Group 1 - The article discusses the trend of retail investors withdrawing from stocks during a market selloff, indicating a cautious approach to investing in the short term [2] - It highlights the importance of staying invested in defensive stocks with a medium- to long-term horizon as a strategy for sustainable portfolio income [2] Group 2 - iREIT+HOYA Capital is presented as a premier income-focused investing service, emphasizing income-producing asset classes for diversification and inflation hedging [1]

Core Viewpoint - The article reiterates a hold recommendation for NNN REIT, Inc. (NYSE: NNN) and emphasizes three key aspects of the company [1]. Group 1: Company Overview - NNN REIT, Inc. was last covered in October, where a hold recommendation was issued [1]. - The analysis is based on a fundamental, bottom-up approach, focusing on true economic earnings rather than complex models [1]. Group 2: Analyst Background - The analyst is a CFA charterholder and CIPM certificant, with experience in investment performance standards and small business operations [1]. - The analyst has a conservative, long-term investment strategy, favoring companies with sustainable profitability [1].

Company Overview - NNN REIT (NYSE: NNN) is a prominent player in the retail/service-oriented real estate property sector with approximately $10.8 billion in assets based on book gross value [1] - The company manages 3,568 properties across 49 states and has over 385 tenants, showcasing a well-diversified tenant structure [1] Investment Philosophy - The article emphasizes the importance of dividend investing as a pathway to financial freedom, highlighting its accessibility for investors [1] - The author shares insights from a professional background in M&A and business valuation, indicating a strong foundation in financial analysis and investment strategies [1] Sector Focus - The company’s focus spans various sectors including technology, real estate, software, finance, and consumer staples, which are also reflected in the author's personal investment portfolio [1]

NNN REIT (NNN 5.73%) has been a wealth-building machine over the years. The real estate investment trust (REIT) has increased its high-yielding dividend (currently 5.8%) for 35 straight years. That steadily rising income stream has enabled the REIT to deliver strong total returns over the past few decades. Its total shareholder return has averaged 11.1% annually during the last 30 years, exceeding the S&P 500's (^GSPC 0.03%) 10.5% return. That has enabled the REIT to grow a $1,000 investment made three deca ...

Financial Data and Key Metrics Changes - NNN REIT reported a 1.8% growth in core FFO for 2024, with core FFO per share at $3.32 and AFFO per share at $3.35, reflecting a 2.8% increase year-over-year [4][20] - The occupancy rate at the end of the fourth quarter was 98.5%, a decrease of 80 basis points due to challenges with two specific tenants [11][22] - The company ended the year with $860.6 million in annual base rent, accounting for all acquisitions and dispositions completed through year-end [22][33] Business Line Data and Key Metrics Changes - During the fourth quarter, NNN invested $217 million in 31 new properties, achieving an initial cap rate of 7.6% and an average lease duration of approximately 20 years [12][14] - Disposition activity was elevated, with nearly $150 million sold at a 7.3% cap rate, reflecting strategic and defensive asset sales [14][22] Market Data and Key Metrics Changes - The company anticipates a strong quarter of acquisitions in the first quarter of 2025, with a focus on assets related to Frisch's and Badcock Home Furnitures [10][11] - The competitive landscape is expected to tighten, with pricing for incoming deals projected to compress slightly compared to the fourth quarter [15][78] Company Strategy and Development Direction - NNN's strategy focuses on a bottom-up investment approach, aiming to deliver long-term value with below-average risk while maintaining a sector-leading average debt maturity of 12.1 years [5][33] - The company is committed to maintaining a light capital markets footprint while continuing to increase annual dividends and achieving mid-single-digit FFO growth per share over multiple years [5][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the leasing and recovery of properties previously leased to troubled tenants, with expectations of achieving better than historical recovery rates [30][31] - The company initiated 2025 core FFO guidance at a range of $3.33 to $3.38 per share, with expectations for acquisitions between $500 million to $600 million [31][32] Other Important Information - The company ended the year with no amounts outstanding on its $1.2 billion bank line, indicating a strong leverage and liquidity position [33] - Management highlighted the importance of maintaining a sound balance sheet and appropriate capital allocation to ensure sufficient returns on equity [35] Q&A Session Summary Question: Inquiry about AFFO guidance and lease termination impacts - Management noted that better-than-expected releasing outcomes for Frisch's and Badcock contributed to the AFFO guidance, with no major offsetting items impacting the growth number [41][44] Question: Details on transaction activity and tenant credit losses - Management indicated that 80% of deal flow in the fourth quarter came from relationships, with no significant changes in credit loss assumptions for 2025 [52][56] Question: Clarification on leasing and recovery rates for Frisch's and Badcock - Management confirmed that the leasing process is progressing faster than historical norms, with expectations of achieving better than the typical 70% recovery rate [62][68] Question: Discussion on the transaction market and competition - Management acknowledged elevated deal flow compared to last year, with increased competition primarily from private money seeking larger deals [74][78] Question: Concerns regarding specific tenants and credit watch lists - Management stated that while they maintain a credit watch list, there are currently no immediate concerns regarding tenant credit, and the 60 basis points of credit loss should adequately cover any exposure [90][92]

Core Insights - NNN REIT, Inc. reported a 1.8% growth in core FFO for 2024, with over $550 million in acquisition volume [4] - The company achieved a strong occupancy rate of 98.5% by the end of the year [4] - Dispositions of income-producing assets were executed at a cap rate 40 basis points lower than the acquisition yield, indicating strategic asset management [4] Financial Performance - The company has maintained a record of 35 consecutive years of annual dividend increases [4] - NNN REIT has a sector-leading weighted average debt maturity of 12.1 years, reflecting strong financial management [4] Strategic Positioning - The executive team has been strategically positioned for future growth, with an emphasis on maintaining a light capital structure [4]

For the quarter ended December 2024, NNN REIT (NNN) reported revenue of $218.35 million, up 1.5% over the same period last year. EPS came in at $0.82, compared to $0.53 in the year-ago quarter.The reported revenue represents a surprise of +0.34% over the Zacks Consensus Estimate of $217.6 million. With the consensus EPS estimate being $0.82, the company has not delivered EPS surprise.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to W ...

NNN REIT (NNN) came out with quarterly funds from operations (FFO) of $0.82 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.82 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this retail real estate investment trust would post FFO of $0.84 per share when it actually produced FFO of $0.84, delivering no surprise.Over the last four quarters, the company has surpassed consensus FFO estimates two times.NNN REIT, which ...

Property Portfolio - NNN owned 3,568 properties with a total gross leasable area of approximately 36,557,000 square feet, achieving a 98% occupancy rate as of December 31, 2024[14]. - As of December 31, 2024, NNN owned 3,568 properties with a total gross leasable area of approximately 36,557,000 square feet and a weighted average remaining lease term of 10 years, with 98% of properties leased[43]. - NNN's properties are generally leased under long-term triple-net leases, allowing tenants to manage energy conservation and environmental programs[40]. - The average annual base rental payment for NNN's leases is $245,000, with payments ranging from $7,000 to $4,085,000[45]. - Approximately 57.3% of the annual base rent is generated from five retail lines of trade, including convenience stores (17.0%) and automotive service (16.9%)[64]. - 41.3% of the annual base rent is derived from properties located in five states: Texas (18.8%), Florida (8.7%), Illinois (5.1%), Georgia (4.5%), and Ohio (4.2%)[64]. - NNN's largest tenant sectors include convenience stores (17.0%), automotive service (16.9%), restaurants (16.2%), and family entertainment centers (7.2%), indicating a diversified property portfolio[153]. Financial Performance - Total revenues for 2024 were $869,266,000, a 5.0% increase from $828,111,000 in 2023[180]. - Rental revenues for 2024 were $848,657,000, up 5.1% from $807,327,000 in 2023, driven by recent property acquisitions[180]. - Total annualized base rent increased to $860,562,000 in 2024 from $818,749,000 in 2023, reflecting a growth of 5.1%[175]. - NNN declared dividends of $420,239,000 for 2024, an increase from $404,458,000 in 2023, with a per share dividend of $2.290 compared to $2.230 in the previous year[203]. - Cash provided by operating activities was $635,504,000, up from $612,410,000 in 2023[5]. - NNN had $9,062,000 in cash, cash equivalents, and restricted cash as of December 31, 2024, compared to $5,155,000 at the end of 2023[6]. Debt and Financing - As of December 31, 2024, NNN's total debt to total gross assets ratio was approximately 40%, and total debt to total market capitalization was about 37%[29]. - NNN's outstanding debt as of December 31, 2024, was $4,373,803,000, with no secured debt[87]. - NNN's credit facility had no outstanding balance as of December 31, 2024, with $1,200,000,000 available for future borrowings[205]. - The weighted average interest rate on NNN's credit facility was 6.25% for the year ended December 31, 2024, with a total borrowing capacity increased to $1,200,000,000[205]. - NNN's debt instruments contain various restrictive covenants that could limit operational activities and may result in defaults if not complied with[90]. - NNN was in compliance with all restrictive financial covenants as of December 31, 2024, which include leverage ratios and interest coverage[206]. Environmental and Sustainability Practices - The Corporate Sustainability Team was established in 2022 to enhance environmental stewardship and corporate governance practices[33]. - NNN actively monitors environmental conditions and requires tenants to comply with environmental laws, including remediation obligations[40]. - NNN maintains an environmental insurance policy covering substantially all properties to mitigate exposure to environmental liability[47]. - As of January 31, 2025, NNN had 66 properties under some level of environmental remediation and/or monitoring[48]. - NNN's properties are primarily located in Texas (18.8% of annual base rent), Florida (8.7%), and Illinois (5.1%) as of December 31, 2024[177]. Risks and Challenges - NNN may face challenges in executing its acquisition or development strategies due to competition and market conditions[63]. - NNN's financial condition may be adversely affected by changes in economic conditions, including inflation and tenant defaults[58]. - Cybersecurity risks could adversely affect NNN's business and expose it to liabilities[75]. - The presence of hazardous materials on properties could significantly impact NNN's results of operations and ability to distribute to stockholders[102]. - An epidemic or pandemic could disrupt NNN's tenants' ability to operate and pay rent, adversely affecting NNN's financial condition[115]. - Changes in governmental laws and regulations could impose significant costs on NNN and adversely affect its operations[110]. Management and Governance - NNN's management evaluates tenant creditworthiness through financial statements and performance metrics, ensuring a robust tenant selection process[152]. - The loss of key management personnel could negatively impact NNN's performance and the value of its securities[113]. - Compliance with REIT requirements may limit NNN's operational flexibility and affect its decision-making[107]. - If NNN fails to qualify as a REIT, it could face significant tax liabilities and penalties[105].

[Financial Summary](index=4&type=section&id=Financial%20Summary) This section summarizes the company's financial performance, covering income statement, FFO, balance sheet, and debt metrics [Income Statement Summary](index=4&type=section&id=Income%20Statement%20Summary) The company reported an increase in rental income and net earnings for both the quarter and year ended December 31, 2024, compared to the prior year. Operating expenses also saw an increase, primarily in real estate and depreciation/amortization Income Statement Summary (dollars in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :----------------------------------- | :------ | :------ | :------ | :------ | | Rental income | $218,348 | $215,178 | $867,468 | $826,090 | | Total Revenues | $218,482 | $216,231 | $869,266 | $828,111 | | Total Operating Expenses | $86,831 | $83,806 | $333,684 | $320,492 | | Net earnings | $97,894 | $96,682 | $396,835 | $392,340 | | Basic Net earnings per share | $0.52 | $0.53 | $2.16 | $2.16 | | Diluted Net earnings per share | $0.52 | $0.53 | $2.15 | $2.16 | - Rental income increased by **1.47% QoQ** and **5.01% YoY**[7](index=7&type=chunk) - Net earnings increased by **1.25% QoQ** and **1.15% YoY**[7](index=7&type=chunk) [Funds From Operations (FFO)](index=5&type=section&id=Funds%20From%20Operations%20(FFO)) Funds From Operations (FFO) showed a slight increase for both the quarter and year ended December 31, 2024, reflecting adjustments from net earnings for non-cash items like depreciation and gains on property dispositions Funds From Operations (FFO) (dollars in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :-------------------- | :------ | :------ | :------ | :------ | | Net earnings | $97,894 | $96,682 | $396,835 | $392,340 | | Total FFO adjustments | $54,795 | $55,030 | $213,666 | $196,734 | | FFO | $152,689 | $151,712 | $610,501 | $589,074 | | Basic FFO per share | $0.82 | $0.84 | $3.32 | $3.25 | | Diluted FFO per share | $0.82 | $0.83 | $3.32 | $3.24 | - FFO increased by **0.64% QoQ** and **3.64% YoY**[8](index=8&type=chunk) - Diluted FFO per share decreased by **$0.01 QoQ** but increased by **$0.08 YoY**[8](index=8&type=chunk) [Core Funds From Operations (Core FFO)](index=6&type=section&id=Core%20Funds%20From%20Operations%20(Core%20FFO)) Core Funds From Operations (Core FFO) for the year ended December 31, 2024, increased compared to the prior year, primarily due to adjustments for executive retirement costs, providing a clearer view of ongoing operational performance Core Funds From Operations (Core FFO) (dollars in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :-------------------------- | :------ | :------ | :------ | :------ | | FFO | $152,689 | $151,712 | $610,501 | $589,074 | | Executive retirement costs | $42 | $2,569 | $668 | $3,454 | | Core FFO | $152,731 | $154,281 | $611,169 | $592,528 | | Basic Core FFO per share | $0.82 | $0.85 | $3.33 | $3.27 | | Diluted Core FFO per share | $0.82 | $0.85 | $3.32 | $3.26 | - Core FFO decreased by **1.00% QoQ** but increased by **3.15% YoY**[9](index=9&type=chunk) - Diluted Core FFO per share decreased by **$0.03 QoQ** but increased by **$0.06 YoY**[9](index=9&type=chunk) [Adjusted Funds From Operations (AFFO)](index=7&type=section&id=Adjusted%20Funds%20From%20Operations%20(AFFO)) Adjusted Funds From Operations (AFFO) increased significantly for both the quarter and year ended December 31, 2024, driven by various adjustments including straight-line accrued rent and stock-based compensation, indicating improved cash flow available for distribution Adjusted Funds From Operations (AFFO) (dollars in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :-------------------------- | :------ | :------ | :------ | :------ | | Core FFO | $152,731 | $154,281 | $611,169 | $592,528 | | Straight-line accrued rent, net of reserves | $(302) | $(5,957) | $(294) | $(7,453) | | Stock based compensation expense | $2,775 | $2,592 | $11,816 | $10,846 | | Total AFFO adjustments | $1,326 | $(5,284) | $5,444 | $(1,005) | | AFFO | $154,057 | $148,997 | $616,613 | $591,523 | | Basic AFFO per share | $0.83 | $0.82 | $3.36 | $3.26 | | Diluted AFFO per share | $0.82 | $0.82 | $3.35 | $3.26 | - AFFO increased by **3.40% QoQ** and **4.24% YoY**[11](index=11&type=chunk) - Diluted AFFO per share remained stable QoQ and increased by **$0.09 YoY**[11](index=11&type=chunk) [Other Financial Information](index=8&type=section&id=Other%20Information) The company's other financial information highlights the composition of rental income, with operating leases being the primary source, and details on real estate expenses, net of tenant reimbursements, which increased significantly year-over-year Other Financial Information (dollars in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Rental income from operating leases | $212,565 | $209,037 | $846,653 | $805,136 | | Real estate expenses, net of tenant reimbursements | $(5,663) | $(2,470) | $(13,506) | $(9,615) | | Amortization of debt costs | $1,455 | $1,295 | $5,993 | $4,943 | | Scheduled debt principal amortization (excluding maturities) | $— | $— | $— | $173 | - Real estate expenses, net of tenant reimbursements, increased by **129.2% QoQ** and **40.5% YoY**[12](index=12&type=chunk) - NNN repaid the remaining mortgages payable principal balance of **$9,774 thousand** in April 2023[12](index=12&type=chunk) [EBITDA](index=8&type=section&id=EBITDA) EBITDA for the year ended December 31, 2024, increased by 5.51% compared to the prior year, reflecting improved earnings before interest, taxes, depreciation, and amortization EBITDA (dollars in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Net earnings | $97,894 | $96,682 | $396,835 | $392,340 | | Interest expense | $46,880 | $43,389 | $184,017 | $163,898 | | Depreciation and amortization | $63,194 | $60,079 | $249,681 | $238,625 | | Gain on disposition of real estate | $(12,083) | $(7,263) | $(42,290) | $(47,485) | | Impairment losses – real estate, net of recoveries | $3,724 | $2,315 | $6,632 | $5,990 | | EBITDA | $199,609 | $195,202 | $794,875 | $753,368 | - EBITDA increased by **2.26% QoQ** and **5.51% YoY**[13](index=13&type=chunk) [Balance Sheet Summary](index=9&type=section&id=Balance%20Sheet%20Summary) As of December 31, 2024, the company's total assets and total equity increased, while the line of credit payable was fully repaid. The real estate portfolio, net of accumulated depreciation, remains the largest asset Balance Sheet Summary (dollars in thousands) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :-------------------------------------------------- | :----------- | :----------- | | Real estate portfolio, net | $8,746,168 | $8,535,851 | | Cash and cash equivalents | $8,731 | $1,189 | | Total assets | $8,872,728 | $8,661,968 | | Line of credit payable | $— | $132,000 | | Notes payable, net | $4,373,803 | $4,228,544 | | Total liabilities | $4,510,453 | $4,504,511 | | Total equity | $4,362,275 | $4,157,457 | | Common shares outstanding | 187,540,929 | 182,474,770 | | Gross leasable area, Property Portfolio (square feet) | 36,557,000 | 35,966,000 | - Total assets increased by **2.43% YoY**[14](index=14&type=chunk) - Line of credit payable was reduced from **$132,000 thousand** to **$0 YoY**[14](index=14&type=chunk) [Debt Summary](index=10&type=section&id=Debt%20Summary) As of December 31, 2024, the company's debt portfolio consists entirely of unsecured notes with a weighted average interest rate of 4.1% and a weighted average maturity of 12.1 years, demonstrating a well-structured long-term debt profile Unsecured Notes Payable (dollars in thousands) as of December 31, 2024 | Maturity Date | Principal | Stated Rate | | :------------ | :-------- | :---------- | | November 2025 | $400,000 | 4.000% | | December 2026 | $350,000 | 3.600% | | October 2027 | $400,000 | 3.500% | | October 2028 | $400,000 | 4.300% | | April 2030 | $400,000 | 2.500% | | October 2033 | $500,000 | 5.600% | | June 2034 | $500,000 | 5.500% | | October 2048 | $300,000 | 4.800% | | April 2050 | $300,000 | 3.100% | | April 2051 | $450,000 | 3.500% | | April 2052 | $450,000 | 3.000% | | **Total** | **$4,450,000** | | - Unsecured debt has a weighted average interest rate of **4.1%** and a weighted average maturity of **12.1 years**[15](index=15&type=chunk) [Credit Metrics and Covenants](index=11&type=section&id=Credit%20Metrics%20and%20Covenants) The company maintains strong credit ratings (Moody's Baa1; S&P BBB+) and demonstrates compliance with all key financial covenants for its unsecured credit facility and notes as of December 31, 2024, indicating a healthy financial position and prudent debt management [Credit Metrics](index=11&type=section&id=Credit%20Metrics) - Credit Ratings: **Moody's Baa1**; **S&P BBB+**[17](index=17&type=chunk) Credit Metrics | Metric | 2020 | 2021 | 2022 | 2023 | 2024 | | :---------------------------------- | :----- | :----- | :----- | :----- | :----- | | Debt / Total assets (gross book) | 34.4% | 39.9% | 40.4% | 42.0% | 40.5% | | Debt / EBITDA (last quarter annualized) | 5.0 | 5.2 | 5.4 | 5.5 | 5.5 | | EBITDA / Interest expense (cash) | 4.6 | 4.7 | 4.7 | 4.5 | 4.2 | - Debt / Total assets decreased from **42.0% in 2023** to **40.5% in 2024**[17](index=17&type=chunk) - EBITDA / Interest expense (cash) decreased from **4.5 in 2023** to **4.2 in 2024**[17](index=17&type=chunk) [Credit Facility and Note Covenants](index=11&type=section&id=Credit%20Facility%20and%20Note%20Covenants) Key Covenants as of December 31, 2024 | Covenant | Required | December 31, 2024 | | :-------------------------------- | :------- | :---------------- | | **Unsecured Bank Credit Facility:** | | | | Maximum leverage ratio | < 0.60 | 0.37 | | Minimum fixed charge coverage ratio | > 1.50 | 4.28 | | Unencumbered asset value ratio | > 1.67 | 2.70 | | **Unsecured Notes:** | | | | Limitation on incurrence of total debt | ≤ 60% | 40.0% | | Debt service coverage ratio | ≥ 1.50 | 4.2 | | Maintenance of total unencumbered assets | ≥ 150% | 250% | - The company believes it is in compliance with all covenants as of December 31, 2024[18](index=18&type=chunk) [Long-Term Dividend History](index=12&type=section&id=Long-Term%20Dividend%20History) This section is a placeholder for the company's long-term dividend history, but no specific data or details were provided in the report content [Transaction Summary](index=13&type=section&id=Transaction%20Summary) This section details the company's property acquisition and disposition activities, highlighting investment volumes, property counts, and cap rates for the reported periods [Property Acquisitions](index=13&type=section&id=Property%20Acquisitions) Property acquisitions in 2024 saw a decrease in total dollars invested and number of properties compared to 2023, but an increase in gross leasable area and cap rate, indicating larger, potentially higher-yielding individual acquisitions Property Acquisitions (dollars in thousands) | Metric | FY 2024 | FY 2023 | | :-------------------------- | :------ | :------ | | Total dollars invested | $565,416 | $819,710 | | Number of Properties | 75 | 165 | | Gross leasable area (square feet) | 1,486,000 | 1,281,000 | | Cap rate | 7.7% | 7.3% | | Weighted average lease term | 18.5 | 18.8 | - Total dollars invested in acquisitions decreased by **31.0% YoY**[22](index=22&type=chunk) - Gross leasable area acquired increased by **16.0% YoY**, despite fewer properties[22](index=22&type=chunk) - The weighted average cap rate for acquisitions increased from **7.3% in 2023** to **7.7% in 2024**[22](index=22&type=chunk) [Property Dispositions](index=13&type=section&id=Property%20Dispositions) Property dispositions in 2024 resulted in higher net sale proceeds and a significantly higher cap rate compared to 2023, indicating more favorable sales terms for divested properties Property Dispositions (dollars in thousands) | Metric | FY 2024 | FY 2023 | | :-------------------------- | :------ | :------ | | Number of properties | 41 | 45 | | Gross leasable area (square feet) | 849,000 | 293,000 | | Acquisition costs | $147,832 | $94,826 | | Net sale proceeds | $148,658 | $115,716 | | Cap rate | 7.3% | 5.9% | - Net sale proceeds from dispositions increased by **28.5% YoY**[23](index=23&type=chunk) - The cap rate for dispositions increased from **5.9% in 2023** to **7.3% in 2024**[23](index=23&type=chunk) [Property Portfolio Overview](index=14&type=section&id=Property%20Portfolio) This section provides a detailed overview of the company's property portfolio, including lease expirations, diversification by trade and geography, tenant profiles, and leasing data [Lease Expirations](index=14&type=section&id=Lease%20Expirations) The company's lease expiration schedule shows a diversified maturity profile, with a weighted average remaining lease term of 9.9 years, and less than 8% of annual base rent expiring in any single year through 2030 Lease Expirations as of December 31, 2024 | Year | % of Total Annual Base Rent | of Properties | Gross Leasable Area (sq ft) | | :--- | :-------------------------- | :-------------- | :-------------------------- | | 2025 | 3.2% | 132 | 874,000 | | 2026 | 4.2% | 204 | 1,981,000 | | 2027 | 7.6% | 231 | 3,401,000 | | 2028 | 5.8% | 255 | 2,306,000 | | 2029 | 4.6% | 143 | 2,083,000 | | 2030 | 4.4% | 154 | 2,086,000 | | Thereafter | 47.7% | 1,711 | 14,840,000 | - The weighted average remaining lease term is **9.9 years** as of December 31, 2024[24](index=24&type=chunk) [Portfolio Diversification by Trade and Geography](index=15&type=section&id=Portfolio%20Diversification%20by%20Trade%20and%20Geography) The portfolio demonstrates strong diversification across various lines of trade, with convenience stores and automotive services as the largest segments, and a broad geographic spread across the US, with Texas being the largest state concentration [Top 20 Lines of Trade](index=15&type=section&id=Top%2020%20Lines%20of%20Trade) Top 20 Lines of Trade (% of Total Annual Base Rent) | Rank | Lines of Trade | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--------------------------------------- | :----------- | :----------- | | 1. | Convenience stores | 17.0% | 16.4% | | 2. | Automotive service | 16.9% | 15.6% | | 3. | Restaurants – limited service | 8.4% | 8.5% | | 4. | Restaurants – full service | 7.8% | 8.7% | | 5. | Family entertainment centers | 7.2% | 6.4% | - Convenience stores and Automotive service collectively represent **33.9%** of the annual base rent as of December 31, 2024[26](index=26&type=chunk) [Top 10 States](index=15&type=section&id=Top%2010%20States) Top 10 States (% of Total Annual Base Rent) | Rank | State | % of Total | | :--- | :------------ | :--------- | | 1. | Texas | 18.8% | | 2. | Florida | 8.7% | | 3. | Illinois | 5.1% | | 4. | Georgia | 4.5% | | 5. | Ohio | 4.2% | | 6. | Tennessee | 3.8% | | 7. | North Carolina | 3.7% | | 8. | Indiana | 3.6% | | 9. | Arizona | 3.2% | | 10. | Virginia | 3.2% | [Portfolio By Region](index=16&type=section&id=Portfolio%20By%20Region) - Portfolio distribution by region is based on the annual base rent of **$860,562 thousand** as of December 31, 2024[28](index=28&type=chunk) [Top Tenants and Credit Profile](index=17&type=section&id=Top%20Tenants%20and%20Credit%20Profile) The company's tenant base is diversified, with the top 20 tenants accounting for 48.0% of annual base rent. A significant portion of the annual base rent (14.4%) comes from investment-grade rated tenants, and 72.2% from publicly traded and/or rated tenants, indicating a strong credit profile Top 20 Tenants (% of Annual Base Rent) | Rank | Tenant | of Properties | % of Total | | :--- | :-------------------------------- | :-------------- | :--------- | | 1. | 7-Eleven | 146 | 4.5% | | 2. | Mister Car Wash | 121 | 4.1% | | 3. | Dave & Buster's | 34 | 3.8% | | 4. | Camping World | 48 | 3.8% | | 5. | GPM Investments (convenience stores) | 148 | 2.8% | - **14.4%** of annual base rent is from tenants with investment grade rated debt[31](index=31&type=chunk) - **72.2%** of annual base rent is from tenants that are publicly traded and/or have rated debt[31](index=31&type=chunk) - The top 20 tenants account for **48.0%** of annual base rent and operate an average of **1,533 stores** each[31](index=31&type=chunk) [Same Store Rental Income](index=18&type=section&id=Same%20Store%20Rental%20Income) Same store rental income on a cash basis experienced a slight decrease of 0.1% for the year ended December 31, 2024, primarily impacted by tenant bankruptcies Same Store Rental Income (Cash Basis) (dollars in thousands) | Metric | FY 2024 | FY 2023 | | :-------------------------- | :------ | :------ | | Number of properties | 3,327 | 3,327 | | Rental income | $758,489 | $759,119 | | Change (in dollars) | $(630) | | | Change (percent) | (0.1)% | | - Excluding the impact of Frisch's Restaurants and Badcock Furniture bankruptcy, the change in same store rental income would have been **0.8%**[32](index=32&type=chunk) [Leasing Data](index=18&type=section&id=Leasing%20Data) Leasing activity for 2024 shows a combined recovery rate of 89.0% for renewals and re-leases, with a strong long-term renewal rate of 83.2% from 2010 through 2024 Leasing Data for Year Ended December 31, 2024 (dollars in thousands) | Metric | Renewals With Same Tenant | Vacancy Re-Lease To New Tenant | Releasing Totals | | :------------------ | :------------------------ | :----------------------------- | :--------------- | | Number of leases | 94 | 57 | 151 | | New cash rents | $25,400 | $8,216 | $33,616 | | Prior cash rents | $25,924 | $11,868 | $37,792 | | Recovery rate | 98.0% | 69.2% | 89.0% | | Tenant improvements | $2,900 | $5,897 | $8,797 | - The long-term renewal rate for the period of **2010 through 2024** was **83.2%**[33](index=33&type=chunk) [Other Property Portfolio Data](index=19&type=section&id=Other%20Property%20Portfolio%20Data) The company's portfolio is predominantly structured with triple net leases (92.9%) and features a high percentage of leases with future renewal options (98.1%). Rent increases are primarily tied to CPI (82% of annual base rent), providing inflation protection Rent Increases (% of Annual Base Rent) | Type | Annual | Five Year | Other | Total | | :--------- | :----- | :-------- | :---- | :---- | | CPI | 37% | 44% | 1% | 82% | | Fixed | 2% | 11% | 1% | 14% | | No increases | — | — | 4% | 4% | - **92.9%** of annual base rent is from triple net leases[38](index=38&type=chunk) - **98.1%** of annual base rent is from leases containing future lease renewal options[38](index=38&type=chunk) [Earnings Guidance](index=19&type=section&id=Earnings%20Guidance) This section provides the company's financial outlook for 2025, including projected net earnings, FFO, and AFFO per share, along with anticipated acquisition and disposition volumes [2025 Earnings Guidance](index=19&type=section&id=2025%20Guidance) The company has provided 2025 guidance projecting net earnings per share between $1.97 and $2.02, Core FFO per share between $3.33 and $3.38, and AFFO per share between $3.39 and $3.44, alongside planned acquisition and disposition volumes 2025 Guidance | Metric | Range | | :-------------------------------------------------------------------------------- | :-------------------- | | Net earnings per share excluding any gains on disposition of real estate, impairment charges, and executive retirement costs | $1.97 - $2.02 per share | | Real estate depreciation and amortization per share | $1.36 per share | | Core FFO per share | $3.33 - $3.38 per share | | AFFO per share | $3.39 - $3.44 per share | | General and administrative expenses | $47 - $48 Million | | Real estate expenses, net of tenant reimbursements | $15 - $16 Million | | Acquisition volume | $500 - $600 Million | | Disposition volume | $80 - $120 Million |