Company: NNN
Filing Date: 2025-02-11
Form Type: 10-K
Source: 0000950170-25-017472
Chunk: 223

Company: NNN REIT, INC.
Filing Date: 2025-02-11
Form: 10-K
Item: Item 8
Chunk 223
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 probability of outstanding and future lease payment collections. Estimates are sensitive to evaluations by management about current and future expectations of market and economic conditions. Actual results could differ from those estimates.

Note 2 – Real Estate:Real Estate – PortfolioLeases. At December 31, 2024, NNN's real estate portfolio has a weighted average remaining lease term of 10 years and consisted of 3,533 leases classified as operating leases and an additional four leases accounted for as direct financing leases.The following is a summary of the general structure of the leases in the Property Portfolio, although the specific terms of each lease can vary significantly. Typically, the Property leases provide for initial terms of 10 to 20 years. The Properties are generally leased under triple-net leases, pursuant to which the tenant typically bears responsibility for all operating expenses of the Property, including utilities, real estate taxes and assessments, property and liability insurance, maintenance, repairs and capital expenditures. Certain Properties are subject to leases under which NNN retains responsibility for specific costs and expenses associated with the Property. NNN's leases provide for annual base rental payments (generally payable in monthly installments), and generally provide for limited increases in rent as a result of increases in the Consumer Price Index ("CPI") or fixed increases.Generally, NNN's leases provide the tenant with one or more multi-year renewal options, subject to generally the same terms and conditions provided under the initial lease term, including rent increases. NNN's lease term is based on the non-cancellable base term unless economic incentives make it reasonably certain that an option period to extend the lease will be exercised, in which event NNN includes the renewal options. Some of the leases also provide that in the event NNN wishes to sell the Property subject to that lease, NNN first must offer the lessee the right to purchase the Property on the same terms and conditions as any offer which NNN intends to accept for the sale of the Property.

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Real Estate Portfolio. NNN's real estate consisted of the following at December 31 (dollars in thousands): 

        2024

        2023

        Land and improvements (1)
         
        $
        2,919,976

        $
        2,878,400

        Buildings and improvements

        7,805,939

        7,368,873

        Leasehold interests

        355

        355

        10,726,270

        10,247,628