Real Estate - Investment Portfolio

6 Months Ended

Jun. 30, 2011

Real Estate - Investment Portfolio

Real Estate - Investment Portfolio

Note 2 – Real Estate - Investment Portfolio:

Leases – The following outlines key information for NNN's Investment Property leases:

	June 30, 2011
Lease classification:
Operating		1,213
Direct financing		16
Building portion – direct financing / land portion – operating		6
Weighted average remaining lease term		12 Years

The leases generally provide for limited increases in rent as a result of fixed increases, increases in the consumer price index, and/or increases in the tenant's sales volume. Generally, the tenant is also required to pay all property taxes and assessments, substantially maintain the interior and exterior of the building and carry property and liability insurance coverage. Certain of NNN's Investment Properties are subject to leases under which NNN retains responsibility for certain costs and expenses of the property. Generally, the leases of the Investment Properties provide the tenants with one or more multi-year renewal options subject to generally the same terms and conditions, including rent increases, consistent with the initial lease term.

Investment Portfolio – Accounted for Using the Operating Method – Real estate subject to operating leases consisted of the following (dollars in thousands):

	June 30, 2011			December 31, 2010
Land and improvements	$	1,159,787		$	1,122,243
Buildings and improvements		1,663,800			1,592,752
Leasehold interests		1,290			1,290
		2,824,877			2,716,285
Less accumulated depreciation and amortization		(246,348	)		(222,921	)
		2,578,529			2,493,364
Work in process		25,298			26,586
	$	2,603,827		$	2,519,950

NNN has remaining funding commitments as follows (dollars in thousands):

	June 30, 2011
	Total Commitment(1)		Amount Funded		Remaining Commitment
Investment Portfolio	$	92,534	$	55,579	$	36,955

⁽¹⁾ Includes land and construction costs.