Core Insights - The article focuses on the net lease real estate sector, which is characterized by corporate tenants and long-term leases, highlighting its significance within the broader real estate investment trust (REIT) landscape [1] Industry Overview - The net lease industry is described as a niche sector of real estate, emphasizing its unique attributes such as the presence of corporate tenants and the structure of long maturity leases [1]

Financial Data and Key Metrics Changes - NNN reported core FFO of $0.85 per share and AFFO of $0.86 per share for Q3 2025, representing increases of 1.2% and 2.4% year-over-year respectively [10] - Annualized base rent reached $912 million at the end of the quarter, an increase of over 7% year-over-year [10] - The company's NOI margin was 98% for the quarter, with G&A as a percentage of total revenues at about 5% [11] Business Line Data and Key Metrics Changes - NNN closed 20 deals containing 57 assets for $283 million during the quarter, with an initial cap rate of 7.3% and an average lease duration of nearly 18 years [2][7] - The company executed a high renewal rate of 92% for leases, with rental rates at 108% above prior rents [6] - Seven new properties were leased to new tenants at rates of 124% of previous rents, indicating strong demand [6] Market Data and Key Metrics Changes - The company is increasing its 2025 acquisition volume guidance to a midpoint of $900 million, which would be an all-time high for NNN [3][15] - NNN's balance sheet remains strong with $1.4 billion in liquidity and an industry-leading average debt maturity of nearly 11 years [2][8] Company Strategy and Development Direction - NNN's strategy focuses on disciplined growth, proactive management, and optimizing its portfolio to drive sustainable growth and enhance shareholder value [2][8] - The company aims to resolve more than 75% of its vacant assets by the end of Q1 2026, positioning itself for future growth [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving an occupancy rate exceeding 98% by year-end, despite temporary reductions due to legal disputes with tenants [5][6] - The company raised its guidance for core FFO per share to a range of $3.36-$3.40 and AFFO per share to $3.41-$3.45, reflecting year-to-date outperformance [15] Other Important Information - NNN has maintained a healthy 70% AFFO payout ratio with a quarterly dividend of $0.60, equating to a 5.6% annualized yield [14] - The company has proactively managed risks, including the successful resolution of the At Home bankruptcy, which significantly de-risked its capital structure [12][16] Q&A Session Summary Question: Could we get more color around the outsized interest income? - Management attributed the increase in interest income to a high cash balance and better-than-expected interest rates on short-term deposits [18] Question: What is the rationale behind using equity to fund acquisitions? - The company aims for a 60/40 mix of equity and debt for funding, and current market conditions allow for accretive acquisitions despite higher costs of capital [20][21] Question: Are you seeing increased competition impacting pricing? - Management acknowledged heightened competition but emphasized that NNN's long-standing tenant relationships allow for continued execution without significant pricing pressure [26] Question: What are the bad debt assumptions now compared to earlier in the year? - The company reduced its bad debt assumption for the full year to 25 basis points, down from 60 basis points, due to limited losses and successful tenant resolutions [30] Question: What is the expected occupancy trajectory going forward? - Management expects to resolve a significant number of vacancies by year-end, aiming for improved occupancy rates as leases are renewed and assets are disposed of [32][34] Question: How does the company plan to handle debt maturity in 2026? - NNN is exploring various options for refinancing, including bank loans and bond markets, to manage upcoming debt maturities effectively [59]

Group 1 - The recent months have seen a resurgence in net lease investments, indicating a positive trend in this sector [1] - Essential Properties Realty Trust, Inc. (EPRT) has been highlighted as a leader in the net lease market, showcasing its strong position [1]

Quarterly Investor Presentation REAL ESTATE PARTNER TO THE WORLD'S LEADING COMPANIES® November 2025 Safe Harbor For Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this presentation, the words "estimated," "anticipated," "expect," "believe," "intend," "continue," "sh ...

Core Viewpoint - Realty Income (O) has achieved an 11.6% year-to-date gain, leading to discussions about its valuation and whether it is a good time for investment [1][8] Performance Summary - Realty Income has outperformed peers in the free-standing retail space, including Agree Realty Corporation (ADC) and NNN REIT, Inc. (NNN), while also surpassing the broader Zacks REIT and Equity Trust - Retail industry, although it lags behind the S&P 500 composite [1][8] Growth and Expansion - The company is expanding in the U.S. and Europe, which supports its long-term growth outlook, and a recent dividend increase has positively impacted investor sentiment [2][8] - Realty Income owns over 15,600 properties across the U.S. and Europe, with a tenant mix focused on non-discretionary retail and service categories, contributing to stable cash flows [4][10] - The company has a disciplined acquisition strategy, maintaining a historical median occupancy rate of 98.3%, with current occupancy at 98.6% as of June 30, 2025 [5][10] Financial Strength - Realty Income has $5.1 billion in liquidity and maintains investment-grade credit ratings, with a dividend yield of 5.47% [10][18] - The company has increased its dividend for 112 consecutive quarters, with the most recent hike being its 132nd since its 1994 listing [10][18] Valuation Insights - Realty Income's stock is trading at a forward 12-month price-to-FFO of 13.53X, which is below the retail REIT industry average of 15.05X but above its one-year median of 13.15X [15] - The valuation is relatively favorable compared to Agree Realty Corporation, which trades at 15.89X, while NNN trades at 11.91X [15] Investment Outlook - Realty Income is recognized as a leading dividend-focused REIT, valued for its consistent payouts and long-term growth profile, with a diversified tenant base providing resilience during economic uncertainty [17][18] - The company’s strategic expansion in Europe and strong financial position suggest a solid foundation for long-term growth, although new investors may exercise caution until market conditions stabilize [18]

Financial Data and Key Metrics Changes - The company reported cash NOI of $41.9 million for Q2 2025, a 1.7% increase from Q2 2024, primarily driven by acquisitions [12] - AFFO was $0.54 per diluted share for Q2 2025, reflecting a 1.7% increase from Q2 2024, despite a 2.7% decrease year-over-year due to higher interest expenses [13][15] - The liquidity position at the end of the quarter was $568.8 million, with a net debt to EBITDAre ratio of 3.6 times [17] Business Line Data and Key Metrics Changes - The average EBITDARM coverage ratio improved to 5.31 times, up from 4.64 times in the previous year, indicating stronger tenant performance [16] - The company maintained a strong tenant base, with 40% associated with investment-grade rated tenants, up from 36.4% year-over-year [16] Market Data and Key Metrics Changes - The company closed on a two-property medical outpatient building portfolio for approximately $16.2 million, enhancing its operational synergies [20] - Year-to-date acquisitions totaled approximately $75 million, with over $70 million of properties under exclusive LOI [21] Company Strategy and Development Direction - The company focuses on necessity-based healthcare solutions, aiming to capitalize on the aging population and limited competition in its markets [5][19] - A strategic decision was made to demolish the Stoughton asset to halt expense leakage and maximize future land value [10][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow despite macroeconomic uncertainties, emphasizing a prudent capital allocation strategy [4][11] - The company aims to maintain a healthy dividend while pursuing growth through acquisitions and share repurchases [17] Other Important Information - The board approved a three-year share repurchase program for up to $75 million, with a cap of $25 million per year [15] - The company is currently under exclusive LOI for additional acquisitions, indicating a robust pipeline for future growth [21] Q&A Session Summary Question: What types of assets are included in the $70 million LOIs? - Management confirmed that the properties under LOI are consistent with their current portfolio and have long lease durations [25][26] Question: What is the current status of the Stoughton facility? - Management indicated that the demolition process is underway and will significantly reduce carrying costs [39][57] Question: How does the company evaluate share repurchases versus acquisitions? - Management stated that share repurchases are viewed as a tool, and decisions are based on the perceived disconnect between share price and intrinsic value [30][41] Question: What are the expectations for lease expirations in the near term? - Management is optimistic about renewing nearly all leases expiring in 2025 and 2026, with only minor exposures expected [42][46]

Financial Data and Key Metrics Changes - The company reported distributable earnings (DE) of $151 million or $0.43 per share, while GAAP net income was $130 million or $0.38 per share [4] - Capital deployment for the first six months of the year reached $5.5 billion, surpassing the total for all of 2024 [4] - The adjusted debt to undepreciated equity ratio ended the quarter at 2.5 times, slightly increasing from the previous quarter [14] Business Line Data and Key Metrics Changes - Commercial and residential lending contributed DE of $174 million for the quarter, with a loan portfolio growth of $946 million, bringing the total to $15.5 billion [5] - The residential lending portfolio ended the quarter at $2.3 billion, with $60 million in repayments [9] - The infrastructure lending segment contributed DE of $21 million, with a record $700 million of loans committed [12] Market Data and Key Metrics Changes - The company’s active servicing portfolio ended the quarter at $10.3 billion, with $1 billion of new transfers dominated by office properties [11] - The CMBS portfolio increased by $55 million due to new purchases [12] - The weighted average risk rating of the portfolio remained stable at 2.9 [7] Company Strategy and Development Direction - The acquisition of Fundamental Income Properties for $2.2 billion is expected to enhance the company’s capabilities in the net lease sector, with a focus on leveraging existing expertise [13][18] - The company aims to grow its diversified business model, reducing reliance on CRE loans, which now represent only 52% of total assets compared to 65% in 2022 [22] - The strategy includes optimizing the balance sheet by refinancing at lower spreads and maintaining a strong liquidity position [14][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for lower interest rates and a recovery in the real estate market, which could lead to increased transaction volumes [29][30] - The company is well-positioned to navigate challenges and is focused on becoming investment grade, with plans to grow earnings materially over time [41][36] - The management highlighted the importance of maintaining a fortress balance sheet and the benefits of diversification in sustaining dividends [35][36] Other Important Information - The company received recognition from rating agencies for its diversity, leverage profile, liquidity position, and stable earnings [14] - The company has maintained its dividend for 47 consecutive quarters, reflecting its commitment to shareholder returns [22] Q&A Session Summary Question: Expectations for CRE loan growth and impact of Fed rate cuts - Management expects to end the year close to $10 billion in CRE loans, with lower rates likely accelerating loan growth and refinancing opportunities [46][48] Question: Ramp up of the net lease portfolio business - The company is optimistic about growing the net lease portfolio, with potential for larger acquisitions as the pipeline rebuilds [56][60] Question: Sustainability of spreads in the infrastructure business - Management indicated that while spreads have widened, they are maintaining margins through more direct deals and expect continued growth in infrastructure origination [62][71] Question: Credit portfolio stabilization and hotel exposure - Management believes credit in the portfolio has stabilized, with no significant losses in the hotel sector, which comprises 6% of the overall asset base [78][82]

Financial Performance & Strategic Objectives - GNL reduced net debt by $748 million in Q2 2025, decreasing Net Debt to Adjusted EBITDA to 66x[10] - GNL increased the low end of its AFFO per Share guidance to a new range of $092 to $096[22] - GNL reaffirms its Net Debt to Adjusted EBITDA range of 65x to 71x[22] - GNL's liquidity totaled $10 billion in Q2 2025[36] Portfolio Transformation & Leasing Activity - GNL completed the final phases of the ~$18 billion Multi-Tenant Portfolio Sale, transforming into a pure-play net-lease REIT[11] - GNL achieved 60% renewal spreads and increased occupancy to 98% across the portfolio[12] - GNL's total non-core dispositions reach over $30 billion[24] - GNL repurchased 102 million shares for a total of $77 million[13] Balance Sheet & Credit Rating - S&P upgraded GNL's corporate credit rating to BB+ from BB[12] - GNL reduced net debt by $20 billion since Q2'24[13, 29] - GNL refinanced its Revolving Credit Facility, extending weighted average debt maturity to 37 years[11, 13]

Company Overview - Realty Income is the 6th largest global REIT with approximately $61 billion in gross real estate value[7] - The company has 15,606 commercial real estate properties[6] - Approximately 34% of rent comes from investment-grade clients[6] - The company's annualized base rent is approximately $5.17 billion[13] Portfolio Diversification - Approximately 90% of the total rent is resilient to economic downturns and/or isolated from e-commerce pressures[9] - Non-Discretionary, Low Price Point and/or Service-Oriented Retail accounts for 73% of the annualized base rent[9] - The company has 1,630 clients across 91 industries[9] Financial Performance and Guidance - The company has a strong dividend track record with over 30 consecutive years of rising dividends and a 4.2% CAGR[10] - The company is increasing its 2025 investment volume guidance to approximately $5.0 billion[22] - The company expects AFFO per share in the range of $4.24 to $4.28 for 2025[22] Investment and Capital Strategy - The company invested $1.2 billion in the second quarter of 2025 at an initial weighted average cash yield of 7.2%[22] - The company sourced $43 billion of volume in the second quarter of 2025, reflecting a 2.7% selectivity rate[22] - The company has sourced ~$66B in volume year-to-date, including $43B in 2Q alone[64]

Group 1 - The theme of the day is creativity in business, emphasizing the complexity and dynamic nature of running a business [1] - Businesses are often praised for adhering to their core mission rather than diversifying into unrelated areas, with Berkshire Hathaway cited as a notable example [1]