Company: NNN
Filing Date: 2025-02-11
Form Type: 10-K
Source: 0000950170-25-017472
Chunk: 20

Company: NNN REIT, INC.
Filing Date: 2025-02-11
Form: 10-K
Item: Item 1
Chunk 20
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 20 years (plus option terms), which gives NNN's tenants exclusive control over the ability to institute energy conservation and environmental management programs at the Properties. The majority of NNN's tenants are large companies with sophisticated conservation and sustainability programs designed to conserve environmental resources and limit the impact of the use of NNN's Properties on the environment through, among other initiatives, the implementation of green building and lighting standards, emission reduction programs and recycling programs. NNN's leases generally require tenants to fully comply with all environmental laws, rules and regulations, including any remediation requirements. NNN's risk management associates actively monitor any environmental conditions on NNN's Properties to ensure that the tenants meet their obligations to remediate and/or mitigate any open environmental matters. NNN's acquisition process includes obtaining an environmental assessment from a licensed environmental consultant to understand any environmental risks and liabilities associated with a Property and to ensure that the tenant will address any environmental issues. NNN also researches and reviews climate change metrics primarily related to wildfire, water stress and depletion, flooding and sea level rise risks. Furthermore, NNN maintains a portfolio environmental insurance policy that covers substantially all of NNN's Properties for certain environmental risks.

Additionally, NNN's form leases contain "green lease clauses" (to require the tenants to report energy usage and emissions), which NNN encourages tenants to accept during negotiations. 

Climate Preparedness. NNN regularly monitors the status of impending natural disasters and the impact of such disasters on its Property Portfolio. In the substantial majority of leases, NNN's tenants are required to carry full replacement cost coverage on all improvements located on the Properties. For those Properties located in a nationally designated flood zone, NNN typically requires the tenants to carry flood insurance pursuant to the federal flood insurance program. For those Properties located in an area of high earthquake risk, NNN aims to require its tenants carry earthquake insurance above what is generally covered in an extended coverage policy. In addition, NNN also carries a contingent extended coverage policy on the Property Portfolio, which provides coverage for certain casualty events, including fire and windstorm. In cases where NNN's tenants do not provide coverage, or if a Property is vacant, NNN carries the necessary direct insurance coverage.

Property Portfolio

As of December 31, 2024, NNN owned 3,568 Properties in 49 states with an aggregate gross leasable area of approximately 36,557,000 square feet, and a weighted average remaining lease term of 10 years. Approximately 98 percent of total Properties were leased