarily to retail tenants under long-term net leases and primarily held for investment. Generally, NNN's Property leases provide for initial terms of 10 to 20 years, with cash flows provided over the entire term.

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Credit Losses on Financial Instruments. FASB ASC Topic 326, Financial Instruments – Credit Losses, requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings. The guidance requires a lifetime credit loss expected at inception and requires pooling of assets, which share similar risk characteristics. NNN is required to evaluate current economic conditions, as well as make future expectations of economic conditions. In addition, the measurement of the expected credit loss is over the asset's contractual term.

NNN held mortgages receivable, including accrued interest, of $705,000 and $1,002,000 included in other assets on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively, net of $14,000 and $64,000 allowance for credit loss, respectively. NNN periodically evaluates the allowance for credit loss based on the fair value of the collateral and a 15-year historical collectability trend analysis.

Cash and Cash Equivalents. NNN considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash and money market accounts. Cash equivalents are stated at cost plus accrued interest, which approximates fair value. Cash accounts maintained on behalf of NNN in demand deposits at commercial banks and money market funds may exceed federally insured levels or may be held in accounts without any federal insurance or any other insurance or guarantee. However, NNN has not experienced any losses in such accounts.

Restricted Cash and Cash Held in Escrow. Restricted cash and cash held in escrow may include (i) cash proceeds from the sale of assets held by qualified intermediaries in anticipation of the acquisition of replacement properties in tax-free exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) cash that has been placed in escrow for the future funding of construction commitments, or (iii) cash that is not immediately available to NNN. NNN held $14,672,000 and $3,966,000 in restricted cash and cash held in escrow as of June 30, 2024 and December 31, 2023, respectively.

Debt Costs – Line of Credit Payable. Debt costs incurred in connection with NNN's $1,200,000,000 unsecured revolving line of credit have been deferred and are being amortized to interest expense over the term of the loan commitment using the straight-line method, which approximates the effective interest method. NNN has recorded debt costs associated with the Credit Facility (as defined in "Note 3 – Line of Credit Payable") as an asset, in debt costs on the Condensed Consolidated Balance Sheets.

Debt Costs – Notes Payable. Debt costs incurred in connection with the issuance of NNN's unsecured notes have been deferred and are being amortized to interest expense over the term of the respective debt obligation using the effective interest method. NNN had debt costs of $43,820,000 and $42,595,000, included in notes payable on the Condensed Consolidated Balance Sheets, as of June 30, 2024 and December 31, 2023, respectively, net of accumulated amortization of $12,606,000 and $14,343,000, respectively.

Revenue Recognition. Rental revenues for properties under construction commence upon completion of construction of the leased asset and delivery of the leased asset to the tenant. Rental revenues for non-development real estate assets are recognized when earned in accordance with ASC 842, based on the terms of the lease of the leased asset. Leasehold interests are amortized on the straight-line method over the terms of their respective leases. When scheduled rentals vary during the lease term, income is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Lease termination fees are recognized when collected subsequent to the related lease that is cancelled and NNN no longer has continuing involvement with the former tenant with respect to that property.

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Earnings Per Share. Earnings per share have been computed pursuant to the FASB guidance included in FASB ASC Topic 260, Earnings Per Share. The guidance requires classification of the Company's unvested restricted share units, which carry rights to receive nonforfeitable dividends, as participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period.

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per share using the two-class method (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Basic and Diluted Earnings:
Net earnings	$	106,666		$	98,704		$	201,037		$	188,871
Less: Earnings allocated to unvested restricted shares		(189	)		(162	)		(333	)		(295	)
Net earnings used in basic and diluted earnings per share	$	106,477		$	98,542		$	200,704		$	188,576
Basic and Diluted Weighted Average Shares Outstanding:
Weighted average shares outstanding		183,532,421			182,123,555			183,116,552			181,923,011
Less: Unvested restricted shares		(324,620	)		(295,441	)		(294,671	)		(267,861	)
Less: Unvested contingent restricted shares		(769,010	)		(736,083	)		(702,410	)		(685,341	)
Weighted average shares outstanding used in      basic earnings per share		182,438,791			181,092,031			182,119,471			180,969,809
Other dilutive securities		368,583			535,826			408,862			574,466
Weighted average shares outstanding used in      diluted earnings per share		182,807,374			181,627,857			182,528,333			181,544,275

Income Taxes. NNN has made an election to be taxed as a REIT under Sections 856 through 860 of the Code, and related regulations. NNN generally will not be subject to federal income taxes on taxable income it distributes to stockholders, provided it meets certain other requirements for qualifying as a REIT. As of June 30, 2024, NNN believes it has qualified as a REIT. Notwithstanding NNN's qualification for taxation as a REIT, NNN is subject to certain state and local income, franchise and excise taxes.

Fair Value Measurement. NNN's estimates of fair value of financial and non-financial assets and liabilities are based on the framework established in FASB ASC Topic 820, Fair Value Measurement. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The guidance describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

•Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.

•Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

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Accumulated Other Comprehensive Income (Loss). The following table outlines the changes in accumulated other comprehensive income (loss) for the six months ended June 30, 2024 (dollars in thousands):

	Gain (Loss) on Cash Flow Hedges(1)
Beginning balance, December 31, 2023	$	(10,111	)
Reclassifications from accumulated other comprehensive income to net earnings		1,242		(2)
Ending balance, June 30, 2024	$	(8,869	)

(1) Additional disclosure is included in "Note 4 – Notes Payable and Derivatives".

(2) Recorded in interest expense on the Condensed Consolidated Statements of Income and Comprehensive Income. There is no income tax expense (benefit) resulting from this reclassification.

New Accounting Pronouncements. In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), effective for fiscal years, beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments in this update require public entities to provide enhanced disclosures primarily around segment expenses. On an annual and interim basis, entities will disclose significant segment expenses that are regularly provided to the chief operating decision maker and included with each measure of segment profit or loss, an amount for “other segment items” by reportable segment accompanied by a description of its composition, and all annual disclosures about segment profit and loss currently required by Topic 280 to be disclosed in interim periods. While NNN only has one reportable segment, NNN is currently evaluating the potential impact the adoption of ASU 2023-07 will have on its future disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), effective for annual periods beginning after December 15, 2024. The amendments in the update require public business entities on an annual basis to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold of equal to or greater than five percent of the amount computed by multiplying pretax income by the statutory income tax rate. The amendments also require that entities disclose on an annual basis information about the amount of income taxes paid disaggregated by federal, state, and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than five percent of total income taxes paid. The amendments eliminate some of the previous required disclosures for all entities relating to estimates of the change in unrecognized tax benefits reasonably possible within 12 months. NNN is currently evaluating the potential impact the adoption of ASU 2023-09 will have on its future disclosures.

Use of Estimates. Additional critical accounting policies of NNN include management's estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities which are required to prepare the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Significant accounting policies include management's estimates of the purchase accounting for acquisition of real estate, the recoverability of the carrying value of long-lived assets and management's evaluation of the probability of outstanding and future lease payment collections. Estimates are sensitive to evaluations by management about current and future expectations of market and economic conditions. Actual results could differ from those estimates.

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Note 2 – Real Estate:

Real Estate – Portfolio

Leases. At June 30, 2024, NNN's real estate portfolio had a weighted average remaining lease term of 10.0 years and consisted of 3,539 leases classified as operating leases and an additional four leases accounted for as direct financing leases.

The following is a summary of the general structure of the leases in the Property Portfolio, although the specific terms of each lease can vary significantly. Typically, the Property leases provide for initial terms of 10 to 20 years. The Properties are generally leased under triple-net leases, pursuant to which the tenant typically bears responsibility for substantially all property costs and expenses associated with ongoing maintenance, repair, replacement and operation of the Property, including utilities, real estate taxes and assessments, and property and liability insurance. Certain Properties are subject to leases under which NNN retains responsibility for specific costs and expenses of the Property. NNN's leases provide for annual base rental payments (generally payable in monthly installments), and generally provide for limited increases in rent as a result of increases in the Consumer Price Index or fixed increases.

Generally, NNN's leases provide the tenant with one or more multi-year renewal options, subject to generally the same terms and conditions provided under the initial lease term, including rent increases. NNN's lease term is based on the non-cancellable base term unless economic incentives make it reasonably certain that an option period to extend the lease will be exercised, in which event NNN includes the renewal options. Some of the leases also provide that in the event NNN wishes to sell the Property subject to that lease, NNN first must offer the lessee the right to purchase the Property on the same terms and conditions as any offer which NNN intends to accept for the sale of the Property.

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

	June 30, 2024			December 31, 2023
Land and improvements(1)	$	2,888,355		$	2,878,400
Buildings and improvements		7,526,840			7,368,873
Leasehold interests		355			355
		10,415,550			10,247,628
Less accumulated depreciation and amortization		(1,958,444	)		(1,863,451	)
		8,457,106			8,384,177
Work in progress and improvements		117,754			144,068
Accounted for using the operating method		8,574,860			8,528,245
Accounted for using the direct financing method		2,634			3,033
Classified as held for sale(2)		9,442			4,573
	$	8,586,936		$	8,535,851

(1) Includes $56,895 and $96,464 in land for Properties under construction at June 30, 2024 and December 31, 2023, respectively.

(2) As of June 30, 2024, six Properties were classified as held for sale. The one property classified as held for sale as of December 31, 2023 was sold during the six months ended June 30, 2024.

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Rental income from operating leases	$	211,557	$	197,629	$	420,641	$	395,812
Earned income from direct financing leases		118		143		237		287
Percentage rent		259		291		1,147		1,054
Rental revenues		211,934		198,063		422,025		397,153
Real estate expense reimbursement from tenants		4,206		4,363		8,940		8,903
	$	216,140	$	202,426	$	430,965	$	406,056

Some leases provide for a free rent period or scheduled rent increases throughout the lease term. Such amounts are recognized on a straight-line basis over the terms of the leases.

For the six months ended June 30, 2024 and 2023, NNN recognized ($131,000) and $1,003,000, respectively, of net straight-line accrued rental income, net of reserves, of which ($95,000) and $534,000 of such income, net of reserves was recorded during the quarters ended June 30, 2024 and 2023, respectively.

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):

	June 30, 2024			December 31, 2023
Intangible lease assets (included in other assets):
Above-market in-place leases	$	14,875		$	15,297
Less: accumulated amortization		(11,977	)		(12,080	)
Above-market in-place leases, net	$	2,898		$	3,217
In-place leases	$	119,419		$	122,802
Less: accumulated amortization		(85,540	)		(85,332	)
In-place leases, net	$	33,879		$	37,470
Intangible lease liabilities (included in other liabilities):
Below-market in-place leases	$	40,631		$	41,244
Less: accumulated amortization		(29,058	)		(29,117	)
Below-market in-place leases, net	$	11,573		$	12,127

The amounts amortized as a net increase to rental income for above-market and below-market in-place leases for the six months ended June 30, 2024 and 2023, were $242,000 and $234,000, respectively, of which $125,000 and $122,000 were recorded for the quarters ended June 30, 2024 and 2023, respectively. The value of in-place leases amortized to expense for the six months ended June 30, 2024 and 2023, was $3,230,000 and $3,527,000, respectively, of which $1,583,000 and $1,767,000 was recorded for the quarters ended June 30, 2024 and 2023, respectively.

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Real Estate – Dispositions

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

	Quarter Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	# 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	14	$	17,621	7	$	13,930	20	$	22,442	13	$	20,230

Real Estate – Commitments

NNN has committed to fund construction on 27 Properties. The improvements on such Properties are estimated to be completed within 12 to 18 months. These construction commitments, as of June 30, 2024, are outlined in the table below (dollars in thousands):

Total commitment(1)	$	249,365
Less amount funded		(174,649	)
Remaining commitment	$	74,716

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

Real Estate – Impairments

NNN periodically assesses its long-lived real estate assets for possible impairment whenever certain events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Total real estate impairments, net of recoveries	$	944	$	34	$	2,148	$	2,674
Number of Properties:
Vacant		2		—		2		3
Occupied		—		—		3		1

The valuation of impaired assets is determined using widely accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations and bona fide purchase offers received from third parties, which are Level 3 inputs. NNN may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate.

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Note 3 – Line of Credit Payable:

In April 2024, NNN amended and restated its credit agreement to increase borrowing capacity under its unsecured revolving credit facility from $1,100,000,000 to $1,200,000,000 and amended certain other terms under the former revolving credit facility (as the context requires, the previous and new revolving credit facility, the "Credit Facility"). The Credit Facility had a weighted average outstanding balance of $111,966,000 and a weighted average interest rate of 6.26% during the six months ended June 30, 2024. The Credit Facility has a base interest rate of the Secured Overnight Financing Rate ("SOFR") plus a SOFR adjustment of 10 basis points ("Adjusted SOFR"). The Credit Facility bears interest at Adjusted SOFR plus 77.5 basis points; however, such interest rate may change pursuant to a tiered interest rate structure based on NNN's debt rating. Additionally, as part of NNN's environmental, social and governance ("ESG") initiative, pricing may be reduced if specified ESG metrics are achieved. The Credit Facility matures in April 2028, unless the Company exercises its options to extend maturity to April 2029. The Credit Facility also includes an accordion feature which permits NNN to increase the facility size up to $2,000,000,000, subject to lender approval. In connection with the Credit Facility, loan costs are classified as debt costs on the Condensed Consolidated Balance Sheets. As of June 30, 2024, there was $12,000,000 outstanding and $1,188,000,000 available for future borrowings under the Credit Facility, and NNN was in compliance with each of the Credit Facility financial covenants.

Note 4 – Notes Payable and Derivatives:

Additional information related to NNN's notes payable and derivatives is included in NNN's Annual Report on Form 10-K for the year ended December 31, 2023.

In May 2024, NNN filed a prospectus supplement to the prospectus contained in its August 2023 shelf registration statement (see "Note 5 – Stockholders' Equity") and issued $500,000,000 aggregate principal amount of 5.500% notes due June 2034 (the "2034 Notes").

The 2034 Notes were sold at a discount with an aggregate net price of $493,840,000 with interest payable annually on June 15 and December 15, commencing on December 15, 2024. The discount of $6,160,000 is being amortized to interest expense over the term of the notes using the effective interest method. The effective interest rate for the 2034 Notes after accounting for the note discount is 5.662%.

NNN received approximately $489,390,000 of net proceeds in connection with the issuance of the 2034 Notes, after incurring debt issuance costs consisting primarily of underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses, totaling $4,450,000 for the 2034 Notes.

The 2034 Notes are senior, unsecured obligations of NNN and are subordinated to all secured debt of NNN. NNN may redeem the 2034 Notes, in whole or part, at any time prior to the par call date at the redemption price as set forth in the supplemental indenture dated May 29, 2024 relating to the 2034 Notes; provided, however, that if NNN redeems the notes on or after the par call date, the redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date.

In June 2024, NNN redeemed the $350,000,000 3.900% notes payable that were due in June 2024. The notes were redeemed at a price equal to 100% of the principal amount and accrued and unpaid interest.

As of June 30, 2024, $8,869,000 remained in accumulated other comprehensive income (loss) related to NNN's previously terminated interest rate hedges. During the six months ended June 30, 2024 and 2023, NNN reclassified out of accumulated other comprehensive income (loss) $1,242,000 and $1,223,000, respectively, of which $610,000 and $616,000 was reclassified during the quarters ended June 30, 2024 and 2023, respectively, as an increase in interest expense. Over the next 12 months, NNN estimates that an additional $1,840,000 will be reclassified as an increase in interest expense from these terminated derivatives. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on NNN's long-term debt.

NNN does not use derivatives for trading or speculative purposes. NNN had no derivative financial instruments outstanding at June 30, 2024.

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Note 5 – Stockholders' Equity:

Universal Shelf Registration Statement. In August 2023, NNN filed a shelf registration statement with the Securities and Exchange Commission (the "Commission") which became automatically effective ("Universal Shelf"). The Universal Shelf permits the issuance by NNN of an indeterminate amount of debt and equity securities, including preferred stock, depositary shares, common stock, stock purchase contracts, rights, warrants, and units. NNN may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

At-The-Market Offerings. NNN has established an at-the-market equity program ("ATM") which allows NNN to sell shares of common stock from time to time. The following outlines NNN's ATM:

	2023 ATM	2020 ATM
Shelf registration statement:
Effective date	August 2023	August 2020
Termination date	August 2026	August 2023
Total allowable shares	17,500,000	17,500,000
Total shares issued as of June 30, 2024	803,443	7,722,511

The following table outlines the common stock issuances pursuant to NNN's ATM (dollars in thousands, except per share data):

	Six Months Ended June 30,
	2024		2023
Shares of common stock		803,443		650,135
Average price per share (net)	$	41.69	$	43.98
Net proceeds	$	33,493	$	28,592
Stock issuance costs(1)	$	234	$	558

(1) Stock issuance costs consist primarily of underwriters' and agents' fees and commissions, and legal and accounting fees.

Dividend Reinvestment and Stock Purchase Plan. In February 2024, NNN filed a shelf registration statement for its Dividend Reinvestment and Stock Purchase Plan ("DRIP") with the Commission that was automatically effective, and permits NNN to issue up to 4,000,000 shares of common stock. The following outlines the common stock issuances pursuant to NNN's DRIP (dollars in thousands):

	Six Months Ended June 30,
	2024		2023
Shares of common stock		34,309		35,922
Net proceeds	$	1,313	$	1,615

Dividends. The following table outlines the dividends declared and paid for NNN's common stock (dollars in thousands, except per share data):

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Dividends	$	103,159	$	99,745	$	205,843	$	199,146
Per share		0.5650		0.5500		1.1300		1.1000

In July 2024, NNN declared a dividend of $0.5800 per share, which is payable in August 2024 to its common stockholders of record as of July 31, 2024.

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Note 6 – Fair Value of Financial Instruments:

NNN believes the carrying value of its Credit Facility approximates fair value based upon its nature, terms and variable interest rate. At June 30, 2024 and December 31, 2023, the fair value of NNN's notes payable excluding unamortized discount and debt costs was $3,864,675,000 and $3,801,367,000, respectively, based upon quoted market prices as of the close of the period, which is a Level 1 valuation since NNN's notes payable are publicly traded.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K of NNN REIT, Inc. for the year ended December 31, 2023 ("2023 Annual Report"). The term “NNN” or the “Company” refers to NNN REIT, Inc. and all of its consolidated subsidiaries.

Forward-Looking Statements

The information herein contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 (the “Exchange Act”). Also, when NNN uses any of the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” or similar expressions, NNN is making forward-looking statements. Although management believes that the expectations reflected in such forward-looking statements are based upon present expectations and reasonable assumptions, NNN's actual results could differ materially from those set forth in the forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and NNN undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. The following is a summary of the risks and uncertainties, although not all risks and uncertainties, that could cause NNN's actual results to differ materially from those presented in NNN's forward-looking statement:

•Changes in financial and economic conditions, including inflation, may have an adverse impact on NNN, its tenants and commercial real estate in general;

•Loss of rent from tenants would reduce NNN's cash flow;

•A significant portion of the source of the Property Portfolio annual base rent is concentrated in specific industry classifications, tenants and geographic locations;

•NNN may not be able to successfully execute its acquisition or development strategies;

•NNN may not be able to dispose of Properties consistent with its operating strategy;

•Certain provisions of NNN's leases or loan agreements may be unenforceable;

•Competition from numerous other real estate investment trusts (“REIT”), commercial developers, real estate limited partnerships and other investors or a lack of properties for sale may impede NNN's ability to grow;

•A natural disaster or impacts of weather or other event resulting in uninsured loss may adversely affect the operations of NNN's tenants and therefore the ability of NNN's tenants to pay rent, NNN's operating results and asset values of NNN's Property Portfolio (as defined below);

•NNN's ability to fully control the management of its net-leased Properties may be limited;

•Bankrupt tenants or vacant Properties could adversely affect NNN's business or financial condition;

•Cybersecurity risks and cyber incidents as well as other significant disruptions of NNN's information technology networks and related systems and resources, or those of NNN's vendors or other third-parties, could adversely affect NNN's business, disrupt operations and expose NNN to liabilities to tenants, associates, capital providers, governmental regulators and other third parties;

•NNN relies upon cloud computing services to operate certain aspects of its business and any disruption could have an adverse effect on its financial condition and results of operations;

•Future investment in international markets could subject NNN to additional risks;

•NNN may suffer a loss in the event of a default or bankruptcy of a borrower;

•Property ownership through joint ventures and partnerships could limit NNN's control of those investments;

•NNN may be unable to obtain debt or equity capital on favorable terms, if at all;

•The amount of debt NNN has and the restrictions imposed by that debt could adversely affect NNN's business and financial condition;

•NNN is obligated to comply with financial and other covenants in its debt instruments that could restrict its operating activities, and the failure to comply with such covenants could result in defaults that accelerate the payment of such debt;

•NNN's ability to pay dividends in the future is subject to many factors;

•Future issuances of NNN's equity securities could dilute the interest of NNN's common stockholders;

•Owning real estate and indirect interests in real estate carries inherent risks;

•NNN's real estate investments are illiquid;

•NNN may be subject to known or unknown environmental liabilities and risks, including but not limited to liabilities and risks resulting from the existence of hazardous materials on or under Properties owned by NNN;

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•NNN's failure to qualify as a REIT for federal income tax purposes could result in significant tax liability;

•Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and may negatively affect NNN's operating decisions;

•The share ownership restrictions of the Internal Revenue Code of 1986, as amended (the "Code"), for REITs and the 9.8% share ownership limit in NNN's charter may inhibit market activity in NNN's shares of stock and restrict NNN's business combination opportunities;

•Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations;

•Non-compliance with Title III of the Americans with Disabilities Act of 1990 and similar state and local laws could have an adverse effect on NNN's business and operating results;

•NNN's loss of key management personnel could adversely affect performance and the value of its securities;

•NNN's failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results and the market value of NNN's securities;

•An epidemic or pandemic (such as the outbreak and worldwide spread of a novel strain of coronavirus, and its variants ("COVID-19")), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, may precipitate or materially exacerbate one or more of the other risks, and may significantly disrupt NNN's tenants' ability to operate their businesses and/or pay rent to NNN or prevent NNN from operating its business in the ordinary course for an extended period;

•Acts of violence, terrorist attacks or war may affect NNN's Properties, the markets in which NNN operates and NNN's results of operations;

•Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial performance;

•The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility;

•Even if NNN remains qualified as a REIT, NNN faces other tax liabilities that reduce operating results and cash flow; and

•Adverse legislative or regulatory tax changes could reduce NNN's earnings and cash flow and the market value of NNN's securities.

Additional information related to these risks and uncertainties are included in "Item 1A. Risk Factors" of NNN's 2023 Annual Report.

These risks and uncertainties may cause NNN's actual future results to differ materially from expected results. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. NNN undertakes no obligation to update or revise such forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

NNN, a Maryland corporation, is a fully integrated REIT formed in 1984. NNN's assets are primarily real estate assets. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment ("Properties" or "Property Portfolio", or individually a "Property").

As of June 30, 2024, NNN owned 3,548 Properties in 49 states, with an aggregate gross leasable area of approximately 36,095,000 square feet, and a weighted average remaining lease term of 10.0 years. Approximately 99 percent of the Properties were leased as of June 30, 2024.

NNN's management team focuses on certain key indicators to evaluate the financial condition and operating performance of NNN. The key indicators for NNN include items such as: the composition of the Property Portfolio (such as tenant, line of trade and geographic diversification), the occupancy rate of the Property Portfolio, certain financial performance metrics and profitability measures, industry trends and industry performance compared to that of NNN.

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NNN evaluates the creditworthiness of its significant current and prospective tenants. This evaluation may include reviewing available financial statements, store level financial performance, press releases, public credit ratings from major credit rating agencies, industry news publications and financial market data (debt and equity pricing). NNN may also evaluate the business and operations of its significant tenants, including past payment history and periodically meeting with senior management of certain tenants.

NNN continues to maintain its diversification by tenant, line of trade and geography. NNN's largest line of trade concentrations are the restaurant (including full and limited service) (16.9%), automotive service (16.7%), and convenience store (16.2%) sectors. These sectors represent a large part of the freestanding retail property marketplace and NNN's management believes these sectors present attractive investment opportunities. The Property Portfolio is geographically concentrated in the southeast (26.4%) and south (22.9%) United States, which are regions of historically above-average population growth. Given these concentrations, any financial hardship within these sectors or geographic regions could have a material adverse effect on the financial condition and operating performance of NNN.

As of June 30, 2024 and 2023, the Property Portfolio remained approximately 99 percent leased and had a weighted average remaining lease term of approximately 10 years. High occupancy levels coupled with a triple-net lease structure, provides enhanced probability of achieving consistent earnings.

Additional information related to NNN and the Property Portfolio is included in NNN's 2023 Annual Report.

Results of Operations

Property Analysis

General. The following table summarizes the Property Portfolio:

	June 30, 2024			December 31, 2023			June 30, 2023
Properties Owned:
Number		3,548			3,532			3,479
Total gross leasable area (square feet)		36,095,000			35,966,000			35,492,000
Properties:
Leased and unimproved land		3,522			3,514			3,457
Percent of Properties – leased and unimproved land		99	%		99	%		99	%
Weighted average remaining lease term (years)		10.0			10.1			10.2
Total gross leasable area (square feet) – leased		35,747,000			35,683,000			35,252,000
Total annualized base rent(1)	$	837,568,000		$	818,749,000		$	794,475,000

(1) Annualized base rent is calculated by multiplying the monthly cash base rent in place at the end of each respective quarter, by 12.

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The following table summarizes the diversification of the Property Portfolio based on the top 20 lines of trade:

		% of Annual Base Rent
	Lines of Trade	June 30, 2024(1)	December 31, 2023(2)	June 30, 2023(3)
1.	Automotive service	16.7%	15.6%	14.5%
2.	Convenience stores	16.2%	16.4%	16.9%
3.	Restaurants – limited service	8.5%	8.5%	8.8%
4.	Restaurants – full service	8.4%	8.7%	8.9%
5.	Family entertainment centers	6.6%	6.4%	5.7%
6.	Recreational vehicle dealers, parts and accessories	5.0%	4.6%	4.2%
7.	Theaters	4.1%	4.1%	4.3%
8.	Health and fitness	4.0%	4.5%	4.7%
9.	Equipment rental	3.3%	3.0%	3.0%
10.	Wholesale clubs	2.4%	2.5%	2.5%
11.	Automotive parts	2.4%	2.5%	2.5%
12.	Drug stores	2.3%	2.4%	2.5%
13.	Home improvement	2.2%	2.2%	2.3%
14.	Furniture	2.0%	2.0%	2.1%
15.	Medical service providers	1.8%	1.7%	1.8%
16.	General merchandise	1.4%	1.4%	1.5%
17.	Home furnishings	1.3%	1.3%	1.5%
18.	Consumer electronics	1.3%	1.4%	1.4%
19.	Travel plazas	1.3%	1.3%	1.3%
20.	Pet supplies and services	1.2%	1.1%	1.0%
	Other	7.6%	8.4%	8.6%
		100.0%	100.0%	100.0%

Based on annualized base rent for all leases in place at the end of each respective quarter.
	(1)	$837,568,000 as of June 30, 2024.
	(2)	$818,749,000 as of December 31, 2023.
	(3)	$794,475,000 as of June 30, 2023.

Property Acquisitions. The following table summarizes the Property acquisitions (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Acquisitions:
Number of Properties		16			36			36			79
Gross leasable area (square feet)(1)		272,000			278,000			555,000			553,000
Cap rate(2)		7.9	%		7.2	%		8.0	%		7.1	%
Total dollars invested(3)	$	110,542		$	181,296		$	235,034		$	337,541

(1)	Includes additional square footage from completed construction on existing Properties.
(2)	The cap rate is a weighted average, calculated as the initial cash annual base rent divided by the total purchase price of the Properties.
(3)	Includes dollars invested in projects under construction or tenant improvements for each respective period.

NNN typically funds Property acquisitions either through borrowings under NNN's Credit Facility (as defined in "Capital Structure – Line of Credit Payable"), by issuing its debt or equity securities in the capital markets, with undistributed funds from operations, or with proceeds from the sale of Properties.

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Property Dispositions. The following table summarizes the properties sold by NNN (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Number of properties		14			7			20			13
Gross leasable area (square feet)		303,000			37,000			417,000			54,000
Net sales proceeds	$	67,274		$	28,233		$	85,805		$	40,158
Net gain on disposition of real estate	$	17,621		$	13,930		$	22,442		$	20,230
Cap rate(1)		7.7	%		5.1	%		7.4	%		5.6	%

(1) The cap rate is a weighted average of properties occupied at disposition, calculated as the cash annual base rent divided by the total gross proceeds received for the properties.

NNN typically uses the disposition proceeds to either pay down the Credit Facility or reinvest in real estate.

Analysis of Revenues

The following table summarizes NNN's revenues (dollars in thousands):

	Quarter Ended June 30,				Percent Increase			Six Months Ended June 30,				Percent Increase
	2024		2023		(Decrease)			2024		2023		(Decrease)
Rental Revenues(1)	$	211,934	$	198,063		7.0	%	$	422,025	$	397,153		6.3	%
Real estate expense reimbursement     from tenants		4,206		4,363		(3.6	)%		8,940		8,903		0.4	%
Rental income		216,140		202,426		6.8	%		430,965		406,056		6.1	%
Interest and other income from real     estate transactions		673		214		214.5	%		1,255		692		81.4	%
Total revenues	$	216,813	$	202,640		7.0	%	$	432,220	$	406,748		6.3	%

(1) Includes rental income from operating leases, earned income from direct financing leases and percentage rent ("Rental Revenues").

Rental Income. Rental income increased for the quarter and six months ended June 30, 2024, as compared to the same periods in 2023. The increase is primarily due to the Rental Revenues from NNN's recent Property acquisitions (see "Results of Operations – Property Analysis – Property Acquisitions").

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Analysis of Expenses

The following table summarizes NNN's expenses (dollars in thousands):

	Quarter Ended June 30,						Percent Increase			Six Months Ended June 30,						Percent Increase
	2024			2023			(Decrease)			2024			2023			(Decrease)
General and administrative	$	11,789		$	10,740			9.8	%	$	24,373		$	22,991			6.0	%
Real estate:
Reimbursement from tenants		4,206			4,363			(3.6	)%		8,940			8,903			0.4	%
Non-reimbursed		2,552			2,473			3.2	%		4,972			4,779			4.0	%
Total real estate		6,758			6,836			(1.1	)%		13,912			13,682			1.7	%
Depreciation and amortization		62,503			59,875			4.4	%		123,118			119,023			3.4	%
Leasing transaction costs		20			52			(61.5	)%		53			127			(58.3	)%
Impairment losses – real estate, net of     recoveries		944			34			2,676.5	%		2,148			2,674			(19.7	)%
Executive retirement costs		153			309			(50.5	)%		470			732			(35.8	)%
Total operating expenses	$	82,167		$	77,846			5.6	%	$	164,074		$	159,229			3.0	%
Interest and other income	$	(976	)	$	(74	)		1,218.9	%	$	(1,095	)	$	(107	)		923.4	%
Interest expense		46,577			40,094			16.2	%		90,646			78,985			14.8	%
Total other expenses	$	45,601		$	40,020			13.9	%	$	89,551		$	78,878			13.5	%

As a percentage of total revenues:
General and administrative	5.4	%	5.3	%	5.6	%	5.7	%
Non-reimbursed real estate	1.2	%	1.2	%	1.2	%	1.2	%

General and Administrative. General and administrative expenses increased in amount; however, remained relatively flat as a percentage of total revenues for the quarter and six months ended June 30, 2024 as compared to the same periods in 2023. The increase is primarily attributable to an increase in compensation costs.

Real Estate. Total real estate expenses remained relatively consistent for the quarter and six months ended June 30, 2024, as compared to the same periods in 2023. NNN focuses on non-reimbursed real estate expenses (total real estate expenses, net of reimbursements from tenants). These expenses are typically attributable to (i) properties for which the lease terms do not obligate the tenant to pay certain expenses or (ii) vacant properties.

Impairment Losses – Real Estate, Net of Recoveries. As a result of NNN's review of long-lived assets, including identifiable intangible assets, NNN recognized real estate impairments, net of recoveries for the quarters and six months ended June 30, 2024 and 2023, which were less than one percent of NNN's total assets for the respective periods as reported on the Condensed Consolidated Balance Sheets. Due to NNN's core business of investing in real estate leased primarily to retail tenants under long-term net leases, the inherent risks of owning commercial real estate, and unknown potential changes in financial and economic conditions that may impact NNN's tenants, NNN believes it is reasonably possible to incur real estate impairment charges in the future.

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Interest Expense. Interest expense increased for the quarter and six months ended June 30, 2024, as compared to the same periods in 2023. The following represents the primary changes in fixed rate long-term debt that impacted interest expense (dollars in thousands):

Transaction	Effective Date	Principal			Stated Rate	Original Maturity
Issuance 2033 Notes	August 2023	$	500,000		5.600%	October 2033
Issuance 2034 Notes	May 2024		500,000		5.500%	June 2034
Redemption 2024 Notes	June 2024		(350,000	)	3.900%	June 2024

In addition to the transactions outlined above, the Credit Facility had a weighted average outstanding balance of $111,966,000 with a weighted average interest rate of 6.26% for the six months ended June 30, 2024 compared to a weighted average outstanding balance of $228,576,000 with a weighted average interest rate of 5.67% for the six months ended June 30, 2023.

Liquidity and Capital Resources

NNN's demand for funds has been, and will continue to be, primarily for (i) payment of operating expenses and dividends, (ii) property acquisitions and construction commitments, (iii) capital expenditures, (iv) payment of principal and interest on its outstanding indebtedness, and (v) other investments.

Financing Strategy. NNN's financing objective is to manage its capital structure effectively in order to provide sufficient capital to execute its operating strategy while servicing its debt requirements, maintaining its investment grade credit rating, staggering debt maturities and providing value to NNN's stockholders. NNN's capital resources have and will continue to include, if available (i) proceeds from issuing debt or equity in the capital markets; (ii) secured or unsecured borrowings from banks or other lenders; (iii) proceeds from the sale of Properties; and (iv) to a lesser extent, by internally generated funds as well as undistributed funds from operations. However, there can be no assurance that additional financing or capital will be available, or that the terms will be acceptable or advantageous to NNN.

NNN typically expects to fund both its short-term and long-term liquidity requirements, including investments in additional properties, with cash and cash equivalents, cash provided from operations, borrowings from NNN's Credit Facility or proceeds from the sale of Properties. As of June 30, 2024, NNN had $16,802,000 of cash, cash equivalents and restricted cash or cash held in escrow and $1,188,000,000 available for future borrowings under the Credit Facility. NNN may also fund liquidity requirements with new debt or equity issuances, although newly issued debt may be at higher interest rates than the rates on NNN's existing outstanding debt. NNN has the ability to limit future property acquisitions and strategically increase property dispositions. NNN expects these sources of liquidity and the discretionary nature of its property acquisition funding needs will allow NNN to meet its financial obligations over the long term.

Cash Flows. NNN had $16,802,000 of cash, cash equivalents and restricted cash, of which $14,672,000 was restricted cash or cash held in escrow at June 30, 2024. The table below summarizes NNN's cash flows (dollars in thousands):

	Six Months Ended June 30,
	2024			2023
Cash, cash equivalents and restricted cash:
Provided by operating activities	$	311,194		$	299,294
Used in investing activities		(139,348	)		(288,109	)
Used in financing activities		(160,199	)		(12,711	)
Increase (decrease)		11,647			(1,526	)
Net cash at beginning of period		5,155			6,778
Net cash at end of period	$	16,802		$	5,252

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Cash flow activities include:

Operating Activities. Cash provided by operating activities represents cash received primarily from rental income and interest income less cash used for general and administrative expenses. NNN's cash flow from operating activities has been sufficient to pay the distributions for each period presented. The change in cash provided by operations for the six months ended June 30, 2024 and 2023, is primarily the result of changes in revenues and expenses as discussed in “Results of Operations.” Cash generated from operations is expected to fluctuate in the future.

Investing Activities. Changes in cash for investing activities are primarily attributable to the acquisitions and dispositions of Properties as discussed in "Results of Operations – Property Analysis." NNN typically uses cash on hand, borrowings from its Credit Facility or proceeds from the sale of Properties to fund the acquisition of its Properties.

Financing Activities. NNN's financing activities for the six months ended June 30, 2024, included the following significant transactions:

•$120,000,000 in net repayments of NNN's Credit Facility,

•$489,390,000 in net proceeds from the issuance in May of the 5.500% notes payable due in June 2034,

•$350,000,000 payment in June for the redemption of the 3.900% notes payable due in June 2024,

•$33,493,000 from the issuance of 803,443 shares of common stock in connection with the at-the-market equity program ("ATM"),

•$1,313,000 from the issuance of 34,309 shares of common stock in connection with the Dividend Reinvestment and Stock Purchase Plan ("DRIP"), and

•$205,843,000 in dividends paid to common stockholders.

Material Cash Requirements

NNN's material cash requirements include (i) long-term debt maturities; (ii) interest on long-term debt; (iii) common stock dividends (although all future distributions will be declared and paid at the discretion of the Board of Directors); and (iv) to a lesser extent, Property construction and other Property related costs that may arise.

The table below presents material cash requirements related to NNN's long-term obligations outstanding as of June 30, 2024 (see "Capital Structure") (dollars in thousands):

	Date of Obligation
	Total		2024		2025		2026		2027		2028		Thereafter
Long-term debt(1)	$	4,450,000	$	—	$	400,000	$	350,000	$	400,000	$	400,000	$	2,900,000
Long-term debt – interest(2)		2,151,631		89,125		176,250		161,725		146,733		132,067		1,445,731
Credit Facility		12,000		—		—		—		—		12,000		—
Headquarters office lease		9,687		421		210		981		1,005		1,030		6,040
Total contractual cash obligations	$	6,623,318	$	89,546	$	576,460	$	512,706	$	547,738	$	545,097	$	4,351,771

(1)	Includes only principal amounts outstanding under notes payable and excludes unamortized note discounts and debt costs.
(2)	Interest calculation on notes payable based on stated rate of the principal amount.

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Property Construction. NNN has committed to fund construction on 27 Properties. The improvements of such Properties are estimated to be completed within 12 to 18 months. These construction commitments, at June 30, 2024, are outlined in the table below (dollars in thousands):

Total commitment(1)	$	249,365
Less amount funded		(174,649	)
Remaining commitment	$	74,716

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

Management anticipates satisfying these obligations with a combination of NNN's cash provided from operations, current capital resources on hand, its Credit Facility, debt or equity financings and property dispositions.

Properties. Typically, the Properties are leased under long-term triple-net leases, which require the tenant to pay all utilities and real estate taxes and assessments, to maintain the interior and exterior of the Property, and to carry property and liability insurance coverage. Therefore, management anticipates that capital demands to meet obligations with respect to these Properties will be modest for the foreseeable future and can be met with funds from operations and working capital. Certain Properties are subject to leases under which NNN retains responsibility for specific costs and expenses associated with the Property. Management anticipates the costs associated with these Properties, NNN's vacant Properties or those Properties that become vacant will also be met with funds from operations and working capital. NNN may be required to borrow under its Credit Facility or use other sources of capital in the event of significant capital expenditures or major repairs.

The lost revenues and increased property expenses resulting from vacant Properties or the inability to collect lease payments could have a material adverse effect on the liquidity and results of operations if NNN is unable to re-lease the Properties at comparable rental rates and in a timely manner.

As of June 30, 2024, NNN owned 26 vacant, un-leased Properties which accounted for less than one percent of total Properties, and approximately one percent of aggregate gross leasable area held in the Property Portfolio.

Additionally, as of July 31, 2024, 0.7 percent of total annualized base rent, 1.0 percent of total Properties and 1.8 percent of aggregate gross leasable area held in the Property Portfolio, was leased to two tenants currently in bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. As a result, these tenants have the right to reject or affirm their leases with NNN.

NNN generally monitors the financial performance of its significant tenants on an ongoing basis.

Dividends. One of NNN's primary objectives is to distribute a substantial portion of its funds available from operations to its stockholders in the form of dividends, while retaining sufficient cash for reserves and working capital purposes and maintaining its status as a REIT.

The following table outlines the dividends declared and paid for NNN's common stock (dollars in thousands, except per share data):

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Dividends	$	103,159	$	99,745	$	205,843	$	199,146
Per share		0.5650		0.5500		1.1300		1.1000

In July 2024, NNN declared a dividend of $0.5800 per share which is payable in August 2024 to its common stockholders of record as of July 31, 2024.

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Capital Structure

NNN has used, and expects to use in the future, various forms of debt and equity securities primarily to fund property acquisitions and construction on its Properties and to pay down or refinance its outstanding debt.

The following is a summary of NNN's total outstanding debt as of (dollars in thousands):

	June 30, 2024		Percentage of Total			December 31, 2023		Percentage of Total
Line of credit payable	$	12,000		0.3	%	$	132,000		3.0	%
Notes payable		4,370,807		99.7	%		4,228,544		97.0	%
Total outstanding debt	$	4,382,807		100.0	%	$	4,360,544		100.0	%

Line of Credit Payable. In April 2024, NNN amended and restated its credit agreement to increase borrowing capacity under its unsecured revolving credit facility from $1,100,000,000 to $1,200,000,000 and amended certain other terms under the former revolving credit facility (as the context requires, the previous and new revolving credit facility, the "Credit Facility"). The Credit Facility had a weighted average outstanding balance of $111,966,000 and a weighted average interest rate of 6.26% during the six months ended June 30, 2024. The Credit Facility has a base interest rate of the Secured Overnight Financing Rate ("SOFR") plus a SOFR adjustment of 10 basis points ("Adjusted SOFR"). The Credit Facility bears interest at Adjusted SOFR plus 77.5 basis points; however, such interest rate may change pursuant to a tiered interest rate structure based on NNN's debt rating. Additionally, as part of NNN's environmental, social and governance ("ESG") initiative, pricing may be reduced if specified ESG metrics are achieved. The Credit Facility matures in April 2028, unless the Company exercises its options to extend maturity to April 2029. The Credit Facility also includes an accordion feature which permits NNN to increase the facility size up to $2,000,000,000, subject to lender approval. In connection with the Credit Facility, loan costs are classified as debt costs on the Condensed Consolidated Balance Sheets. As of June 30, 2024, there was $12,000,000 outstanding and $1,188,000,000 available for future borrowings under the Credit Facility, and NNN was in compliance with each of the Credit Facility financial covenants.

Universal Shelf Registration Statement. In August 2023, NNN filed a shelf registration statement with the Securities and Exchange Commission (the "Commission") which became automatically effective ("Universal Shelf"). The Universal Shelf permits the issuance by NNN of an indeterminate amount of debt and equity securities, including preferred stock, depositary shares, common stock, stock purchase contracts, rights, warrants and units.

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Debt Securities – Notes Payable. Each of NNN's outstanding series of unsecured notes is summarized in the table below (dollars in thousands):

Notes(1)	Issue Date	Principal		Discount(2)		Net Price		Stated Rate	Effective Rate(3)	Maturity Date
2025(4)	October 2015	$	400,000	$	964	$	399,036	4.000%	4.029%	November 2025(5)
2026(4)	December 2016		350,000		3,860		346,140	3.600%	3.733%	December 2026(5)
2027(4)	September 2017		400,000		1,628		398,372	3.500%	3.548%	October 2027(5)
2028(4)	September 2018		400,000		2,848		397,152	4.300%	4.388%	October 2028(5)
2030(4)	March 2020		400,000		1,288		398,712	2.500%	2.536%	April 2030
2033	August 2023		500,000		11,620		488,380	5.600%	5.905%	October 2033
2034	May 2024		500,000		6,160		493,840	5.500%	5.662%	June 2034
2048	September 2018		300,000		4,239		295,761	4.800%	4.890%	October 2048
2050	March 2020		300,000		6,066		293,934	3.100%	3.205%	April 2050
2051	March 2021		450,000		8,406		441,594	3.500%	3.602%	April 2051
2052(4)	September 2021		450,000		10,422		439,578	3.000%	3.118%	April 2052

(1)	The proceeds from each note issuance were used to (i) pay down the outstanding balance on NNN's Credit Facility, (ii) redeem notes payable prior to maturity, (iii) redeem outstanding preferred stock, (iv) fund future property acquisitions, and/or (v) for general corporate purposes.
(2)	The note discounts are amortized to interest expense over the respective term of each debt obligation using the effective interest method.
(3)	Includes the effects of the discount at issuance.
(4)	NNN entered into forward starting swaps which hedged the risk of changes in forecasted interest payments on forecasted issuance of long-term debt. Upon the issuance of a series of unsecured notes, NNN terminated such derivatives, and the resulting fair value was deferred in other comprehensive income. The deferred liability (asset) is being amortized over the term of the respective notes using the effective interest method.
(5)	The aggregate principal balance of the unsecured note maturities for the next five years is $1,550,000.

Each series of the notes represents senior, unsecured obligations of NNN and is subordinated to all secured debt of NNN. NNN may redeem each series of notes, in whole or in part, at any time prior to the par call date for the notes at the redemption price as set forth in the applicable supplemental indenture relating to the notes; provided, however, that if NNN redeems the notes on or after the par call date, the redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date.

In connection with the outstanding debt offerings, NNN incurred debt issuance costs totaling $43,820,000 consisting primarily of underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses. Debt issuance costs for all note issuances have been deferred and presented as a reduction to notes payable and are being amortized over the term of the respective notes using the effective interest method.

In accordance with the terms of the indentures, pursuant to which NNN's notes have been issued, NNN is required to meet certain restrictive financial covenants, which, among other things, require NNN to maintain (i) certain leverage ratios and (ii) certain interest coverage. At June 30, 2024, NNN was in compliance with those covenants.

31

Equity Securities

At-The-Market Offerings. NNN has established an ATM which allows NNN to sell shares of common stock from time to time. The following outlines NNN's ATM:

	2023 ATM	2020 ATM
Shelf registration statement:
Effective date	August 2023	August 2020
Termination date	August 2026	August 2023
Total allowable shares	17,500,000	17,500,000
Total shares issued as of June 30, 2024	803,443	7,722,511

The following table outlines the common stock issuances pursuant to NNN's ATM (dollars in thousands, except per share data):

	Six Months Ended June 30,
	2024		2023
Shares of common stock		803,443		650,135
Average price per share (net)	$	41.69	$	43.98
Net proceeds	$	33,493	$	28,592
Stock issuance costs(1)	$	234	$	558

(1) Stock issuance costs consist primarily of underwriters' fees and commissions, and legal and accounting fees.

Dividend Reinvestment and Stock Purchase Plan. In February 2024, NNN filed a shelf registration statement for its DRIP with the Commission that was automatically effective, and permits NNN to issue up to 4,000,000 shares of common stock. NNN's DRIP provides an economical and convenient way for current stockholders and other interested new investors to invest in NNN's common stock. The following outlines the common stock issuances pursuant to NNN's DRIP (dollars in thousands):

	Six Months Ended June 30,
	2024		2023
Shares of common stock		34,309		35,922
Net proceeds	$	1,313	$	1,615

Critical Accounting Estimates

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles. The unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The preparation of NNN's unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as other disclosures in the unaudited condensed consolidated financial statements. Estimates are sensitive to evaluations by management about current and future expectations of market and economic conditions. On an ongoing basis, management evaluates its estimates and assumptions; however, actual results may differ from these estimates and assumptions, which in turn could have a material impact on NNN's consolidated financial statements. A summary of NNN's critical accounting estimates is included in NNN's 2023 Annual Report. NNN has not made any material changes to these policies during the periods covered by this Quarterly Report on Form 10-Q.

32

Item 3. Quantitative and Qualitative Disclosures About Market Risk

NNN is exposed to interest rate risk primarily as a result of its variable rate Credit Facility and its fixed rate long-term debt which is used to finance NNN's Property acquisitions and development activities, as well as for general corporate purposes. NNN's interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to reduce overall borrowing costs. To achieve its objectives, NNN borrows at both fixed and variable rates on its long-term debt and periodically uses derivatives to hedge the interest rate risk of future borrowings. As of June 30, 2024, NNN had no outstanding derivatives.

As of June 30, 2024, NNN's variable rate Credit Facility had $12,000,000 outstanding and a weighted average outstanding balance of $111,966,000 with a weighted average interest rate of 6.26% for the six months ended June 30, 2024 compared to a weighted average outstanding balance of $228,576,000 with a weighted average interest rate of 5.67% for the same period in 2023.

The information in the table below summarizes NNN's market risks associated with its debt obligations outstanding. The table presents, by year of expected maturity, principal payments and related interest rates for debt obligations outstanding as of June 30, 2024. The table incorporates only those debt obligations that existed as of June 30, 2024, and it does not consider those debt obligations or positions which could arise after this date and therefore has limited predictive value. As a result, NNN's ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, NNN's hedging strategies at that time and interest rates. If interest rates on NNN's variable rate debt increased by one percent, NNN's interest expense would have increased by less than one percent for the six months ended June 30, 2024.

Debt Obligations(1) (dollars in thousands)
	Variable Rate Debt					Fixed Rate Debt
	Credit Facility					Unsecured Debt(2)
	Debt Obligation		Weighted Average Interest Rate			Principal Debt Obligation		Effective Interest Rate
2024	$	—		—		$	—		—
2025		—		—			400,000		4.03	%
2026		—		—			350,000		3.73	%
2027		—		—			400,000		3.55	%
2028		12,000		6.26	%		400,000		4.39	%
Thereafter		—		—			2,900,000		4.22	%	(3)
Total	$	12,000		6.26	%	$	4,450,000		4.12	%
Fair Value:
June 30, 2024	$	12,000				$	3,864,675
December 31, 2023	$	132,000				$	3,801,367

(1)	NNN's unsecured debt obligations have a weighted average interest rate of 4.1% and a weighted average maturity of 12.6 years.
(2)	Includes NNN's notes payable, each exclude unamortized discounts and debt costs. The fair value is based upon quoted market prices as of the close of the period, which is a Level 1 valuation since NNN's notes payable are publicly traded on the over-the-counter market.
(3)	Weighted average effective interest rate for years after 2028.

33

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. An evaluation was performed under the supervision and with the participation of NNN's management, including NNN's Chief Executive Officer, Chief Financial Officer and Chief Accounting and Technology Officer ("NNN's Chief Officers"), of the effectiveness as of June 30, 2024, of the design and operation of NNN's disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on that evaluation, NNN's Chief Officers concluded that the design and operation of these disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting. There has been no change in NNN's internal control over financial reporting that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, NNN's internal control over financial reporting.

34

PART II. OTHER INFORMATION

Item 1. Legal Proceedings. Not applicable.

Item 1A. Risk Factors.

There were no material changes in NNN's risk factors disclosed in Item 1A. Risk Factors in NNN's Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. Not applicable.

Item 3. Defaults Upon Senior Securities. Not applicable.

Item 4. Mine Safety Disclosures. Not applicable.

Item 5. Other Information. Not applicable.

Item 6. Exhibits

The following exhibits are filed with the Securities and Exchange Commission ("Commission") as a part of this report, unless otherwise noted, each exhibit was previously filed with the Commission and is incorporated by reference below.

4.	Instruments Defining the Rights of Security Holders, Including Indentures
		4.1	Form of Twenty-second Supplemental Indenture between the Registrant and U.S. Bank Trust Company, National Association, relating to 5.500% Notes due 2034 (filed on May 29, 2024 as Exhibit 4.1 to Registrant's Current Report on Form 8-K).
		4.2	Form of 5.500% Notes due 2034 (filed on May 29, 2024 as Exhibit 4.2 to Registrant's Current Report on Form 8-K).
10.	Material Contracts
		10.1	Third Amended and Restated Credit Agreement, dated April 16, 2024, by and among the Registrant, Wells Fargo Bank, National Association, as Administrative Agent, and a syndicate of lenders named therein (filed on April 17, 2024 as Exhibit 10.1 to the Registrant's Current Report on Form 8-K).
31.	Section 302 Certifications(1)
		31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
		31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.	Section 906 Certifications(1)
		32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
		32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

35

101.	Interactive Data File
		101.1	The following materials from the Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2024, are formatted in Inline Extensible Business Reporting Language ("Inline XBRL"): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of income and comprehensive income, (iii) condensed consolidated statements of equity, (iv) condensed consolidated statements of cash flows and (v) notes to condensed consolidated financial statements.

104.	Cover Page Interactive Data File
		104.1	The cover page XBRL tags are embedded within the Inline XBRL document and included in Exhibit 101.
(1)	In accordance with Item 601(b)(32) of Regulation S-K, this exhibit is not deemed "filed" for purposes of section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DATED this 1st day of August, 2024.

NNN REIT, INC.
By:	/s/ Stephen A. Horn, Jr.
	Stephen A. Horn, Jr.
	Chief Executive Officer, President and Director
By:	/s/ Kevin B. Habicht
	Kevin B. Habicht
	Chief Financial Officer, Executive Vice President and Director

37

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen A. Horn, Jr., certify that:

1.I have reviewed this report on Form 10-Q of NNN REIT, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 1, 2024		/s/ Stephen A. Horn, Jr.
Date	Name:	Stephen A. Horn, Jr.
	Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Kevin B. Habicht, certify that:

1.I have reviewed this report on Form 10-Q of NNN REIT, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 1, 2024		/s/ Kevin B. Habicht
Date	Name:	Kevin B. Habicht
	Title:	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Stephen A. Horn, Jr., Chief Executive Officer and President, certifies, to the best of his knowledge, that (1) this Quarterly Report of NNN REIT, Inc. (“NNN”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (this “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and (2) the information contained in this Report fairly presents, in all material respects, the financial condition of NNN as of June 30, 2024 and December 31, 2023 and its results of operations for the quarters and six months ended June 30, 2024 and 2023.

August 1, 2024		/s/ Stephen A. Horn, Jr.
Date	Name:	Stephen A. Horn, Jr.
	Title:	President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to NNN and will be retained by NNN and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Kevin B. Habicht, Chief Financial Officer and Executive Vice President, certifies, to the best of his knowledge, that (1) this Quarterly Report of NNN REIT, Inc. (“NNN”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (this “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and (2) the information contained in this Report fairly presents, in all material respects, the financial condition of NNN as of June 30, 2024 and December 31, 2023 and its results of operations for the quarters and six months ended June 30, 2024 and 2023.

August 1, 2024		/s/ Kevin B. Habicht
Date	Name:	Kevin B. Habicht
	Title:	Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to NNN and will be retained by NNN and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover - shares	6 Months Ended
	Jun. 30, 2024	Jul. 29, 2024
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-11290
Entity Registrant Name	NNN REIT, INC.
Entity Central Index Key	0000751364
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	56-1431377
Entity Address, Address Line One	450 South Orange Avenue, Suite 900
Entity Address, City or Town	Orlando
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32801
City Area Code	407
Local Phone Number	265-7348
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	NNN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		183,660,240

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
ASSETS
Real estate portfolio, net of accumulated depreciation and amortization	$ 8,586,936	$ 8,535,851
Cash and cash equivalents	2,130	1,189
Restricted cash or cash held in escrow	14,672	3,966
Receivables, net of allowance of $639 and $669, respectively	2,551	3,649
Accrued rental income, net of allowance of $4,087 and $4,168, respectively	33,956	34,611
Debt costs, net of accumulated amortization of $25,552 and $23,952, respectively	10,460	3,243
Other assets	76,590	79,459
Total assets	8,727,295	8,661,968
Liabilities:
Line of credit payable	12,000	132,000
Notes payable, net of unamortized discount and unamortized debt costs	4,370,807	4,228,544
Accrued interest payable	30,931	34,374
Other liabilities	118,635	109,593
Total liabilities	4,532,373	4,504,511
Stockholders’ equity:
Common stock, $0.01 par value. Authorized 375,000,000 shares; 183,666,067 and 182,474,770 shares issued and outstanding, respectively	1,838	1,826
Capital in excess of par value	5,012,642	4,971,625
Accumulated deficit	(810,689)	(805,883)
Accumulated other comprehensive income (loss)	(8,869)	(10,111)
Total equity	4,194,922	4,157,457
Total liabilities and equity	$ 8,727,295	$ 8,661,968

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Allowance on receivables	$ 639	$ 669
Accrued rental income allowance	4,087	4,168
Debt costs accumulated amortization	$ 25,552	$ 23,952
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	375,000,000	375,000,000
Common stock, shares issued (in shares)	183,666,067	182,474,770
Common stock, shares outstanding (in shares)	183,666,067	182,474,770

XML

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues:
Rental income	$ 216,140	$ 202,426	$ 430,965	$ 406,056
Interest and other income from real estate transactions	673	214	1,255	692
Total revenues	216,813	202,640	432,220	406,748
Operating expenses:
General and administrative	11,789	10,740	24,373	22,991
Real estate	6,758	6,836	13,912	13,682
Depreciation and amortization	62,503	59,875	123,118	119,023
Leasing transaction costs	20	52	53	127
Impairment losses – real estate, net of recoveries	944	34	2,148	2,674
Executive retirement costs	153	309	470	732
Total operating expenses	82,167	77,846	164,074	159,229
Gain on disposition of real estate	17,621	13,930	22,442	20,230
Earnings from operations	152,267	138,724	290,588	267,749
Other expenses (revenues):
Interest and other income	(976)	(74)	(1,095)	(107)
Interest expense	46,577	40,094	90,646	78,985
Total other expenses (revenues)	45,601	40,020	89,551	78,878
Net earnings	$ 106,666	$ 98,704	$ 201,037	$ 188,871
Net earnings per share
Basic (in dollars per share)	$ 0.58	$ 0.54	$ 1.1	$ 1.04
Diluted (in dollars per share)	$ 0.58	$ 0.54	$ 1.1	$ 1.04
Weighted average shares outstanding:
Basic (in shares)	182,438,791	181,092,031	182,119,471	180,969,809
Diluted (in shares)	182,807,374	181,627,857	182,528,333	181,544,275
Other comprehensive income:
Net earnings	$ 106,666	$ 98,704	$ 201,037	$ 188,871
Amortization of interest rate hedges	610	616	1,242	1,223
Total comprehensive income	$ 107,276	$ 99,320	$ 202,279	$ 190,094

XML

Condensed Consolidated Statements of Equity (Unaudited) - USD ($)	Total	Common Stock	Capital in Excess of Par Value	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Balances at Dec. 31, 2022	$ 4,123,502,000	$ 1,815,000	$ 4,928,034,000	$ (793,765,000)	$ (12,582,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	188,871,000			188,871,000
Dividends declared and paid:
Common stock dividends declared and paid	(197,691,000)		1,455,000	(199,146,000)
Issuance of common stock:
Director compensation	539,000		539,000
Stock purchase plan	160,000		160,000
ATM equity program	29,150,000	7,000	29,143,000
Restricted shares, net of forfeitures		3,000	(3,000)
Stock issuance costs	(558,000)		(558,000)
Amortization of deferred compensation	5,038,000		5,038,000
Amortization of interest rate hedges	1,223,000				1,223,000
Balances at Jun. 30, 2023	4,150,234,000	1,825,000	4,963,808,000	(804,040,000)	(11,359,000)
Balances at Mar. 31, 2023	4,134,872,000	1,822,000	4,948,024,000	(802,999,000)	(11,975,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	98,704,000			98,704,000
Dividends declared and paid:
Common stock dividends declared and paid	(99,014,000)		731,000	(99,745,000)
Issuance of common stock:
Director compensation	270,000		270,000
Stock purchase plan	62,000		62,000
ATM equity program	12,782,000	3,000	12,779,000
Stock issuance costs	(264,000)		(264,000)
Amortization of deferred compensation	2,206,000		2,206,000
Amortization of interest rate hedges	616,000				616,000
Balances at Jun. 30, 2023	4,150,234,000	1,825,000	4,963,808,000	(804,040,000)	(11,359,000)
Balances at Dec. 31, 2023	4,157,457,000	1,826,000	4,971,625,000	(805,883,000)	(10,111,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	201,037,000			201,037,000
Dividends declared and paid:
Common stock dividends declared and paid	(204,537,000)		1,306,000	(205,843,000)
Issuance of common stock:
Director compensation	639,000		639,000
Stock purchase plan	83,000		83,000
ATM equity program	33,727,000	8,000	33,719,000
Restricted shares, net of forfeitures		4,000	(4,000)
Stock issuance costs	(310,000)		(310,000)
Amortization of deferred compensation	5,584,000		5,584,000
Amortization of interest rate hedges	1,242,000				1,242,000
Balances at Jun. 30, 2024	4,194,922,000	1,838,000	5,012,642,000	(810,689,000)	(8,869,000)
Balances at Mar. 31, 2024	4,174,858,000	1,835,000	4,996,698,000	(814,196,000)	(9,479,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	106,666,000			106,666,000
Dividends declared and paid:
Common stock dividends declared and paid	(102,589,000)		570,000	(103,159,000)
Issuance of common stock:
Director compensation	319,000		319,000
Stock purchase plan	51,000		51,000
ATM equity program	12,802,000	3,000	12,799,000
Stock issuance costs	(132,000)		(132,000)
Amortization of deferred compensation	2,337,000		2,337,000
Amortization of interest rate hedges	610,000				610,000
Balances at Jun. 30, 2024	$ 4,194,922,000	$ 1,838,000	$ 5,012,642,000	$ (810,689,000)	$ (8,869,000)

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Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Common stock dividends declared and paid (in dollars per share)	$ 0.565	$ 0.55	$ 1.13	$ 1.1
Issuance of common stock - Director compensation (in shares)	9,655	7,623	19,224	15,806
Issuance of common stock - Stock purchase plan (in shares)	1,204	1,444	1,987	3,576
Issuance of common stock - ATM equity program (in shares)	303,443	300,326	803,443	650,135
Issuance of common stock - restricted shares, net (in shares)			349,975	255,667

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net earnings		$ 201,037	$ 188,871
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		123,118	119,023
Impairment losses – real estate, net of recoveries		2,148	2,674
Amortization of notes payable discount		1,384	869
Amortization of debt costs		3,088	2,401
Amortization of mortgages payable premium		0	(21)
Amortization of interest rate hedges		1,242	1,223
Gain on disposition of real estate		(22,442)	(20,230)
Performance incentive plan expense		6,852	6,290
Performance incentive plan payment		(1,274)	(916)
Change in operating assets and liabilities, net of assets acquired and liabilities assumed:
Decrease in receivables		1,098	550
Decrease (increase) in accrued rental income		131	(1,003)
Increase in other assets		(1,602)	(721)
Increase (decrease) in accrued interest payable		(3,443)	953
Increase (decrease) in other liabilities		61	(721)
Other		(204)	52
Net cash provided by operating activities		311,194	299,294
Cash flows from investing activities:
Proceeds from the disposition of real estate		86,268	40,450
Additions to real estate		(224,986)	(327,739)
Principal payments received on mortgages and notes receivable		344	324
Other		(974)	(1,144)
Net cash used in investing activities		(139,348)	(288,109)
Cash flows from financing activities:
Proceeds from line of credit payable		408,000	513,500
Repayment of line of credit payable		(528,000)	(347,200)
Repayment of mortgages payable		0	(9,947)
Proceeds from notes payable		493,840	0
Repayment of notes payable		(350,000)	0
Payment of debt issuance costs		(13,014)	(125)
Proceeds from issuance of common stock		35,116	30,765
Stock issuance costs		(298)	(558)
Payment of common stock dividends		(205,843)	(199,146)
Net cash used in financing activities		(160,199)	(12,711)
Net increase (decrease) in cash, cash equivalents and restricted cash		11,647	(1,526)
Cash, cash equivalents and restricted cash at beginning of period	[1]	5,155	6,778
Cash, cash equivalents and restricted cash at end of period	[1]	16,802	5,252
Supplemental disclosure of cash flow information:
Interest paid, net of amount capitalized		91,851	74,686
Supplemental disclosure of noncash investing and financing activities:
Change in other comprehensive income		1,242	1,223
Right-of-use asset recorded in connection with lease liability		0	6,401
Change in work in progress accrual		$ 10,048	$ 8,986

[1] Cash, cash equivalents and restricted cash is the aggregate of cash and cash equivalents and restricted cash and cash held in escrow from the Condensed Consolidated Balance Sheets. As of June 30, 2024, December 31, 2023 and June 30, 2023, NNN had restricted cash of $14,672, $3,966 and $2,971, respectively.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Statement of Cash Flows [Abstract]
Restricted cash or cash held in escrow	$ 14,672	$ 3,966	$ 2,971

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Organization and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Summary of Significant Accounting Policies

Note 1 – Organization and Summary of Significant Accounting Policies:

Organization and Nature of Business. NNN REIT, Inc., a Maryland corporation, is a fully integrated real estate investment trust (“REIT”) formed in 1984. The term "NNN" or the "Company" refers to NNN REIT, Inc. and all of its consolidated subsidiaries. NNN may elect to treat certain of its subsidiaries as taxable REIT subsidiaries ("TRS").

NNN's assets primarily include real estate assets. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment ("Properties" or "Property Portfolio", or individually a "Property").

	June 30, 2024
Property Portfolio:
Total Properties	3,548
Gross leasable area (square feet)	36,095,000
States	49
Weighted average remaining lease term (years)	10.0

NNN's operations are reported within one reportable segment in the unaudited condensed consolidated financial statements and all properties are considered part of the Properties or Property Portfolio. As such, property counts and calculations involving property counts reflect all NNN Properties.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles. The unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. Operating results for the quarter and six months ended June 30, 2024, may not be indicative of the results that may be expected for the year ending December 31, 2024. Amounts as of December 31, 2023, included in the condensed consolidated financial statements have been derived from the audited consolidated financial statements as of that date. The unaudited condensed consolidated financial statements, included herein, should be read in conjunction with the consolidated financial statements and notes thereto as well as Management's Discussion and Analysis of Financial Condition and Results of Operations in NNN's Form 10-K for the year ended December 31, 2023.

Principles of Consolidation. NNN's unaudited condensed consolidated financial statements include the accounts of each of the respective majority owned and controlled affiliates, including transactions whereby NNN has been determined to be the primary beneficiary in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") guidance included in Topic 810, Consolidation. All significant intercompany account balances and transactions have been eliminated.

Real Estate Portfolio. NNN records the acquisition of real estate at cost, including acquisition and closing costs. The cost of Properties developed or funded by NNN includes direct and indirect costs of construction, property taxes, interest, third-party costs and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. NNN recorded $3,476,000 and $1,126,000 in capitalized interest during the development period for the six months ended June 30, 2024 and 2023, respectively, of which $1,617,000 and $721,000 was recorded during the quarters ended June 30, 2024 and 2023, respectively.

Purchase Accounting for Acquisition of Real Estate. In accordance with the FASB ASC guidance on business combinations, consideration for the real estate acquired is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and, if applicable, to identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, as applicable, based on their respective fair values.

The fair value estimate is sensitive to significant assumptions, such as establishing a range of relevant market assumptions for land, building and rent and where the acquired property falls within that range. These market assumptions for land, building and rent use the most relevant comparable properties for an acquisition. The final value relies upon ranking comparable properties' attributes from most to least similar.

The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then allocated to land, building and tenant improvements based on the determination of their fair values.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management's estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease and the renewal option terms if it is probable that the tenant will exercise options. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant will renew the lease for an option term whereby the Company amortizes the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is valued by comparing the purchase price paid for a property after adjusting for existing in-place leases to the estimated fair value of the property as-if-vacant, determined as set forth above. This intangible asset is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off in that period. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

Lease Accounting. NNN records its leases on the Property Portfolio in accordance with FASB ASC Topic 842, Leases ("ASC 842"). In addition, NNN records right-of-use assets and operating lease liabilities as lessee under operating leases in accordance with ASC 842.

NNN's real estate is generally leased to tenants on a net lease basis, whereby the tenant is responsible for all operating expenses relating to the Property, including property taxes, insurance, maintenance, repairs and capital expenditures. The leases on the Property Portfolio are predominantly classified as operating leases and are accounted for as follows:

Operating method – Properties with leases accounted for using the operating method are recorded at the cost of the real estate and depreciated on the straight-line method over their estimated remaining useful lives, which generally range from 20 to 40 years for buildings and improvements and 15 years for land improvements. Leasehold interests are amortized on the straight-line method over the terms of their respective leases. Revenue is recognized as rentals are earned and expenses (including depreciation) are charged to operations as incurred. When scheduled rentals vary during the lease term, income is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis.

Collectability. In accordance with ASC 842, NNN reviews the collectability of its rental income on an ongoing basis. NNN considers collectability indicators when analyzing accounts receivable (and accrued rent), historical bad debt levels, tenant credit-worthiness and current economic trends, all of which assists in evaluating the probability of outstanding and future rental income collections and the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected recovery of pre-petition and post-petition bankruptcy claims.

When NNN deems the collection of rental income from a tenant not probable, uncollected previously recognized rental revenue and any related accrued rent are reversed as a reduction to rental income and, subsequently, any rental income is only recognized when cash receipts are received. At this point, a tenant is deemed cash basis for accounting purposes. If NNN subsequently deems the collection of rental income is probable, any related accrued rental income or expense is restored.

As a result of the review of collectability, NNN recorded a write-off of $473,000 and $348,000 of outstanding receivables and related accrued rent for certain tenants reclassified to cash basis for accounting purposes during the six months ended June 30, 2024 and 2023, respectively.

The following table summarizes those tenants classified as cash basis for accounting purposes as of June 30:

	2024				2023
Number of tenants		11				9
Cash basis tenants as a percent of:
Total Properties		3.4	%			5.0	%
Total annual base rent		5.0	%	(1)		7.1	%	(2)
Total gross leasable area		4.8	%			6.8	%

Based on annualized base rent for all leases in place at the end of each respective quarter.
	(1)	$837,568,000 as of June 30, 2024.
	(2)	$794,475,000 as of June 30, 2023.

During the six months ended June 30, 2024 and 2023, NNN recognized $20,883,000 and $30,088,000, respectively, of rental income from certain tenants for periods following their classification to cash basis for accounting purposes, of which $11,108,000 and $14,523,000 was recognized during the quarters ended June 30, 2024 and 2023, respectively.

NNN includes an allowance for doubtful accounts in rental income on the Condensed Consolidated Statements of Income and Comprehensive Income.

Real Estate – Held for Sale. Real estate held for sale is not depreciated and is recorded at the lower of cost or fair value, less cost to sell. On a quarterly basis, the Company evaluates its Properties for held for sale classification based on specific criteria as outlined in FASB ASC Topic 360, Property, Plant and Equipment, including management's intent to commit to a plan to sell the asset. NNN anticipates the disposition of Properties classified as held for sale to occur within 12 months. At June 30, 2024 and December 31, 2023, NNN had recorded real estate held for sale of $9,442,000 (six properties) and $4,573,000 (one property), respectively, in real estate portfolio on the Condensed Consolidated Balance Sheets. The property classified as held for sale as of December 31, 2023 was sold during the six months ended June 30, 2024.

Real Estate Dispositions. When real estate is disposed, the related cost, accumulated depreciation or amortization and any accrued rental income from operating leases and the net investment from direct financing leases are removed from the accounts, and gains and losses from the dispositions are reflected in income. FASB ASC Topic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets ("ASC 610-20"), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. An entity that transfers a nonfinancial asset in the scope of ASC 610-20 follows a two-step derecognition model to determine whether (and when) to derecognize the asset. NNN determined the key transactions impacted by ASC 610-20 are recorded in gain on disposition of real estate reported on the Condensed Consolidated Statements of Income and Comprehensive Income. In accordance with ASC 610-20, NNN evaluates any separate contracts or performance obligations to determine proper timing and/or amount of revenue recognition, as well as, transfer of control and transaction price allocation in determining the amount of gain or loss to record.

Impairment – Real Estate. NNN periodically assesses its long-lived real estate assets for possible impairment whenever certain events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. These indicators include, but are not limited to: changes in real estate market conditions, the ability of NNN to re-lease properties that are currently vacant or become vacant, properties reclassified as held for sale, persistent vacancies greater than one year, and properties leased to tenants in bankruptcy. Management evaluates whether an impairment in carrying value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), and the residual value of the real estate, with the carrying value of the individual asset. The future undiscounted cash flows are primarily driven by estimated future market rents. Future cash flow estimates are sensitive to the assumptions made by management regarding future market rents, which are affected by expectations about future market and economic conditions. If an impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its estimated fair value. NNN's Properties are leased primarily to retail tenants under long-term net leases and primarily held for investment. Generally, NNN's Property leases provide for initial terms of 10 to 20 years, with cash flows provided over the entire term.

Credit Losses on Financial Instruments. FASB ASC Topic 326, Financial Instruments – Credit Losses, requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings. The guidance requires a lifetime credit loss expected at inception and requires pooling of assets, which share similar risk characteristics. NNN is required to evaluate current economic conditions, as well as make future expectations of economic conditions. In addition, the measurement of the expected credit loss is over the asset's contractual term.

NNN held mortgages receivable, including accrued interest, of $705,000 and $1,002,000 included in other assets on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively, net of $14,000 and $64,000 allowance for credit loss, respectively. NNN periodically evaluates the allowance for credit loss based on the fair value of the collateral and a 15-year historical collectability trend analysis.

Cash and Cash Equivalents. NNN considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash and money market accounts. Cash equivalents are stated at cost plus accrued interest, which approximates fair value. Cash accounts maintained on behalf of NNN in demand deposits at commercial banks and money market funds may exceed federally insured levels or may be held in accounts without any federal insurance or any other insurance or guarantee. However, NNN has not experienced any losses in such accounts.

Restricted Cash and Cash Held in Escrow. Restricted cash and cash held in escrow may include (i) cash proceeds from the sale of assets held by qualified intermediaries in anticipation of the acquisition of replacement properties in tax-free exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) cash that has been placed in escrow for the future funding of construction commitments, or (iii) cash that is not immediately available to NNN. NNN held $14,672,000 and $3,966,000 in restricted cash and cash held in escrow as of June 30, 2024 and December 31, 2023, respectively.

Debt Costs – Line of Credit Payable. Debt costs incurred in connection with NNN's $1,200,000,000 unsecured revolving line of credit have been deferred and are being amortized to interest expense over the term of the loan commitment using the straight-line method, which approximates the effective interest method. NNN has recorded debt costs associated with the Credit Facility (as defined in "Note 3 – Line of Credit Payable") as an asset, in debt costs on the Condensed Consolidated Balance Sheets.

Debt Costs – Notes Payable. Debt costs incurred in connection with the issuance of NNN's unsecured notes have been deferred and are being amortized to interest expense over the term of the respective debt obligation using the effective interest method. NNN had debt costs of $43,820,000 and $42,595,000, included in notes payable on the Condensed Consolidated Balance Sheets, as of June 30, 2024 and December 31, 2023, respectively, net of accumulated amortization of $12,606,000 and $14,343,000, respectively.

Revenue Recognition. Rental revenues for properties under construction commence upon completion of construction of the leased asset and delivery of the leased asset to the tenant. Rental revenues for non-development real estate assets are recognized when earned in accordance with ASC 842, based on the terms of the lease of the leased asset. Leasehold interests are amortized on the straight-line method over the terms of their respective leases. When scheduled rentals vary during the lease term, income is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Lease termination fees are recognized when collected subsequent to the related lease that is cancelled and NNN no longer has continuing involvement with the former tenant with respect to that property.

Earnings Per Share. Earnings per share have been computed pursuant to the FASB guidance included in FASB ASC Topic 260, Earnings Per Share. The guidance requires classification of the Company's unvested restricted share units, which carry rights to receive nonforfeitable dividends, as participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period.

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per share using the two-class method (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Basic and Diluted Earnings:
Net earnings	$	106,666		$	98,704		$	201,037		$	188,871
Less: Earnings allocated to unvested restricted shares		(189	)		(162	)		(333	)		(295	)
Net earnings used in basic and diluted earnings per share	$	106,477		$	98,542		$	200,704		$	188,576
Basic and Diluted Weighted Average Shares Outstanding:
Weighted average shares outstanding		183,532,421			182,123,555			183,116,552			181,923,011
Less: Unvested restricted shares		(324,620	)		(295,441	)		(294,671	)		(267,861	)
Less: Unvested contingent restricted shares		(769,010	)		(736,083	)		(702,410	)		(685,341	)
Weighted average shares outstanding used in      basic earnings per share		182,438,791			181,092,031			182,119,471			180,969,809
Other dilutive securities		368,583			535,826			408,862			574,466
Weighted average shares outstanding used in      diluted earnings per share		182,807,374			181,627,857			182,528,333			181,544,275

Income Taxes. NNN has made an election to be taxed as a REIT under Sections 856 through 860 of the Code, and related regulations. NNN generally will not be subject to federal income taxes on taxable income it distributes to stockholders, provided it meets certain other requirements for qualifying as a REIT. As of June 30, 2024, NNN believes it has qualified as a REIT. Notwithstanding NNN's qualification for taxation as a REIT, NNN is subject to certain state and local income, franchise and excise taxes.

Fair Value Measurement. NNN's estimates of fair value of financial and non-financial assets and liabilities are based on the framework established in FASB ASC Topic 820, Fair Value Measurement. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The guidance describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

•Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.

•Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

Accumulated Other Comprehensive Income (Loss). The following table outlines the changes in accumulated other comprehensive income (loss) for the six months ended June 30, 2024 (dollars in thousands):

	Gain (Loss) on Cash Flow Hedges(1)
Beginning balance, December 31, 2023	$	(10,111	)
Reclassifications from accumulated other comprehensive income to net earnings		1,242		(2)
Ending balance, June 30, 2024	$	(8,869	)

(1) Additional disclosure is included in "Note 4 – Notes Payable and Derivatives".

(2) Recorded in interest expense on the Condensed Consolidated Statements of Income and Comprehensive Income. There is no income tax expense (benefit) resulting from this reclassification.

New Accounting Pronouncements. In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), effective for fiscal years, beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments in this update require public entities to provide enhanced disclosures primarily around segment expenses. On an annual and interim basis, entities will disclose significant segment expenses that are regularly provided to the chief operating decision maker and included with each measure of segment profit or loss, an amount for “other segment items” by reportable segment accompanied by a description of its composition, and all annual disclosures about segment profit and loss currently required by Topic 280 to be disclosed in interim periods. While NNN only has one reportable segment, NNN is currently evaluating the potential impact the adoption of ASU 2023-07 will have on its future disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), effective for annual periods beginning after December 15, 2024. The amendments in the update require public business entities on an annual basis to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold of equal to or greater than five percent of the amount computed by multiplying pretax income by the statutory income tax rate. The amendments also require that entities disclose on an annual basis information about the amount of income taxes paid disaggregated by federal, state, and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than five percent of total income taxes paid. The amendments eliminate some of the previous required disclosures for all entities relating to estimates of the change in unrecognized tax benefits reasonably possible within 12 months. NNN is currently evaluating the potential impact the adoption of ASU 2023-09 will have on its future disclosures.

Use of Estimates. Additional critical accounting policies of NNN include management's estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities which are required to prepare the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Significant accounting policies include management's estimates of the purchase accounting for acquisition of real estate, the recoverability of the carrying value of long-lived assets and management's evaluation of the probability of outstanding and future lease payment collections. Estimates are sensitive to evaluations by management about current and future expectations of market and economic conditions. Actual results could differ from those estimates.

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Real Estate

6 Months Ended

Jun. 30, 2024

Real Estate [Abstract]

Real Estate

Note 2 – Real Estate:

Real Estate – Portfolio

Leases. At June 30, 2024, NNN's real estate portfolio had a weighted average remaining lease term of 10.0 years and consisted of 3,539 leases classified as operating leases and an additional four leases accounted for as direct financing leases.

The following is a summary of the general structure of the leases in the Property Portfolio, although the specific terms of each lease can vary significantly. Typically, the Property leases provide for initial terms of 10 to 20 years. The Properties are generally leased under triple-net leases, pursuant to which the tenant typically bears responsibility for substantially all property costs and expenses associated with ongoing maintenance, repair, replacement and operation of the Property, including utilities, real estate taxes and assessments, and property and liability insurance. Certain Properties are subject to leases under which NNN retains responsibility for specific costs and expenses of the Property. NNN's leases provide for annual base rental payments (generally payable in monthly installments), and generally provide for limited increases in rent as a result of increases in the Consumer Price Index or fixed increases.

Generally, NNN's leases provide the tenant with one or more multi-year renewal options, subject to generally the same terms and conditions provided under the initial lease term, including rent increases. NNN's lease term is based on the non-cancellable base term unless economic incentives make it reasonably certain that an option period to extend the lease will be exercised, in which event NNN includes the renewal options. Some of the leases also provide that in the event NNN wishes to sell the Property subject to that lease, NNN first must offer the lessee the right to purchase the Property on the same terms and conditions as any offer which NNN intends to accept for the sale of the Property.

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

	June 30, 2024			December 31, 2023
Land and improvements(1)	$	2,888,355		$	2,878,400
Buildings and improvements		7,526,840			7,368,873
Leasehold interests		355			355
		10,415,550			10,247,628
Less accumulated depreciation and amortization		(1,958,444	)		(1,863,451	)
		8,457,106			8,384,177
Work in progress and improvements		117,754			144,068
Accounted for using the operating method		8,574,860			8,528,245
Accounted for using the direct financing method		2,634			3,033
Classified as held for sale(2)		9,442			4,573
	$	8,586,936		$	8,535,851

(1) Includes $56,895 and $96,464 in land for Properties under construction at June 30, 2024 and December 31, 2023, respectively.

(2) As of June 30, 2024, six Properties were classified as held for sale. The one property classified as held for sale as of December 31, 2023 was sold during the six months ended June 30, 2024.

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Rental income from operating leases	$	211,557	$	197,629	$	420,641	$	395,812
Earned income from direct financing leases		118		143		237		287
Percentage rent		259		291		1,147		1,054
Rental revenues		211,934		198,063		422,025		397,153
Real estate expense reimbursement from tenants		4,206		4,363		8,940		8,903
	$	216,140	$	202,426	$	430,965	$	406,056

Some leases provide for a free rent period or scheduled rent increases throughout the lease term. Such amounts are recognized on a straight-line basis over the terms of the leases.

For the six months ended June 30, 2024 and 2023, NNN recognized ($131,000) and $1,003,000, respectively, of net straight-line accrued rental income, net of reserves, of which ($95,000) and $534,000 of such income, net of reserves was recorded during the quarters ended June 30, 2024 and 2023, respectively.

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):

	June 30, 2024			December 31, 2023
Intangible lease assets (included in other assets):
Above-market in-place leases	$	14,875		$	15,297
Less: accumulated amortization		(11,977	)		(12,080	)
Above-market in-place leases, net	$	2,898		$	3,217
In-place leases	$	119,419		$	122,802
Less: accumulated amortization		(85,540	)		(85,332	)
In-place leases, net	$	33,879		$	37,470
Intangible lease liabilities (included in other liabilities):
Below-market in-place leases	$	40,631		$	41,244
Less: accumulated amortization		(29,058	)		(29,117	)
Below-market in-place leases, net	$	11,573		$	12,127

The amounts amortized as a net increase to rental income for above-market and below-market in-place leases for the six months ended June 30, 2024 and 2023, were $242,000 and $234,000, respectively, of which $125,000 and $122,000 were recorded for the quarters ended June 30, 2024 and 2023, respectively. The value of in-place leases amortized to expense for the six months ended June 30, 2024 and 2023, was $3,230,000 and $3,527,000, respectively, of which $1,583,000 and $1,767,000 was recorded for the quarters ended June 30, 2024 and 2023, respectively.

Real Estate – Dispositions

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

	Quarter Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	# 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	14	$	17,621	7	$	13,930	20	$	22,442	13	$	20,230

Real Estate – Commitments

NNN has committed to fund construction on 27 Properties. The improvements on such Properties are estimated to be completed within 12 to 18 months. These construction commitments, as of June 30, 2024, are outlined in the table below (dollars in thousands):

Total commitment(1)	$	249,365
Less amount funded		(174,649	)
Remaining commitment	$	74,716

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

Real Estate – Impairments

NNN periodically assesses its long-lived real estate assets for possible impairment whenever certain events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Total real estate impairments, net of recoveries	$	944	$	34	$	2,148	$	2,674
Number of Properties:
Vacant		2		—		2		3
Occupied		—		—		3		1

The valuation of impaired assets is determined using widely accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations and bona fide purchase offers received from third parties, which are Level 3 inputs. NNN may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate.

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Line of Credit Payable

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Line of Credit Payable

Note 3 – Line of Credit Payable:

In April 2024, NNN amended and restated its credit agreement to increase borrowing capacity under its unsecured revolving credit facility from $1,100,000,000 to $1,200,000,000 and amended certain other terms under the former revolving credit facility (as the context requires, the previous and new revolving credit facility, the "Credit Facility"). The Credit Facility had a weighted average outstanding balance of $111,966,000 and a weighted average interest rate of 6.26% during the six months ended June 30, 2024. The Credit Facility has a base interest rate of the Secured Overnight Financing Rate ("SOFR") plus a SOFR adjustment of 10 basis points ("Adjusted SOFR"). The Credit Facility bears interest at Adjusted SOFR plus 77.5 basis points; however, such interest rate may change pursuant to a tiered interest rate structure based on NNN's debt rating. Additionally, as part of NNN's environmental, social and governance ("ESG") initiative, pricing may be reduced if specified ESG metrics are achieved. The Credit Facility matures in April 2028, unless the Company exercises its options to extend maturity to April 2029. The Credit Facility also includes an accordion feature which permits NNN to increase the facility size up to $2,000,000,000, subject to lender approval. In connection with the Credit Facility, loan costs are classified as debt costs on the Condensed Consolidated Balance Sheets. As of June 30, 2024, there was $12,000,000 outstanding and $1,188,000,000 available for future borrowings under the Credit Facility, and NNN was in compliance with each of the Credit Facility financial covenants.

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Notes Payable and Derivatives

6 Months Ended

Jun. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Notes Payable and Derivatives

Note 4 – Notes Payable and Derivatives:

Additional information related to NNN's notes payable and derivatives is included in NNN's Annual Report on Form 10-K for the year ended December 31, 2023.

In May 2024, NNN filed a prospectus supplement to the prospectus contained in its August 2023 shelf registration statement (see "Note 5 – Stockholders' Equity") and issued $500,000,000 aggregate principal amount of 5.500% notes due June 2034 (the "2034 Notes").

The 2034 Notes were sold at a discount with an aggregate net price of $493,840,000 with interest payable annually on June 15 and December 15, commencing on December 15, 2024. The discount of $6,160,000 is being amortized to interest expense over the term of the notes using the effective interest method. The effective interest rate for the 2034 Notes after accounting for the note discount is 5.662%.

NNN received approximately $489,390,000 of net proceeds in connection with the issuance of the 2034 Notes, after incurring debt issuance costs consisting primarily of underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses, totaling $4,450,000 for the 2034 Notes.

The 2034 Notes are senior, unsecured obligations of NNN and are subordinated to all secured debt of NNN. NNN may redeem the 2034 Notes, in whole or part, at any time prior to the par call date at the redemption price as set forth in the supplemental indenture dated May 29, 2024 relating to the 2034 Notes; provided, however, that if NNN redeems the notes on or after the par call date, the redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date.

In June 2024, NNN redeemed the $350,000,000 3.900% notes payable that were due in June 2024. The notes were redeemed at a price equal to 100% of the principal amount and accrued and unpaid interest.

As of June 30, 2024, $8,869,000 remained in accumulated other comprehensive income (loss) related to NNN's previously terminated interest rate hedges. During the six months ended June 30, 2024 and 2023, NNN reclassified out of accumulated other comprehensive income (loss) $1,242,000 and $1,223,000, respectively, of which $610,000 and $616,000 was reclassified during the quarters ended June 30, 2024 and 2023, respectively, as an increase in interest expense. Over the next 12 months, NNN estimates that an additional $1,840,000 will be reclassified as an increase in interest expense from these terminated derivatives. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on NNN's long-term debt.

NNN does not use derivatives for trading or speculative purposes. NNN had no derivative financial instruments outstanding at June 30, 2024.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Stockholders' Equity

Note 5 – Stockholders' Equity:

Universal Shelf Registration Statement. In August 2023, NNN filed a shelf registration statement with the Securities and Exchange Commission (the "Commission") which became automatically effective ("Universal Shelf"). The Universal Shelf permits the issuance by NNN of an indeterminate amount of debt and equity securities, including preferred stock, depositary shares, common stock, stock purchase contracts, rights, warrants, and units. NNN may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

At-The-Market Offerings. NNN has established an at-the-market equity program ("ATM") which allows NNN to sell shares of common stock from time to time. The following outlines NNN's ATM:

	2023 ATM	2020 ATM
Shelf registration statement:
Effective date	August 2023	August 2020
Termination date	August 2026	August 2023
Total allowable shares	17,500,000	17,500,000
Total shares issued as of June 30, 2024	803,443	7,722,511

The following table outlines the common stock issuances pursuant to NNN's ATM (dollars in thousands, except per share data):

	Six Months Ended June 30,
	2024		2023
Shares of common stock		803,443		650,135
Average price per share (net)	$	41.69	$	43.98
Net proceeds	$	33,493	$	28,592
Stock issuance costs(1)	$	234	$	558

(1) Stock issuance costs consist primarily of underwriters' and agents' fees and commissions, and legal and accounting fees.

Dividend Reinvestment and Stock Purchase Plan. In February 2024, NNN filed a shelf registration statement for its Dividend Reinvestment and Stock Purchase Plan ("DRIP") with the Commission that was automatically effective, and permits NNN to issue up to 4,000,000 shares of common stock. The following outlines the common stock issuances pursuant to NNN's DRIP (dollars in thousands):

	Six Months Ended June 30,
	2024		2023
Shares of common stock		34,309		35,922
Net proceeds	$	1,313	$	1,615

Dividends. The following table outlines the dividends declared and paid for NNN's common stock (dollars in thousands, except per share data):

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Dividends	$	103,159	$	99,745	$	205,843	$	199,146
Per share		0.5650		0.5500		1.1300		1.1000

In July 2024, NNN declared a dividend of $0.5800 per share, which is payable in August 2024 to its common stockholders of record as of July 31, 2024.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 6 – Fair Value of Financial Instruments:

NNN believes the carrying value of its Credit Facility approximates fair value based upon its nature, terms and variable interest rate. At June 30, 2024 and December 31, 2023, the fair value of NNN's notes payable excluding unamortized discount and debt costs was $3,864,675,000 and $3,801,367,000, respectively, based upon quoted market prices as of the close of the period, which is a Level 1 valuation since NNN's notes payable are publicly traded.

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Organization and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation. NNN's unaudited condensed consolidated financial statements include the accounts of each of the respective majority owned and controlled affiliates, including transactions whereby NNN has been determined to be the primary beneficiary in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") guidance included in Topic 810, Consolidation. All significant intercompany account balances and transactions have been eliminated.

Real Estate Portfolio

Real Estate Portfolio. NNN records the acquisition of real estate at cost, including acquisition and closing costs. The cost of Properties developed or funded by NNN includes direct and indirect costs of construction, property taxes, interest, third-party costs and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. NNN recorded $3,476,000 and $1,126,000 in capitalized interest during the development period for the six months ended June 30, 2024 and 2023, respectively, of which $1,617,000 and $721,000 was recorded during the quarters ended June 30, 2024 and 2023, respectively.

Purchase Accounting for Acquisition of Real Estate. In accordance with the FASB ASC guidance on business combinations, consideration for the real estate acquired is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and, if applicable, to identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of in-place leases, as applicable, based on their respective fair values.

The fair value estimate is sensitive to significant assumptions, such as establishing a range of relevant market assumptions for land, building and rent and where the acquired property falls within that range. These market assumptions for land, building and rent use the most relevant comparable properties for an acquisition. The final value relies upon ranking comparable properties' attributes from most to least similar.

The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then allocated to land, building and tenant improvements based on the determination of their fair values.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management's estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease and the renewal option terms if it is probable that the tenant will exercise options. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant will renew the lease for an option term whereby the Company amortizes the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is valued by comparing the purchase price paid for a property after adjusting for existing in-place leases to the estimated fair value of the property as-if-vacant, determined as set forth above. This intangible asset is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off in that period. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

Lease Accounting

Lease Accounting. NNN records its leases on the Property Portfolio in accordance with FASB ASC Topic 842, Leases ("ASC 842"). In addition, NNN records right-of-use assets and operating lease liabilities as lessee under operating leases in accordance with ASC 842.

NNN's real estate is generally leased to tenants on a net lease basis, whereby the tenant is responsible for all operating expenses relating to the Property, including property taxes, insurance, maintenance, repairs and capital expenditures. The leases on the Property Portfolio are predominantly classified as operating leases and are accounted for as follows:

Operating method – Properties with leases accounted for using the operating method are recorded at the cost of the real estate and depreciated on the straight-line method over their estimated remaining useful lives, which generally range from 20 to 40 years for buildings and improvements and 15 years for land improvements. Leasehold interests are amortized on the straight-line method over the terms of their respective leases. Revenue is recognized as rentals are earned and expenses (including depreciation) are charged to operations as incurred. When scheduled rentals vary during the lease term, income is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis.

Collectability

Collectability. In accordance with ASC 842, NNN reviews the collectability of its rental income on an ongoing basis. NNN considers collectability indicators when analyzing accounts receivable (and accrued rent), historical bad debt levels, tenant credit-worthiness and current economic trends, all of which assists in evaluating the probability of outstanding and future rental income collections and the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected recovery of pre-petition and post-petition bankruptcy claims.

When NNN deems the collection of rental income from a tenant not probable, uncollected previously recognized rental revenue and any related accrued rent are reversed as a reduction to rental income and, subsequently, any rental income is only recognized when cash receipts are received. At this point, a tenant is deemed cash basis for accounting purposes. If NNN subsequently deems the collection of rental income is probable, any related accrued rental income or expense is restored.

As a result of the review of collectability, NNN recorded a write-off of $473,000 and $348,000 of outstanding receivables and related accrued rent for certain tenants reclassified to cash basis for accounting purposes during the six months ended June 30, 2024 and 2023, respectively.

The following table summarizes those tenants classified as cash basis for accounting purposes as of June 30:

	2024				2023
Number of tenants		11				9
Cash basis tenants as a percent of:
Total Properties		3.4	%			5.0	%
Total annual base rent		5.0	%	(1)		7.1	%	(2)
Total gross leasable area		4.8	%			6.8	%

Based on annualized base rent for all leases in place at the end of each respective quarter.
	(1)	$837,568,000 as of June 30, 2024.
	(2)	$794,475,000 as of June 30, 2023.

During the six months ended June 30, 2024 and 2023, NNN recognized $20,883,000 and $30,088,000, respectively, of rental income from certain tenants for periods following their classification to cash basis for accounting purposes, of which $11,108,000 and $14,523,000 was recognized during the quarters ended June 30, 2024 and 2023, respectively.

NNN includes an allowance for doubtful accounts in rental income on the Condensed Consolidated Statements of Income and Comprehensive Income.

Real Estate - Held for Sale

Real Estate – Held for Sale. Real estate held for sale is not depreciated and is recorded at the lower of cost or fair value, less cost to sell. On a quarterly basis, the Company evaluates its Properties for held for sale classification based on specific criteria as outlined in FASB ASC Topic 360, Property, Plant and Equipment, including management's intent to commit to a plan to sell the asset. NNN anticipates the disposition of Properties classified as held for sale to occur within 12 months. At June 30, 2024 and December 31, 2023, NNN had recorded real estate held for sale of $9,442,000 (six properties) and $4,573,000 (one property), respectively, in real estate portfolio on the Condensed Consolidated Balance Sheets. The property classified as held for sale as of December 31, 2023 was sold during the six months ended June 30, 2024.

Real Estate Dispositions

Real Estate Dispositions. When real estate is disposed, the related cost, accumulated depreciation or amortization and any accrued rental income from operating leases and the net investment from direct financing leases are removed from the accounts, and gains and losses from the dispositions are reflected in income. FASB ASC Topic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets ("ASC 610-20"), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. An entity that transfers a nonfinancial asset in the scope of ASC 610-20 follows a two-step derecognition model to determine whether (and when) to derecognize the asset. NNN determined the key transactions impacted by ASC 610-20 are recorded in gain on disposition of real estate reported on the Condensed Consolidated Statements of Income and Comprehensive Income. In accordance with ASC 610-20, NNN evaluates any separate contracts or performance obligations to determine proper timing and/or amount of revenue recognition, as well as, transfer of control and transaction price allocation in determining the amount of gain or loss to record.

Impairment - Real Estate

Impairment – Real Estate. NNN periodically assesses its long-lived real estate assets for possible impairment whenever certain events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. These indicators include, but are not limited to: changes in real estate market conditions, the ability of NNN to re-lease properties that are currently vacant or become vacant, properties reclassified as held for sale, persistent vacancies greater than one year, and properties leased to tenants in bankruptcy. Management evaluates whether an impairment in carrying value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), and the residual value of the real estate, with the carrying value of the individual asset. The future undiscounted cash flows are primarily driven by estimated future market rents. Future cash flow estimates are sensitive to the assumptions made by management regarding future market rents, which are affected by expectations about future market and economic conditions. If an impairment is indicated, a loss will be recorded for the amount by which the carrying value of the asset exceeds its estimated fair value. NNN's Properties are leased primarily to retail tenants under long-term net leases and primarily held for investment. Generally, NNN's Property leases provide for initial terms of 10 to 20 years, with cash flows provided over the entire term.

Credit Losses on Financial Instruments

Credit Losses on Financial Instruments. FASB ASC Topic 326, Financial Instruments – Credit Losses, requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings. The guidance requires a lifetime credit loss expected at inception and requires pooling of assets, which share similar risk characteristics. NNN is required to evaluate current economic conditions, as well as make future expectations of economic conditions. In addition, the measurement of the expected credit loss is over the asset's contractual term.

NNN held mortgages receivable, including accrued interest, of $705,000 and $1,002,000 included in other assets on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively, net of $14,000 and $64,000 allowance for credit loss, respectively. NNN periodically evaluates the allowance for credit loss based on the fair value of the collateral and a 15-year historical collectability trend analysis.

Cash and Cash Equivalents

Cash and Cash Equivalents. NNN considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash and money market accounts. Cash equivalents are stated at cost plus accrued interest, which approximates fair value. Cash accounts maintained on behalf of NNN in demand deposits at commercial banks and money market funds may exceed federally insured levels or may be held in accounts without any federal insurance or any other insurance or guarantee. However, NNN has not experienced any losses in such accounts.

Restricted Cash and Cash Held in Escrow

Restricted Cash and Cash Held in Escrow. Restricted cash and cash held in escrow may include (i) cash proceeds from the sale of assets held by qualified intermediaries in anticipation of the acquisition of replacement properties in tax-free exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) cash that has been placed in escrow for the future funding of construction commitments, or (iii) cash that is not immediately available to NNN. NNN held $14,672,000 and $3,966,000 in restricted cash and cash held in escrow as of June 30, 2024 and December 31, 2023, respectively.

Debt Costs

Debt Costs – Line of Credit Payable. Debt costs incurred in connection with NNN's $1,200,000,000 unsecured revolving line of credit have been deferred and are being amortized to interest expense over the term of the loan commitment using the straight-line method, which approximates the effective interest method. NNN has recorded debt costs associated with the Credit Facility (as defined in "Note 3 – Line of Credit Payable") as an asset, in debt costs on the Condensed Consolidated Balance Sheets.

Debt Costs – Notes Payable. Debt costs incurred in connection with the issuance of NNN's unsecured notes have been deferred and are being amortized to interest expense over the term of the respective debt obligation using the effective interest method. NNN had debt costs of $43,820,000 and $42,595,000, included in notes payable on the Condensed Consolidated Balance Sheets, as of June 30, 2024 and December 31, 2023, respectively, net of accumulated amortization of $12,606,000 and $14,343,000, respectively.

Revenue Recognition

Revenue Recognition. Rental revenues for properties under construction commence upon completion of construction of the leased asset and delivery of the leased asset to the tenant. Rental revenues for non-development real estate assets are recognized when earned in accordance with ASC 842, based on the terms of the lease of the leased asset. Leasehold interests are amortized on the straight-line method over the terms of their respective leases. When scheduled rentals vary during the lease term, income is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Lease termination fees are recognized when collected subsequent to the related lease that is cancelled and NNN no longer has continuing involvement with the former tenant with respect to that property.

Earnings Per Share

Earnings Per Share. Earnings per share have been computed pursuant to the FASB guidance included in FASB ASC Topic 260, Earnings Per Share. The guidance requires classification of the Company's unvested restricted share units, which carry rights to receive nonforfeitable dividends, as participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period.

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per share using the two-class method (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Basic and Diluted Earnings:
Net earnings	$	106,666		$	98,704		$	201,037		$	188,871
Less: Earnings allocated to unvested restricted shares		(189	)		(162	)		(333	)		(295	)
Net earnings used in basic and diluted earnings per share	$	106,477		$	98,542		$	200,704		$	188,576
Basic and Diluted Weighted Average Shares Outstanding:
Weighted average shares outstanding		183,532,421			182,123,555			183,116,552			181,923,011
Less: Unvested restricted shares		(324,620	)		(295,441	)		(294,671	)		(267,861	)
Less: Unvested contingent restricted shares		(769,010	)		(736,083	)		(702,410	)		(685,341	)
Weighted average shares outstanding used in      basic earnings per share		182,438,791			181,092,031			182,119,471			180,969,809
Other dilutive securities		368,583			535,826			408,862			574,466
Weighted average shares outstanding used in      diluted earnings per share		182,807,374			181,627,857			182,528,333			181,544,275

Income Taxes

Income Taxes. NNN has made an election to be taxed as a REIT under Sections 856 through 860 of the Code, and related regulations. NNN generally will not be subject to federal income taxes on taxable income it distributes to stockholders, provided it meets certain other requirements for qualifying as a REIT. As of June 30, 2024, NNN believes it has qualified as a REIT. Notwithstanding NNN's qualification for taxation as a REIT, NNN is subject to certain state and local income, franchise and excise taxes.

Fair Value Measurement

Fair Value Measurement. NNN's estimates of fair value of financial and non-financial assets and liabilities are based on the framework established in FASB ASC Topic 820, Fair Value Measurement. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The guidance describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

•Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.

•Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss). The following table outlines the changes in accumulated other comprehensive income (loss) for the six months ended June 30, 2024 (dollars in thousands):

	Gain (Loss) on Cash Flow Hedges(1)
Beginning balance, December 31, 2023	$	(10,111	)
Reclassifications from accumulated other comprehensive income to net earnings		1,242		(2)
Ending balance, June 30, 2024	$	(8,869	)

(1) Additional disclosure is included in "Note 4 – Notes Payable and Derivatives".

(2) Recorded in interest expense on the Condensed Consolidated Statements of Income and Comprehensive Income. There is no income tax expense (benefit) resulting from this reclassification.

New Accounting Pronouncements

New Accounting Pronouncements. In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), effective for fiscal years, beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments in this update require public entities to provide enhanced disclosures primarily around segment expenses. On an annual and interim basis, entities will disclose significant segment expenses that are regularly provided to the chief operating decision maker and included with each measure of segment profit or loss, an amount for “other segment items” by reportable segment accompanied by a description of its composition, and all annual disclosures about segment profit and loss currently required by Topic 280 to be disclosed in interim periods. While NNN only has one reportable segment, NNN is currently evaluating the potential impact the adoption of ASU 2023-07 will have on its future disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), effective for annual periods beginning after December 15, 2024. The amendments in the update require public business entities on an annual basis to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold of equal to or greater than five percent of the amount computed by multiplying pretax income by the statutory income tax rate. The amendments also require that entities disclose on an annual basis information about the amount of income taxes paid disaggregated by federal, state, and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than five percent of total income taxes paid. The amendments eliminate some of the previous required disclosures for all entities relating to estimates of the change in unrecognized tax benefits reasonably possible within 12 months. NNN is currently evaluating the potential impact the adoption of ASU 2023-09 will have on its future disclosures.

Use of Estimates

Use of Estimates. Additional critical accounting policies of NNN include management's estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities which are required to prepare the unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Significant accounting policies include management's estimates of the purchase accounting for acquisition of real estate, the recoverability of the carrying value of long-lived assets and management's evaluation of the probability of outstanding and future lease payment collections. Estimates are sensitive to evaluations by management about current and future expectations of market and economic conditions. Actual results could differ from those estimates.

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Organization and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of NNN's Investment Portfolio

NNN's assets primarily include real estate assets. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment ("Properties" or "Property Portfolio", or individually a "Property").

	June 30, 2024
Property Portfolio:
Total Properties	3,548
Gross leasable area (square feet)	36,095,000
States	49
Weighted average remaining lease term (years)	10.0

Summary of tenants classified as cash basis

The following table summarizes those tenants classified as cash basis for accounting purposes as of June 30:

	2024				2023
Number of tenants		11				9
Cash basis tenants as a percent of:
Total Properties		3.4	%			5.0	%
Total annual base rent		5.0	%	(1)		7.1	%	(2)
Total gross leasable area		4.8	%			6.8	%

Based on annualized base rent for all leases in place at the end of each respective quarter.
	(1)	$837,568,000 as of June 30, 2024.
	(2)	$794,475,000 as of June 30, 2023.

Computation of Basic and Diluted Earnings Per Share

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per share using the two-class method (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Basic and Diluted Earnings:
Net earnings	$	106,666		$	98,704		$	201,037		$	188,871
Less: Earnings allocated to unvested restricted shares		(189	)		(162	)		(333	)		(295	)
Net earnings used in basic and diluted earnings per share	$	106,477		$	98,542		$	200,704		$	188,576
Basic and Diluted Weighted Average Shares Outstanding:
Weighted average shares outstanding		183,532,421			182,123,555			183,116,552			181,923,011
Less: Unvested restricted shares		(324,620	)		(295,441	)		(294,671	)		(267,861	)
Less: Unvested contingent restricted shares		(769,010	)		(736,083	)		(702,410	)		(685,341	)
Weighted average shares outstanding used in      basic earnings per share		182,438,791			181,092,031			182,119,471			180,969,809
Other dilutive securities		368,583			535,826			408,862			574,466
Weighted average shares outstanding used in      diluted earnings per share		182,807,374			181,627,857			182,528,333			181,544,275

Changes in Accumulated Other Comprehensive Income (Loss)

The following table outlines the changes in accumulated other comprehensive income (loss) for the six months ended June 30, 2024 (dollars in thousands):

	Gain (Loss) on Cash Flow Hedges(1)
Beginning balance, December 31, 2023	$	(10,111	)
Reclassifications from accumulated other comprehensive income to net earnings		1,242		(2)
Ending balance, June 30, 2024	$	(8,869	)

(1) Additional disclosure is included in "Note 4 – Notes Payable and Derivatives".

(2) Recorded in interest expense on the Condensed Consolidated Statements of Income and Comprehensive Income. There is no income tax expense (benefit) resulting from this reclassification.

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Real Estate (Tables)

6 Months Ended

Jun. 30, 2024

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):

	June 30, 2024			December 31, 2023
Land and improvements(1)	$	2,888,355		$	2,878,400
Buildings and improvements		7,526,840			7,368,873
Leasehold interests		355			355
		10,415,550			10,247,628
Less accumulated depreciation and amortization		(1,958,444	)		(1,863,451	)
		8,457,106			8,384,177
Work in progress and improvements		117,754			144,068
Accounted for using the operating method		8,574,860			8,528,245
Accounted for using the direct financing method		2,634			3,033
Classified as held for sale(2)		9,442			4,573
	$	8,586,936		$	8,535,851

(1) Includes $56,895 and $96,464 in land for Properties under construction at June 30, 2024 and December 31, 2023, respectively.

(2) As of June 30, 2024, six Properties were classified as held for sale. The one property classified as held for sale as of December 31, 2023 was sold during the six months ended June 30, 2024.

Rental Income, Operating Leases

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Rental income from operating leases	$	211,557	$	197,629	$	420,641	$	395,812
Earned income from direct financing leases		118		143		237		287
Percentage rent		259		291		1,147		1,054
Rental revenues		211,934		198,063		422,025		397,153
Real estate expense reimbursement from tenants		4,206		4,363		8,940		8,903
	$	216,140	$	202,426	$	430,965	$	406,056

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):

	June 30, 2024			December 31, 2023
Intangible lease assets (included in other assets):
Above-market in-place leases	$	14,875		$	15,297
Less: accumulated amortization		(11,977	)		(12,080	)
Above-market in-place leases, net	$	2,898		$	3,217
In-place leases	$	119,419		$	122,802
Less: accumulated amortization		(85,540	)		(85,332	)
In-place leases, net	$	33,879		$	37,470
Intangible lease liabilities (included in other liabilities):
Below-market in-place leases	$	40,631		$	41,244
Less: accumulated amortization		(29,058	)		(29,117	)
Below-market in-place leases, net	$	11,573		$	12,127

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 June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
	# 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	14	$	17,621	7	$	13,930	20	$	22,442	13	$	20,230

Remaining Funding Commitments

These construction commitments, as of June 30, 2024, are outlined in the table below (dollars in thousands):

Total commitment(1)	$	249,365
Less amount funded		(174,649	)
Remaining commitment	$	74,716

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Total real estate impairments, net of recoveries	$	944	$	34	$	2,148	$	2,674
Number of Properties:
Vacant		2		—		2		3
Occupied		—		—		3		1

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Schedule of ATM Program

The following outlines NNN's ATM:

	2023 ATM	2020 ATM
Shelf registration statement:
Effective date	August 2023	August 2020
Termination date	August 2026	August 2023
Total allowable shares	17,500,000	17,500,000
Total shares issued as of June 30, 2024	803,443	7,722,511

Schedule of Common Stock Issuances Pursuant to NNN's ATM

The following table outlines the common stock issuances pursuant to NNN's ATM (dollars in thousands, except per share data):

	Six Months Ended June 30,
	2024		2023
Shares of common stock		803,443		650,135
Average price per share (net)	$	41.69	$	43.98
Net proceeds	$	33,493	$	28,592
Stock issuance costs(1)	$	234	$	558

(1) Stock issuance costs consist primarily of underwriters' and agents' fees and commissions, and legal and accounting fees.

Schedule of Common Stock Issuances Pursuant to NNN's DRIP

The following outlines the common stock issuances pursuant to NNN's DRIP (dollars in thousands):

	Six Months Ended June 30,
	2024		2023
Shares of common stock		34,309		35,922
Net proceeds	$	1,313	$	1,615

Schedule of Dividends Declared and Paid

The following table outlines the dividends declared and paid for NNN's common stock (dollars in thousands, except per share data):

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Dividends	$	103,159	$	99,745	$	205,843	$	199,146
Per share		0.5650		0.5500		1.1300		1.1000

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Organization and Summary of Significant Accounting Policies (Summary of NNN's Investment Portfolio) (Details)	6 Months Ended
	Jun. 30, 2024 ft² Property State
Property Portfolio:
Total properties | Property	3,548
Gross leasable area (square feet) | ft²	36,095,000
States | State	49
Weighted average remaining lease term (years)	10 years

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Organization and Summary of Significant Accounting Policies - (Summary of tenants classified as cash basis) (Details) - Tenant		Jun. 30, 2024	Jun. 30, 2023
Accounting Policies [Abstract]
Number of tenants		11	9
Cash basis tenants as a percent of:
Total Properties		3.40%	5.00%
Total annual base rent	[1]	5.00%	7.10%
Total gross leasable area		4.80%	6.80%

[1] Based on annualized base rent for all leases in place at the end of each respective quarter.   (1) $837,568,000 as of June 30, 2024.   (2) $794,475,000 as of June 30, 2023.

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Organization and Summary of Significant Accounting Policies - (Summary of tenants classified as cash basis) (Parenthetical) (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023
Accounting Policies [Abstract]
Lease income annualized on base rent	$ 837,568,000	$ 794,475,000

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Organization and Summary of Significant Accounting Policies (Computation of Basic and Diluted Earnings per Share) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Basic and Diluted Earnings:
Net earnings	$ 106,666	$ 98,704	$ 201,037	$ 188,871
Less: Earnings allocated to unvested restricted shares	(189)	(162)	(333)	(295)
Net earnings used in basic and diluted earnings per share	$ 106,477	$ 98,542	$ 200,704	$ 188,576
Basic and Diluted Weighted Average Shares Outstanding:
Weighted average shares outstanding	183,532,421	182,123,555	183,116,552	181,923,011
Less: Unvested restricted shares	(324,620)	(295,441)	(294,671)	(267,861)
Less: Unvested contingent restricted shares	(769,010)	(736,083)	(702,410)	(685,341)
Weighted average shares outstanding used in basic earnings per share	182,438,791	181,092,031	182,119,471	180,969,809
Other dilutive securities	368,583	535,826	408,862	574,466
Weighted average shares outstanding used in diluted earnings per share	182,807,374	181,627,857	182,528,333	181,544,275

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Organization and Summary of Significant Accounting Policies (Changes in AOCI) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balances	$ 4,157,457
Balances	4,194,922
AOCI, cash flow hedges
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balances	(10,111)	[1]
Reclassifications from accumulated other comprehensive income to net earnings	1,242	[1],[2]
Balances	$ (8,869)	[1]

[1] (1) Additional disclosure is included in "Note 4 – Notes Payable and Derivatives".

[2] (2) Recorded in interest expense on the Condensed Consolidated Statements of Income and Comprehensive Income. There is no income tax expense (benefit) resulting from this reclassification.

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Organization and Summary of Significant Accounting Policies (Narrative) (Details)		3 Months Ended		6 Months Ended
		Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) Segment	Jun. 30, 2023 USD ($)	Apr. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Accounting Policies [Line Items]
Interest costs capitalized		$ 1,617,000	$ 721,000	$ 3,476,000	$ 1,126,000
Revenue recognized on cash basis		11,108,000	$ 14,523,000	20,883,000	30,088,000
Revolving credit facility borrowing capacity		1,188,000,000		$ 1,188,000,000
Number of Operating Segments | Segment				1
Classified as held for sale	[1]	9,442,000		$ 9,442,000			$ 4,573,000
Write-off of outstanding receivables and related accrued rent				473,000	$ 348,000
Escrow and other restricted accounts		$ 14,672,000		$ 14,672,000			3,966,000
Land Improvements [Member]
Accounting Policies [Line Items]
Property estimated useful life		15 years		15 years
Mortgage loan
Accounting Policies [Line Items]
Mortgage receivable		$ 705,000		$ 705,000			1,002,000
Allowance for credit loss		$ 14,000		$ 14,000			64,000
Minimum | Building and Building Improvements [Member]
Accounting Policies [Line Items]
Property estimated useful life		20 years		20 years
Maximum | Building and Building Improvements [Member]
Accounting Policies [Line Items]
Property estimated useful life		40 years		40 years
Revolving Credit Facility [Member]
Accounting Policies [Line Items]
Revolving credit facility borrowing capacity		$ 1,200,000,000		$ 1,200,000,000		$ 1,100,000,000
Loans Payable
Accounting Policies [Line Items]
Debt costs		43,820,000		43,820,000			42,595,000
Debt costs accumulated amortization		$ 12,606,000		$ 12,606,000			$ 14,343,000

[1] (2) As of June 30, 2024, six Properties were classified as held for sale. The one property classified as held for sale as of December 31, 2023 was sold during the six months ended June 30, 2024.  

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Real Estate (Key Information for Leases) (Details)	6 Months Ended
	Jun. 30, 2024 Property
Lessor, Lease, Description [Line Items]
Weighted average remaining lease term (years)	10 years
Leases classified as operating leases	3,539
Leases classified as direct financing leases	4
Minimum
Lessor, Lease, Description [Line Items]
Initial lease term	10 years
Maximum
Lessor, Lease, Description [Line Items]
Initial lease term	20 years

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Real Estate (Summary of Real Estate Subject to Operating Leases) (Details) - USD ($)		Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Land and improvements	[1]	$ 2,888,355,000	$ 2,878,400,000
Buildings and improvements		7,526,840,000	7,368,873,000
Leasehold interests		355,000	355,000
Real estate subject to operating leases, gross		10,415,550,000	10,247,628,000
Less accumulated depreciation and amortization		(1,958,444,000)	(1,863,451,000)
Real estate subject to operating leases, net, before work in progress		8,457,106,000	8,384,177,000
Work in progress and improvements		117,754,000	144,068,000
Accounted for using the operating method		8,574,860,000	8,528,245,000
Accounted for using the direct financing method		2,634,000	3,033,000
Classified as held for sale	[2]	9,442,000	4,573,000
Accounted for using the operating method, net of accumulated depreciation and amortization		8,586,936,000	8,535,851,000
Asset under construction
Property, Plant and Equipment [Line Items]
Land and improvements		$ 56,895,000	$ 96,464,000

[1] (1) Includes $56,895 and $96,464 in land for Properties under construction at June 30, 2024 and December 31, 2023, respectively.

[2] (2) As of June 30, 2024, six Properties were classified as held for sale. The one property classified as held for sale as of December 31, 2023 was sold during the six months ended June 30, 2024.  

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Real Estate (Rental Income) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Lease Income [Abstract]
Rental income from operating leases	$ 211,557,000	$ 197,629,000	$ 420,641,000	$ 395,812,000
Earned income from direct financing leases	118,000	143,000	237,000	287,000
Percentage rent	259,000	291,000	1,147,000	1,054,000
Rental revenues	211,934,000	198,063,000	422,025,000	397,153,000
Real estate expense reimbursement from tenants	4,206,000	4,363,000	8,940,000	8,903,000
Rental income	216,140,000	202,426,000	430,965,000	406,056,000
Rental income accrued during period	$ (95,000)	$ 534,000	$ (131,000)	$ 1,003,000

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Real Estate (Intangible Assets and Liabilities) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Intangible lease liabilities (included in other liabilities):
Below-market in-place leases	$ 40,631,000		$ 40,631,000		$ 41,244,000
Less: accumulated amortization	(29,058,000)		(29,058,000)		(29,117,000)
Below-market in-place leases, net	11,573,000		11,573,000		12,127,000
Above-market in-place leases, net
Intangible lease assets (included in other assets):
Leases	14,875,000		14,875,000		15,297,000
Less: accumulated amortization	(11,977,000)		(11,977,000)		(12,080,000)
Leases, net	2,898,000		2,898,000		3,217,000
In-place leases ,net
Intangible lease assets (included in other assets):
Leases	119,419,000		119,419,000		122,802,000
Less: accumulated amortization	(85,540,000)		(85,540,000)		(85,332,000)
Leases, net	33,879,000		33,879,000		$ 37,470,000
Intangible lease liabilities (included in other liabilities):
Amortization expense, in-place leases	1,583,000	$ 1,767,000	3,230,000	$ 3,527,000
Above-market and below-market in-place leases
Intangible lease liabilities (included in other liabilities):
Amortization expense, above- and below-market leases	$ 125,000	$ 122,000	$ 242,000	$ 234,000

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Real Estate (Dispositions) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($) Property	Jun. 30, 2023 USD ($) Property	Jun. 30, 2024 USD ($) Property	Jun. 30, 2023 USD ($) Property
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain | $	$ 17,621	$ 13,930	$ 22,442	$ 20,230
Assets Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of properties sold at a gain | Property	14	7	20	13

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Real Estate (Commitments) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($) Property
Real Estate Properties [Line Items]
Number of properties | Property	27
Total commitment	$ 249,365	[1]
Less amount funded	(174,649)
Real Estate Investment, Funding Commitments, Remaining Commitment, Total	$ 74,716
Minimum [Member]
Real Estate Properties [Line Items]
Period for improvements to construction commitments	12 months
Maximum [Member]
Real Estate Properties [Line Items]
Period for improvements to construction commitments	18 months

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

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Real Estate (Impairments) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($) Property	Jun. 30, 2023 USD ($) Property	Jun. 30, 2024 USD ($) Property	Jun. 30, 2023 USD ($) Property
Real Estate [Abstract]
Real estate impairments, net of recoveries | $	$ 944	$ 34	$ 2,148	$ 2,674
Vacant	2	0	2	3
Occupied	0	0	3	1

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Line of Credit Payable (Details) - USD ($)	6 Months Ended
	Jun. 30, 2024	Apr. 30, 2024
Line of Credit Facility [Line Items]
Revolving credit facility borrowing capacity	$ 1,188,000,000
Revolving credit facility weighted average outstanding balance	$ 111,966,000
Weighted average interest rate	6.26%
Option to increase facility size	$ 2,000,000,000
LIBOR
Line of Credit Facility [Line Items]
Basis spread on variable rate	77.50%
SOFR
Line of Credit Facility [Line Items]
Basis spread on variable rate	10.00%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving credit facility borrowing capacity	$ 1,200,000,000	$ 1,100,000,000
Line of Credit
Line of Credit Facility [Line Items]
Line of credit payable	$ 12,000,000

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Notes Payable and Derivatives (Narrative) (Details) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2024	May 31, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Derivative [Line Items]
Amortization of interest rate hedges			$ (610,000)	$ (616,000)	$ (1,242,000)	$ (1,223,000)
Accrued interest payable	$ 30,931,000		30,931,000		30,931,000		$ 34,374,000
Amortization of debt costs					3,088,000	2,401,000
Interest rate cash flow hedge gain (loss) to be reclassified over next 12 months, net	1,840,000		1,840,000		1,840,000
Notes Payable 2034 Member
Derivative [Line Items]
Aggregate principal amount issued		$ 500,000,000
Debt interest rate percantage		5.50%
Accrued interest payable	493,840,000		493,840,000		493,840,000
Debt amortized interest expense					6,160,000
Debt issuance costs	$ 4,450,000		$ 4,450,000		$ 4,450,000
Debt note discount percentage					5.662%
Net proceeds from debt issuance cost					$ 489,390,000
Loans Payable
Derivative [Line Items]
Debt interest rate percantage	3.90%		3.90%		3.90%
Notes payable redeemed	$ 350,000,000
Debt issuance costs	$ 43,820,000		$ 43,820,000		$ 43,820,000		$ 42,595,000
Redemption price percentage	100.00%
Loans Payable | Notes Payable 2034 Member
Derivative [Line Items]
Redemption price percentage		100.00%
AOCI, cash flow hedges
Derivative [Line Items]
Amortization of interest rate hedges					8,869,000
Accumulated Other Comprehensive Income (Loss)
Derivative [Line Items]
Amortization of interest rate hedges			$ (610,000)	$ (616,000)	$ (1,242,000)	$ (1,223,000)

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Stockholders' Equity (Additional Information) (Details) - $ / shares		3 Months Ended		6 Months Ended
	Jul. 31, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Feb. 29, 2024	Dec. 31, 2023
Class of Stock [Line Items]
Common stock, shares authorized (in shares)		375,000,000		375,000,000			375,000,000
Common stock dividends declared and paid (in dollars per share)		$ 0.565	$ 0.55	$ 1.13	$ 1.1
Subsequent Event
Class of Stock [Line Items]
Common stock dividends declared and paid (in dollars per share)	$ 0.58
DRIP
Class of Stock [Line Items]
Common stock, shares authorized (in shares)						4,000,000

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Stockholders' Equity (ATM Program) (Details) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
		Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Class of Stock [Line Items]
Total allowable shares (in shares)		375,000,000		375,000,000
Total shares issued (in shares)		183,666,067		182,474,770
Net proceeds		$ 35,116	$ 30,765
Stock issuance costs		$ 13,014	$ 125
ATM equity programs
Class of Stock [Line Items]
Shares of common stock (in shares)		803,443	650,135
Average price per share (net) (in dollars per share)		$ 41.69	$ 43.98
Net proceeds		$ 33,493	$ 28,592
Stock issuance costs	[1]	$ 234	$ 558
2020 ATM
Class of Stock [Line Items]
Total allowable shares (in shares)		17,500,000
Total shares issued (in shares)		7,722,511
2023 ATM
Class of Stock [Line Items]
Total allowable shares (in shares)		17,500,000
Total shares issued (in shares)		803,443

[1] Stock issuance costs consist primarily of underwriters' and agents' fees and commissions, and legal and accounting fees.

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Stockholders' Equity (DRIP) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Class of Stock [Line Items]
Net proceeds	$ 35,116	$ 30,765
DRIP
Class of Stock [Line Items]
Shares of common stock (in shares)	34,309	35,922
Net proceeds	$ 1,313	$ 1,615

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Stockholders' Equity (Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
	Jul. 31, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Class of Stock [Line Items]
Common stock dividends				$ 205,843	$ 199,146
Common stock dividends declared (in dollars per share)		$ 0.565	$ 0.55	$ 1.13	$ 1.1
DRIP [Member]
Class of Stock [Line Items]
Common stock dividends		$ 103,159	$ 99,745	$ 205,843	$ 199,146
Common stock dividends per share (in dollars per share)		$ 0.565	$ 0.55	$ 1.13	$ 1.1
Subsequent Event
Class of Stock [Line Items]
Common stock dividends declared (in dollars per share)	$ 0.58

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Fair Value of Financial Instruments (Details) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Fair Value Disclosures [Abstract]
Fair value of notes payable	$ 3,864,675,000	$ 3,801,367,000