Company: NNN
Filing Date: 2025-02-11
Form Type: 10-K
Source: 0000950170-25-017472
Chunk: 85

Company: NNN REIT, INC.
Filing Date: 2025-02-11
Form: 10-K
Item: Item 1B
Chunk 85
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4 and 2023, respectively, and reclassified certain tenants as cash basis for accounting purposes. During the year ended December 31, 2022, no tenants were deemed as cash basis for accounting purposes.The following table summarizes those tenants classified as cash basis for accounting purposes as of December 31:

          2024

          2023

          2022

          Number of tenants

          12

          9

          8

          Cash basis tenants as a percent of:

          Total Properties

          2.5
          %

          3.5
          %

          5.0
          %

          Total annual base rent(1)

          4.3
          %

          5.0
          %

          7.0
          %

          Total gross leasable area

          4.5
          %

          4.8
          %

          6.6
          %

           (1)
           Based on annualized base rent for all leases in place on each respective date.

           $860,562,000 as of December 31, 2024.

           $818,749,000 as of December 31, 2023.

           $771,984,000 as of December 31, 2022.
          
         During the years ended December 31, 2024, 2023 and 2022, NNN recognized $39,495,000, $56,229,000 and $62,454,000, respectively, of rental income from certain tenants for periods following their classification to cash basis for accounting purposes. During the years ended December 31, 2023 and 2022, one and three tenants, respectively, were reclassified to accrual basis for accounting purposes due to their improved qualitative and/or quantitative credit factors. More information regarding the reclassification in 2023 can be found in "Note 2 – Real Estate". The impact of the reclassification in 2022 was immaterial.NNN includes an allowance for doubtful accounts in rental income on the Consolidated Statements of Income and Comprehensive Income.Real Estate – Held For Sale. Real estate held for sale is not depreciated and is recorded at the lower of cost or fair value, less cost to sell. On a quarterly basis, the Company evaluates its Properties for held for sale classification based on specific criteria as outlined in FASB ASC Topic 360, Property, Plant and Equipment, including management's intent to commit to a