Company: NNN
Filing Date: 2025-02-11
Form Type: 10-K
Source: 0000950170-25-017472
Chunk: 161

Company: NNN REIT, INC.
Filing Date: 2025-02-11
Form: 10-K
Item: Item 6
Chunk 161
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 addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected recovery of pre-petition and post-petition bankruptcy claims. When NNN deems the collection of rental income from a tenant not probable, uncollected and previously recognized rental revenue and any related accrued rent are reversed as a reduction to rental income and, subsequently, rental income is only recognized when cash receipts are received. At this point, a tenant is deemed cash basis for accounting purposes. If NNN subsequently deems the collection of rental income is probable, any related accrued rental income or expense is restored.

58

As a result of the review of collectability, NNN recorded a write-off of $763,000 and $204,000 of outstanding receivables and related accrued rent during the years ended December 31, 2024 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, 202