NNN REIT(US:NNN)2026-02-11 13:36Property Portfolio - As of December 31, 2025, NNN owned 3,692 properties with a total gross leasable area of approximately 39,578,000 square feet and a weighted average remaining lease term of 10.2 years[32]. - 98.3% of NNN's properties were leased as of December 31, 2025[32]. - The average annual base rental payment for NNN's leases was $256,000, with payments ranging from $11,000 to $4,085,000[34]. - 63.0% of the Property Portfolio annual base rent is generated from tenants in six lines of trade: automotive service (18.6%), convenience stores (16.3%), restaurants (14.3%), entertainment (7.2%), and dealerships (6.6%)[58]. - 40.9% of the Property Portfolio annual base rent is generated from properties located in five states: Texas (18.4%), Florida (8.7%), Illinois (5.1%), Georgia (4.5%), and Ohio (4.2%)[58]. - The total annualized base rent (ABR) for the properties as of December 31, 2025, was $928,081,000, an increase from $860,562,000 in 2024[148]. - The property portfolio is geographically concentrated in regions with above-average population growth, particularly in the southeastern (25.3%) and southern (24.6%) United States[133]. - The occupancy rate of the property portfolio remained at least 98% leased as of December 31, 2025, ensuring consistent operating results[134]. - NNN owned 64 vacant, un-leased properties, accounting for less than 2% of total properties and aggregate gross leasable area[173]. Financial Performance - NNN's total debt to total gross assets ratio was approximately 42% as of December 31, 2025[165]. - Rental revenues for 2025 increased to $904,342,000 from $848,657,000 in 2024, representing a growth of 6.6%[152]. - Total revenues for 2025 reached $926,213,000, up from $869,266,000 in 2024, marking an increase of 6.5%[152]. - Total operating expenses rose to $384,947,000 in 2025, compared to $333,684,000 in 2024, reflecting a 15.4% increase[155]. - Depreciation and amortization expenses increased to $268,439,000 in 2025 from $249,681,000 in 2024, a rise of 7.5%[155]. - Impairment losses on real estate increased significantly to $28,602,000 in 2025 from $6,632,000 in 2024[157]. - Interest expense for 2025 was $203,955,000, up from $184,017,000 in 2024, indicating an increase of 10.9%[159]. - Cash provided by operating activities was $667,131,000 in 2025, compared to $635,504,000 in 2024, an increase of 4.9%[166]. Debt and Financing - NNN had outstanding debt totaling $4,820,424,000, with no secured debt[73]. - NNN's total unsecured notes payable amounted to $4,472,324,000, and $348,100,000 was outstanding on the Credit Facility[69]. - NNN's line of credit was amended in April 2024 to increase borrowing capacity from $1,100,000,000 to $1,200,000,000, with a weighted average interest rate of 5.04% for 2025[177]. - In December 2025, NNN entered into a senior unsecured term loan with a capacity of $300,000,000, maturing in February 2029[178]. - NNN incurred debt issuance costs totaling $44,420,000 related to outstanding note offerings, which are being amortized over the term of the respective notes[186]. - NNN's variable rate Credit Facility had an outstanding balance of $348,100,000 with a weighted average interest rate of 5.04%[193]. - The weighted average interest rate for NNN's unsecured debt obligations is 4.20% with a weighted average maturity of 10.8 years[196]. - NNN's total fixed rate debt obligations amount to $4,550,000,000 with varying interest rates, the lowest being 2.54% for 2030[196]. Dividends and Shareholder Information - NNN has increased its annual dividend per common share for 36 consecutive years, marking it as one of the public REITs with the longest record of consecutive annual dividend increases[21]. - NNN declared dividends of $113,502,000, or $0.600 per share, payable to stockholders in January 2026[120]. - NNN declared dividends of $443,202,000 in 2025, an increase from $420,239,000 in 2024, with a per share dividend of $2.360 in 2025 compared to $2.290 in 2024[175]. - As of January 30, 2026, NNN had 1,364 registered holders of record of its common stock[121]. - NNN's Dividend Reinvestment and Stock Purchase Plan allowed for the issuance of 65,062 shares in 2025, yielding net proceeds of $2,628,000, compared to 64,654 shares and $2,634,000 in 2024[191]. Risk Factors - NNN's business is significantly dependent on single-tenant properties, which increases the risk of revenue loss if a tenant defaults[55]. - The occurrence of tenant bankruptcies could materially adversely affect NNN's cash flow and results of operations[52]. - Changes in financial and economic conditions, including inflation and tariffs, may adversely impact NNN and its tenants[46]. - A significant portion of Properties are leased to unrated tenants, which may increase investment-related credit risk[62]. - NNN's investments are generally illiquid, which could significantly impede its ability to respond to market conditions or adverse changes in tenant performance[59]. - NNN may not be able to successfully execute its acquisition strategies, affecting its ability to expand its Property Portfolio[57]. - Environmental liabilities associated with properties owned by NNN could significantly impact its financial results and operational capabilities[87]. - Compliance with new governmental laws and regulations may require significant expenditures and could adversely affect NNN's results of operations[89]. - NNN's cybersecurity risks include potential breaches that could lead to significant liabilities and reputational harm[92][94]. - The company faces risks associated with the adoption of AI, including potential inaccuracies and data privacy concerns[98]. - Changes in accounting standards could materially impact NNN's reported financial performance and that of its tenants[102]. Management and Operations - As of January 30, 2026, NNN employed 85 associates, with nearly 40% having been with the company for over 10 years[28]. - NNN's executive team and senior managers average over 19 years of experience with the company[99]. - NNN's ability to maintain effective internal control over financial reporting is crucial for preventing financial fraud and ensuring reliable financial reports[100]. - NNN's management evaluates tenant creditworthiness through financial statements, payment history, and industry news, which is crucial for maintaining rental income[132]. - NNN's management is committed to protecting its information systems through various cybersecurity measures and risk management strategies[109]. - NNN's ability to pay dividends is contingent upon its earnings, financial condition, and compliance with REIT status[75]. - The company is obligated to comply with financial covenants that could restrict its operating activities and lead to defaults if not met[74]. - NNN's organizational documents do not limit the level of debt it may incur, potentially increasing financial risk[69]. - NNN's ability to obtain favorable capital for business objectives may be adversely affected by its existing debt obligations[68].