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What changed in NNN REIT, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NNN REIT, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+255 added−281 removedSource: 10-K (2026-02-11) vs 10-K (2025-02-11)

Top changes in NNN REIT, INC.'s 2025 10-K

255 paragraphs added · 281 removed · 203 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeNNN is committed to expanding educational opportunities, strengthening neighborhoods, and encouraging volunteer service in the communities where associates live and work. NNN sponsors specific volunteer days throughout the year at various charities and organizations, including Ronald McDonald House of Central Florida and Orange County Animal Services.
Biggest changeCommunity Service and Partnerships NNN supports associates volunteering in our local communities, including organized volunteer days at charities such as Ronald McDonald House of Central Florida and Orange County Animal Services. Additionally, NNN has been a long-time contributor to several local community charities, including Elevate Orlando and Boys & Girls Clubs of Central Florida.
Investment in Real Estate or Interests in Real Estate NNN's management believes that single-tenant, freestanding net lease retail properties will continue to provide attractive investment opportunities and that NNN is well suited to take advantage of these opportunities because of its experience in accessing capital markets, and its ability to source, underwrite and acquire such properties.
Investment in Real Estate or Interests in Real Estate NNN's management believes that single-tenant, freestanding net lease properties will continue to provide attractive investment opportunities and that NNN is well suited to take advantage of these opportunities because of its experience in accessing capital markets and its ability to source, underwrite and acquire such properties.
Additional Information NNN's corporate headquarters is located at 450 South Orange Avenue, Suite 900, Orlando, Florida 32801, and its telephone number is (407) 265–7348. NNN's website can be accessed at www.nnnreit.com .
Additional Information NNN's corporate headquarters is located at 450 South Orange Avenue, Suite 900, Orlando, Florida 32801, and its telephone number is (407) 265–7348. 6 NNN's website can be accessed at www.nnnreit.com .
NNN intends to comply with the requirements of Item 5.05 of Form 8-K regarding amendments to and waivers under the code of business conduct and ethics applicable to its Chief Executive Officer, Principal Financial Officer and Principal Accounting Officer by providing such information on its website within four days after effecting any amendment to, or granting any waiver under, that code, and NNN will maintain such information on its website for at least twelve months.
NNN intends to comply with the requirements of Item 5.05 of Form 8-K regarding amendments to and waivers under the code of business conduct and ethics applicable to its Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer and Chief Technology Officer by providing such information on its website within four days after effecting any amendment to, or granting any waiver under, that code, and NNN will maintain such information on its website for at least twelve months.
On NNN's website you can also obtain, free of charge, a copy of this Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as amended, as soon as reasonably practicable, after NNN files such material electronically with, or furnishes it to, the Securities and Exchange Commission ("Commission" or "SEC").
On NNN's website you can also obtain, free of charge, a copy of this Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as amended, as soon as reasonably practicable, after NNN files such material electronically with, or furnishes it to, the Commission.
In deciding whether to sell a Property, factors NNN may consider include, but are not limited to, potential capital appreciation, net cash flow, tenant credit quality, tenant's line of trade, tenant's lease renewal probability, the composition of the Property Portfolio, market lease rates, local market conditions, future uses of the Property, potential use of sale proceeds and federal income tax considerations.
In deciding whether to sell a Property, factors NNN may consider include, but are not limited to, potential capital appreciation, net cash flow, tenant's credit quality, tenant's line of trade, tenant's lease renewal probability, the composition of the Property Portfolio, market lease rates, local market conditions, future uses of the Property, potential use of sale proceeds and federal and state income tax considerations.
NNN's leases generally require each tenant to undertake primary responsibility for complying with all regulations, rules and laws, but failure to comply could result in fines by governmental authorities, awards of damages to private litigants, or restrictions on the ability to conduct business on such Properties.
NNN's leases typically require each tenant to undertake primary responsibility for complying with all regulations, rules and laws, but failure to comply could result in fines by governmental authorities, awards of damages to private litigants or restrictions on the ability to conduct business on such Properties.
Financing Strategy NNN's financing objective is to manage its capital structure effectively in order to provide sufficient capital to execute its operating and investing strategies while servicing its debt requirements, maintaining its investment grade credit ratings, staggering debt maturities and providing value to NNN's stockholders.
Financing Strategy NNN's financing objective is to manage its capital structure effectively in order to provide sufficient capital to execute its operating and investing strategies while servicing its debt obligations, maintaining its investment grade credit ratings, staggering debt maturities and providing value to NNN's stockholders.
Operating Strategies NNN's strategy is to invest primarily in retail real estate that is typically well located within each local market for its tenants' retail lines of trade. Management believes that these types of properties, generally leased pursuant to triple-net leases, provide attractive opportunities for stable current returns and the potential for increased returns and capital appreciation.
Operating Strategies NNN's strategy is to invest in real estate that is well located within each local market for its tenants' lines of trade. Management believes that these types of properties, typically leased pursuant to triple-net leases, provide attractive opportunities for stable current returns and the potential for increased returns and capital appreciation.
The operating strategies employed by NNN have allowed NNN to increase the annual dividend (paid quarterly) per common share for 35 consecutive years. NNN has the third longest record of consecutive annual dividend increases of all publicly traded REITs.
The operating strategies employed by NNN have allowed NNN to increase the annual dividend (paid quarterly) per common share for 36 consecutive years. NNN has the third longest record of consecutive annual dividend increases of all publicly traded REITs.
NNN typically expects to fund both its short-term and long-term liquidity requirements, including investments in additional properties, with cash and cash equivalents, cash provided from operations, borrowings from its unsecured revolving credit facility ("Credit Facility"), or proceeds from the sale of Properties.
NNN expects to fund both its short-term and long-term liquidity requirements, including investments in additional properties, with cash and cash equivalents, cash provided from operations, borrowings from its unsecured revolving credit facility ("Credit Facility") or senior unsecured term loan ("Term Loan") or proceeds from the sale of Properties.
In general, the responsible party (which may include the seller, a previous owner, the tenant or an adjacent or former land owner) is liable for the cost of the environmental remediation for each of these Properties.
In general, the responsible party (which may include NNN, the seller, a previous owner, the tenant or an adjacent or former landowner) is liable for the cost of the environmental remediation for each of these Properties.
In order to mitigate exposure to environmental liability, NNN maintains an environmental insurance policy which provides some environmental liability coverage for substantially all of its Properties. As a part of its acquisition due diligence process, NNN obtains an environmental site assessment for each property.
In order to mitigate exposure to environmental liability, NNN maintains an environmental insurance policy which provides some environmental liability coverage for substantially all of its Properties. As part of its due diligence process, NNN obtains an environmental site assessment for each property it acquires.
Additional information on NNN's website includes the guiding policies adopted by NNN, which include NNN's Corporate Governance Guidelines, Code of Business Conduct, Supplier Code of Conduct and Whistleblower Policy, as well as NNN's position on corporate governance and risk management, social responsibility and environmental practices and their impact in the 2023-24 Corporate Responsibility Report. 8
Additional information on NNN's website includes the guiding policies adopted by NNN, which include NNN's Corporate Governance Guidelines, Code of Business Conduct, Supplier Code of Conduct and Whistleblower Policy, as well as NNN's position on corporate governance and risk management, social responsibility and environmental practices and their impact in the most recently published Corporate Sustainability Report.
NNN may incur costs if the seller or tenant does not comply with these requirements. As of January 31, 2025, NNN had 66 Properties currently under some level of environmental remediation and/or monitoring.
NNN may incur costs if the seller or tenant does not comply with these requirements. As of January 30, 2026, NNN had 67 Properties currently under some level of environmental remediation and/or monitoring.
The ratio of total debt to total market capitalization was approximately 37 percent. Certain financial agreements, to which NNN is a party, contain covenants that limit NNN's ability to incur additional debt under certain circumstances. The organizational documents of NNN do not limit the absolute amount or percentage of debt that NNN may incur.
Certain financial agreements, to which NNN is a party, contain covenants that limit NNN's ability to incur additional debt under certain circumstances. The organizational documents of NNN do not limit the absolute amount or percentage of debt that NNN may incur.
The common shares of NNN REIT, Inc. are traded on the New York Stock Exchange (the "NYSE") under the ticker symbol "NNN." Real Estate Assets NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment ("Properties" or "Property Portfolio," or individually a "Property").
The common shares of NNN REIT, Inc. are traded on the New York Stock Exchange (the "NYSE") under the ticker symbol "NNN." NNN acquires, owns, invests in and develops high-quality properties that are leased primarily to tenants under long-term, net leases, with minimal ongoing capital expenditures and are primarily held for investment ("Properties" or "Property Portfolio," or individually a "Property").
As of January 31, 2025, NNN had not been notified by any governmental authority of, nor is NNN's management aware of, any non-compliance with the ADA that NNN's management believes would have a material adverse effect on its business, financial position or results of operations. 7 Other Regulations, Rules and Laws State and local governmental entities regulate the use of the Properties.
As of January 30, 2026, NNN had not been notified by any governmental authority of, nor is NNN's management aware of, any non-compliance with the ADA that NNN's management believes would have a material adverse effect on its business, financial position or results of operations.
In such cases where NNN intends to acquire a property where some level of contamination may exist, NNN generally requires the seller or tenant to (i) remediate the problem, (ii) indemnify NNN for environmental liabilities, and/or (iii) agree to other arrangements deemed appropriate by NNN, including, under certain circumstances, the purchase of environmental insurance to address environmental conditions at the property.
In cases where NNN intends to acquire real estate where evidence of some level of known contamination may exist, NNN generally requires the seller or tenant to (i) remediate the contamination in accordance with applicable laws, rules and regulations, (ii) indemnify NNN for environmental liabilities, and/or (iii) agree to other arrangements deemed appropriate by NNN, including, under certain circumstances, the purchase of environmental insurance.
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 as of December 31, 2024.
Property Portfolio As of December 31, 2025, NNN owned 3,692 Properties in all 50 states, the District of Columbia and Puerto Rico, with an aggregate gross leasable area of approximately 39,578,000 square feet and a weighted average remaining lease term of 10.2 years. As of December 31, 2025, 98.3 percent of the Properties were leased.
NNN owned 3,568 Properties with an aggregate gross leasable area of approximately 36,557,000 square feet, located in 49 states, with a weighted average remaining lease term of 10 years as of December 31, 2024. Approximately 98 percent of the Properties were leased as of December 31, 2024.
NNN owned 3,692 Properties in all 50 states, the District of Columbia and Puerto Rico, with an aggregate gross leasable area of approximately 39,578,000 square feet and a weighted average remaining lease term of 10.2 years as of December 31, 2025. As of December 31, 2025, 98.3 percent of the Properties were leased.
The success of NNN's efforts to nurture the growth and development of its associates is evident in NNN's average tenure, with nearly half of its associates having been with the Company for 10 or more years.
The success of NNN's efforts to nurture the growth and development of the Company's associates is evident in the average tenure, with nearly 40% of the associates having been with the Company for 10 or more years. 4 The Company provides comprehensive benefits to ensure associates receive competitive compensation and support for work and life outside of work.
The following table summarizes NNN's Property Portfolio as of December 31, 2024 (in thousands): Size (1) Total Dollars Invested (2) High Low Average High Low Average Land 3,733 5 102 $ 10,571 $ 5 $ 829 Building 313 1 10 45,286 30 2,240 (1) Approximate square feet.
The following table summarizes NNN's Property Portfolio as of December 31, 2025 (in thousands): Size (1) Total Dollars Invested (2) High Low Average High Low Average Land 3,600 5 109 $ 14,138 $ 9 $ 851 Building 313 1 11 45,286 30 2,311 (1) Approximate square feet. (2) Costs vary depending upon size, improvements, local market conditions and other factors.
Strategies and Policy Changes Any of NNN's strategies or policies described above may be changed at any time by NNN without notice to or a vote of NNN's stockholders. Corporate Sustainability Matters NNN is focused on achieving success for its stockholders, providing a world-class working environment for NNN associates, enriching the community and preserving environmental resources.
Strategies and Policy Changes Any of NNN's strategies or policies described above may be changed at any time by NNN without notice to or a vote of NNN's stockholders.
NNN's leases provide for annual base rental payments (generally payable in monthly installments) ranging from $7,000 to $4,085,000 (average of $245,000), and generally provide for limited increases in rent as a result of increases in the Consumer Price Index or fixed increases.
NNN's leases provide for annual base rental payments (payable in monthly installments) ranging from $11,000 to $4,085,000 (average of $256,000), the majority of which include negotiated increases in rent as a result of increases in the Consumer Price Index or fixed increases. 5 NNN's leases often provide the tenant with one or more multi-year renewal options subject to the same terms and conditions provided under the initial lease term, including rent increases.
Item 1. Bu siness The Company NNN, a Maryland corporation, is a fully integrated real estate investment trust ("REIT") formed in 1984. NNN's assets are primarily real estate assets. NNN's consolidated financial statements are included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Item 1. Bu siness The Company Overview NNN, a Maryland corporation, is a fully integrated real estate investment trust ("REIT") formed in 1984.
As of December 31, 2024, NNN had $9,062,000 of cash, cash equivalents and restricted cash or cash held in escrow and $1,200,000,000 was available for future borrowings under the Credit Facility.
As of December 31, 2025, NNN had $5,822,000 of cash, cash equivalents and restricted cash or cash held in escrow, and $851,900,000 and $300,000,000 were available for future borrowings under the Credit Facility and Term Loan, respectively. NNN may also fund liquidity requirements with new debt or equity issuances.
(2) Costs vary depending upon size, improvements, local market conditions and other factors. 6 Leases The following is a summary of the typical 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.
Leases The following is a summary of the structure of the leases in the Property Portfolio, although the specific terms of each lease can vary significantly.
NNN expects these sources of liquidity and the discretionary nature of its property acquisition funding needs will allow NNN to meet its financial obligations over the long term. As of December 31, 2024, NNN's ratio of total debt, none of which was secured debt, to total gross assets (before accumulated depreciation and amortization) was approximately 40 percent.
As of December 31, 2025, NNN's ratio of total debt, none of which was secured debt, to total gross assets (before accumulated depreciation and amortization) was approximately 42 percent. The ratio of total debt to total market capitalization was approximately 39 percent.
NNN's programs include, but are not limited to, a 401(k) plan with a company match, flexible work schedules, college saving plans, an educational assistance program, parental leave and adoption benefits, flexible spending and health savings accounts, health and wellness events, and access to a state-of-the-art online wellness platform. Community Service and Partnerships .
In addition to medical, dental and vision insurance benefits, the Company offers a 401(k) plan with employer matching contributions, fully paid parental leave, adoption benefits, flexible work schedules, college savings benefits, educational assistance, flexible spending and health savings accounts, access to an online wellness platform and Company-paid life and long-term care insurance.
Initial lease terms are generally 10 to 20 years. 2 NNN holds each Property until it determines that the sale of such Property is advantageous in view of NNN's investment objectives.
In most cases, the Property leases provide for initial terms of 10 to 20 years and a triple-net lease structure, pursuant to which the tenant bears responsibility for operating expenses of the Property, including utilities, real estate taxes and assessments, property and liability insurance, maintenance, repairs and capital expenditures. 2 NNN holds each Property until it determines that the sale of such Property is advantageous relative to NNN's investment objectives.
The process is periodically revisited and refined to proactively engage key stakeholders and to keep NNN’s materiality assessment meaningful to stakeholders while monitoring the ever-changing landscape. Human Capital Development . As of January 31, 2025, the Company employed 83 associates whose hard work and expertise drive the Company's success.
Human Capital As of January 30, 2026, the Company employed 85 talented and dedicated associates whose hard work and expertise drive NNN's success. Ingrained in the Company's talent philosophy is ensuring associates have access to engage in continuing professional and meaningful personal development opportunities.
Engrained in NNN's talent philosophy is ensuring associates have access to continuing professional and personal development opportunities that are meaningful and relevant to them as they engage in all aspects of NNN's business. Additionally, NNN offers associate mentoring and training programs and formalized talent development programs at all levels within the Company.
Additionally, NNN offers associate training programs and formalized talent development programs at all levels within the Company.
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Triple-net leases typically require the tenant to pay all utilities and real estate taxes and assessments, to maintain the interior and exterior of the property, and to carry property and liability insurance coverage.
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NNN also has the ability to limit future property acquisitions and strategically increase property dispositions. NNN expects these liquidity sources and the discretionary nature of its property acquisition funding needs will allow NNN to meet its financial obligations over the long term.
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NNN may also fund liquidity requirements with new debt or equity issuances, although newly issued debt may be at higher interest rates than the rates on NNN's existing outstanding debt. NNN also has the ability to limit future property acquisitions and strategically increase property dispositions.
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NNN's total rewards system includes compensation, benefits, wellness initiatives and professional development.
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NNN operates its business in accordance with the highest ethical standards and strives to have class-leading corporate governance standards. Holding NNN to such standards is critical to the long-term success of NNN's stockholders, associates, and community. 4 Corporate Sustainability Team.
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In most cases, the Property leases provide for initial terms of 10 to 20 years and a triple-net lease structure, pursuant to which the tenant bears responsibility for operating expenses of the Property, including utilities, real estate taxes and assessments, property and liability insurance, maintenance, repairs and capital expenditures.
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In 2022, NNN created a Corporate Sustainability Team, which reports directly to the Executive Vice President, General Counsel and Secretary, with oversight by the Governance and Nominating Committee of the Board of Directors. The Corporate Sustainability Team, led by the Corporate Sustainability Manager, is comprised of associates from a broad spectrum of seniority levels and departments of the Company.
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Additionally, the leases require tenants to fully comply with all environmental laws, rules and regulations, including any remediation requirements. Conversely, the lease terms do grant tenants exclusive control of energy conservation and environmental management initiatives on the premises. As of December 31, 2025, the weighted average remaining lease term of the Property Portfolio was 10.2 years.
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The team has both internal and external projects, including, but not limited to engaging with NNN's tenants on environmental data collection and property level sustainability, creating the annual sustainability report, and regularly engaging with raters and rankers. Materiality.
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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 case NNN includes the renewal options.
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NNN’s process for assessing materiality includes compiling a range of topics found within global standards, refined based on best corporate responsibility practices published by the National Association of Real Estate Investment Trusts (“Nareit”) and on the practices of similar companies identified through a peer benchmarking exercise.
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Other Regulations, Rules and Laws State and local governmental entities regulate the use of the Properties.
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The Corporate Sustainability Team then reviews the resulting categories, topics and definitions to create a Materiality Assessment Survey which is administered to key stakeholders, including all associates, executive management and the Board of Directors. The survey results inform company practices, policies, goals and data tracking mechanisms for relevant impacts.
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Impacts that occur along NNN’s value chain are also analyzed to understand NNN’s ability to manage or influence others to implement best corporate responsibility practices within their organizations with the goal of working collectively to mitigate impacts on the community and environment.
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The Company's gender representation has also continued to reflect balance and diversity, with a workforce comprising 57% female and 43% male as of January 31, 2025. More information can also be found in NNN's Human Capital Policy available on the Company's website at www.nnnreit.com . Total Rewards, Benefits & Work-Life Balance .
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NNN focuses on additional benefits for its associates in an effort to ensure associates are not only well compensated, but also engaged, developed and satisfied with their work-life balance. There are six key elements to NNN's total rewards system: Compensation, Benefits, Wellness, Work-Life Balance, Professional Development and Recognition.
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In addition to NNN's donation of time, NNN is also a meaningful benefactor to numerous charities in the Central Florida community, including the Boys and Girls Clubs of Central Florida and Elevate Orlando (a teacher mentor program for high-risk urban youth that help young women and men graduate high school with a plan for the future).
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Environmental Practices and Impact . As an owner of a large number of properties throughout the United States, it is important that NNN be a good steward of the environment. NNN demonstrates its commitment in a variety of ways both at NNN's headquarters and at NNN's Properties across the country.
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Many of NNN's tenants have programs that address environmental stewardship of the Properties they occupy and control. 5 NNN Corporate Headquarters. NNN's corporate headquarters is located in a building that meets the Environmental Protection Agency's (“EPA”) strict energy performance standards to achieve ENERGY STAR® certification.
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As stated by the EPA, on average, ENERGY STAR certified buildings use 35 percent less energy and generate 35 percent fewer greenhouse gas emissions than typical buildings. Property Portfolio.
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NNN's Properties are generally leased to tenants under long-term triple-net leases with initial lease terms of 10 to 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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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As of December 31, 2024, the weighted average remaining lease term of the Property Portfolio was approximately 10 years. The Properties are generally leased under triple-net leases, which require the tenant to pay all utilities and real estate taxes and assessments, to maintain the interior and exterior of the Property, and to carry property and liability insurance coverage.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeNNN's ability to conduct its business may be impaired if its information technology networks, systems or resources, including its websites or e-mail systems, are compromised, degraded, damaged or fail, whether due to a virus or other harmful circumstance, fraud, intentional penetration or disruption of its information technology resources by: • a third party, • natural disaster, • a failure of hardware or software due to a design or programmatic flaw, • a failure of hardware or software security controls, • telecommunications system failure, • service provider error or failure, • fraudulent transactions, • intentional or unintentional personnel actions, • lost connectivity to NNN's networked resources, • a failure of disaster recovery system, • denial of service attacks, • office intrusion due to office or building security failures, • data center cooling failure, • fire or other catastrophic damage to equipment or facilities, • water intrusion to equipment, • supply chain attacks, or • zero-day attacks.
Biggest changeNNN's ability to conduct its business may be impaired if its or its vendor's information technology networks, systems or resources, including websites or e-mail systems, are compromised, degraded, damaged or fail, whether due to a virus or other harmful circumstance, fraud, intentional penetration or disruption of such information technology resources.
NNN's inability to successfully acquire or develop new properties may affect NNN's ability to achieve anticipated return on investment or realize its investment strategy, which could have an adverse effect on its results of operations.
NNN's inability to successfully acquire or develop new properties may affect NNN's ability to achieve its anticipated return on investment or realize its investment strategy, which could have an adverse effect on its results of operations.
For example, it could: • require NNN to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing funds available for operations, real estate investments and other business opportunities that may arise in the future, • increase NNN's vulnerability to general adverse economic and industry conditions, • limit NNN's ability to obtain any additional financing it may need in the future for working capital, debt refinancing, capital expenditures, real estate investments, development or other general corporate purposes, • make it difficult to satisfy NNN's debt service requirements, • limit NNN's ability to pay dividends in cash on its outstanding stock, • limit NNN's flexibility in planning for, or reacting to, changes in its business and the factors that affect the profitability of its business, and • limit NNN's flexibility in conducting its business, which may place NNN at a disadvantage compared to competitors with less debt or debt with less restrictive terms.
For example, it could: • require NNN to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing funds available for operations, real estate investments and other business opportunities that may arise in the future, • increase NNN's vulnerability to general adverse economic and industry conditions, • limit NNN's ability to obtain any additional financing it may need in the future for working capital, debt refinancing, capital expenditures, real estate investments, development or other general corporate purposes, • make it difficult to satisfy NNN's debt service requirements, • limit NNN's ability to pay dividends in cash on its outstanding stock, 12 • limit NNN's flexibility in planning for, or reacting to, changes in its business and the factors that affect the profitability of its business, and • limit NNN's flexibility in conducting its business, which may place NNN at a disadvantage compared to competitors with less debt or debt with less restrictive terms.
In addition, payment of NNN's dividends depends upon NNN's earnings, financial condition, maintenance of NNN's REIT status and other factors as NNN's Board of Directors may deem relevant from time to time. Future issuances of NNN's equity securities could dilute the interest of NNN's common stockholders.
In addition, payment of NNN's dividends depends upon NNN's earnings, financial condition, maintenance of NNN's REIT status and other factors as NNN's Board of Directors may deem relevant from time to time. 13 Future issuances of NNN's equity securities could dilute the interest of NNN's common stockholders.
As a result, tenant bankruptcies may have a material adverse effect on NNN's results of operations and financial condition. Any of these events could adversely affect NNN's cash flow from operations.
As a result, tenant bankruptcies may have a material adverse effect on NNN's results of operations and financial condition. Any of these events could adversely affect NNN's cash flow and results of operations.
NNN is susceptible to the following real estate industry risks, which are beyond its control: • changes in national, regional and local economic conditions and outlook, • decreases in consumer spending and retail sales or adverse changes in consumer preferences for particular goods, services or store-based retailing, • economic downturns in the areas where the Properties are located, • adverse changes in local real estate market conditions, such as an oversupply of space, reduction in demand for space, loss of a large employer, intense competition for tenants, or a demographic change, • changes in tenant or consumer preferences that reduce the attractiveness of the Properties to tenants, • a decrease in demand for fossil fuels, • changes in zoning, regulatory restrictions, or tax laws, and • changes in interest rates or availability of financing.
NNN is susceptible to the following real estate industry risks, which are beyond its control: • changes in national, regional and local economic conditions and outlook, • decreases in consumer spending and retail sales or adverse changes in consumer preferences for particular goods, services or store-based retailing, • economic downturns in the areas where the Properties are located, • adverse changes in local real estate market conditions, such as an oversupply of space, reduction in demand for space, loss of a large employer, intense competition for tenants or a demographic change, • changes in tenant or consumer preferences that reduce the attractiveness of the Properties to tenants, • changes in zoning, regulatory restrictions or tax laws, and • changes in interest rates or availability of financing.
If NNN cannot provide reliable financial reports or prevent fraud, its business and operating results could be harmed, REIT qualification could be jeopardized, investors could lose confidence in the Company's reported financial information, the company's access to capital could be impaired, and the trading price of NNN's shares could drop significantly.
If NNN cannot provide reliable financial reports or prevent fraud, its business and operating results could be harmed, REIT qualification could be jeopardized, investors could lose confidence in the Company's reported financial information, the Company's access to capital could be impaired, and the trading price of shares of NNN's common stock could drop significantly.
From time to time the Financial Accounting Standards Board (“FASB”) and the Commission, who create and interpret appropriate accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of NNN's financial statements. These changes could have a material impact on NNN's reported financial condition and results of operations.
From time to time the Financial Accounting Standards Board ("FASB") and the Commission, who create and interpret appropriate accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of NNN's financial statements. These changes could have a material impact on NNN's reported financial condition and results of operations.
NNN intends to operate in a manner that will allow NNN to continue to qualify as a REIT. NNN believes it has been organized as, and its past and present operations qualify NNN as a REIT. However, the Internal Revenue Service (“IRS”) could successfully assert that NNN is not qualified as such.
NNN intends to operate in a manner that will allow NNN to continue to qualify as a REIT. NNN believes it has been organized as and its past and present operations qualify NNN as a REIT. However, the Internal Revenue Service ("IRS") could successfully assert that NNN is not qualified as such.
There can be no assurance that actions of the United States Government, the Federal Reserve or other government and regulatory bodies attempting to stabilize the economy or financial markets will achieve their intended effect.
There can be no assurance that actions of the United States ("U.S.") Government, the Federal Reserve or other government and regulatory bodies attempting to stabilize the economy or financial markets will achieve their intended effect.
While NNN's leases generally provide for recourse against the tenant in these instances, a bankrupt or financially troubled tenant may be more likely to defer maintenance and it may be more difficult to enforce remedies against such a tenant.
While NNN's leases typically provide for recourse against the tenant in these instances, a bankrupt or financially troubled tenant may be more likely to defer maintenance, and it may be more difficult to enforce remedies against such a tenant.
Mold and other bio-contaminants can produce airborne toxins, may cause a variety of health issues in individuals and must be remediated in accordance with applicable governmental laws, rules and regulations. 17 As part of its due diligence process, NNN generally obtains an environmental site assessment for each property it acquires.
Mold and other bio-contaminants can produce airborne toxins, may cause a variety of health issues in individuals and must be remediated in accordance with applicable governmental laws, rules and regulations. 15 As part of its due diligence process, NNN obtains an environmental site assessment for each property it acquires.
In addition, increased leverage could increase the risk that NNN may default on its debt obligations. The amount of outstanding debt at any time could have important consequences to NNN's stockholders.
In addition, increased leverage could increase the risk that NNN may default on its debt obligations. The amount of outstanding debt at any time could have important consequences for NNN's stockholders.
There are, however, types of losses (such as from hurricanes, floods, earthquakes or other types of natural disasters or wars, terrorism or other acts of violence) which may be uninsurable, self-insured by tenants, or the cost of insuring against these losses may not be economically justifiable in the opinion of tenants or NNN.
Although the Properties are generally insured, there are types of losses (such as from hurricanes, floods, earthquakes or other types of natural disasters or wars, terrorism or other acts of violence) which may be uninsurable, self-insured by tenants or the cost of insuring against these losses may not be economically justifiable in the opinion of tenants or NNN.
To maintain its status as a REIT for United States federal income tax purposes, NNN must meet certain requirements on an ongoing basis, including requirements regarding its sources of income, the nature and diversification of its assets, the amounts NNN distributes to its stockholders and the ownership of its shares.
To maintain its status as a REIT for U.S. federal income tax purposes, NNN must meet certain requirements on an ongoing basis, including requirements regarding its sources of income, the nature and diversification of its assets, the amounts NNN distributes to its stockholders and the ownership of its shares.
NNN may be subject to known or unknown environmental liabilities and risks, including but not limited to liabilities and risks resulting from the existence of hazardous materials on or under Properties owned by NNN. There may be known or unknown environmental liabilities associated with Properties owned or acquired in the future by NNN.
Risks Related to Governmental Laws and Regulations NNN may be subject to known or unknown environmental liabilities and risks, including but not limited to liabilities and risks resulting from the existence of hazardous materials on or under Properties owned by NNN. There may be known or unknown environmental liabilities associated with Properties owned or acquired in the future by NNN.
NNN's ability to pay dividends in the future is subject to many factors. NNN's ability to pay dividends may be impaired if any of the risks described in this section were to occur.
Risks Related to NNN's Common Stock NNN's ability to pay dividends in the future is subject to many factors. NNN's ability to pay dividends may be impaired if any of the risks described in this section were to occur.
This expansion of e-commerce could have an adverse impact on NNN's tenants' ongoing viability and the size, type and location of space tenants lease in the future. NNN cannot predict with certainty what tenants will want or what the impact will be on market rents.
This expansion of e-commerce could have an adverse impact on NNN's tenants' ongoing viability and the size, type and location of space tenants lease in the future. NNN cannot predict with certainty how tenant preferences will change or what the impact will be on market rents.
These factors, among others, include: • general economic and financial market conditions, • level and trend of interest rates, • changes in government fiscal, monetary, regulatory, or taxation policies, • NNN's ability to access the capital markets to raise additional capital, • the issuance of additional equity or debt securities, • changes in NNN's funds from operations or earnings estimates, • changes in NNN's debt ratings or analyst ratings, • NNN's financial condition and performance, • market perception of NNN compared to other REITs, and • market perception of REITs compared to other investment sectors.
These factors, among others, include: • level and trend of interest rates, • changes in government fiscal, monetary, regulatory or taxation policies, • NNN's ability to access the capital markets to raise additional capital, • the issuance of additional equity or debt securities, • changes in NNN's funds from operations or earnings estimates, • changes in NNN's debt ratings or analyst ratings, • NNN's financial condition and performance, • market perception of NNN compared to other REITs, • market perception of REITs compared to other investment sectors; and • the other risks described in this section. 19 Item 1B.
Additionally, NNN cannot ensure that its Property Portfolio will expand at all, or if it will expand at any specified rate or to any specified size. In addition, investment in additional real estate assets is subject to a number of risks.
NNN may not be able to implement its investment strategies successfully. Additionally, NNN cannot ensure that its Property Portfolio will expand at all, or if it will expand at any specified rate or to any specified size. In addition, investment in additional real estate assets is subject to a number of risks.
Risks Related to NNN's Business and Operations Changes in financial and economic conditions, including inflation, may have an adverse impact on NNN, its tenants, and commercial real estate in general.
Risks Related to NNN's Business and Operations Changes in financial and economic conditions, including inflation and tariffs, may have an adverse impact on NNN and its tenants.
This “Risk Factors” section contains references to NNN's “stockholders.” Unless expressly stated otherwise, the references represent NNN's common stock and any class or series of preferred stock which may be outstanding from time to time.
This "Risk Factors" section contains references to NNN's "stockholders". Unless expressly stated otherwise, the references represent NNN's common stock and any class or series of preferred stock which may be outstanding from time to time.
As of December 31, 2024, NNN had outstanding debt, including total unsecured notes payable of $4,373,803,000 and no outstanding balance on the Credit Facility. NNN's organizational documents do not limit the level or amount of debt that it may incur.
As of December 31, 2025, NNN had outstanding debt, including total unsecured notes payable of $4,472,324,000, $348,100,000 outstanding on the Credit Facility and no outstanding balance on the Term Loan. NNN's organizational documents do not limit the level or amount of debt that it may incur.
As of December 31, 2024, approximately, • 57.3% of the Property Portfolio annual base rent is generated from tenants in five retail lines of trade: convenience stores (17.0%), automotive service (16.9%), full-service and limited-service restaurants (16.2%) and family entertainment centers (7.2%), • 19.0% of the Property Portfolio annual base rent is generated from five tenants: 7-Eleven (4.5%), Mister Car Wash (4.1%), Dave & Buster's (3.8%), Camping World (3.8%) and GPM Investments (convenience stores) (2.8%), and • 41.3% of the Property Portfolio annual base rent is generated from properties located in five states: Texas (18.8%), Florida (8.7%), Illinois (5.1%), Georgia (4.5%) and Ohio (4.2%).
As of December 31, 2025, approximately, • 63.0% of the Property Portfolio annual base rent is generated from tenants in six lines of trade: automotive service (18.6%), convenience stores (16.3%), restaurants (including full and limited service) (14.3%), entertainment (7.2%) and dealerships (6.6%), and • 17.8% of the Property Portfolio annual base rent is generated from five tenants: 7-Eleven (4.3%), Mister Car Wash (3.8%), Dave & Buster's (3.6%), Camping World (3.5%) and Kent Distributors (2.6%), and • 40.9% of the Property Portfolio annual base rent is generated from properties located in five states: Texas (18.4%), Florida (8.7%), Illinois (5.1%), Georgia (4.5%) and Ohio (4.2%).
A natural disaster or impacts of weather or other event resulting in an uninsured loss may adversely affect the operations of NNN's tenants and therefore the ability of NNN's tenants to pay rent, NNN's operating results and asset values of NNN's Property Portfolio. The impacts of a natural disaster or weather event on NNN's Property Portfolio are highly uncertain.
Climate change, natural disasters and impacts of weather may adversely affect the operations of NNN's tenants and their ability to pay rent, NNN's operating results and asset values of NNN's Property Portfolio. The impacts of climate change, a natural disaster or a weather event on NNN's Property Portfolio are highly uncertain.
If an uninsured loss occurs or a loss exceeds policy limits, NNN could lose both its invested capital and anticipated revenues from the Property, thereby reducing NNN's cash flow and asset value. NNN's ability to fully control the management of its net-leased Properties may be limited.
If an uninsured loss occurs or a loss exceeds policy limits, NNN could lose both its invested capital and anticipated revenues from the Property, thereby reducing NNN's cash flow and asset value.
Compliance with new laws or regulations, or stricter interpretation of existing laws, may require NNN, its tenants, or consumers to incur significant expenditures, impose significant liability, restrict or prohibit business activities and could cause a material adverse effect on NNN's results of operation. 19 Non-compliance with Title III of the Americans with Disabilities Act of 1990 and similar state and local laws could have an adverse effect on NNN's business and operating results.
Compliance with new laws or regulations, or stricter interpretation of existing laws, may require NNN, its tenants or consumers to incur significant expenditures, impose significant liability, restrict or prohibit business activities and could cause a material adverse effect on NNN's results of operation.
The tenants of net-leased Properties are responsible for maintenance and other day-to-day management of the Properties. If a Property is not adequately maintained in accordance with the terms of the applicable lease, NNN may incur expenses for deferred maintenance expenditures or other liabilities when the lease expires.
In addition, NNN's tenants are responsible for maintenance and other day-to-day management of the Properties. If a Property is not adequately maintained in accordance with the terms of the applicable lease, NNN may incur significant and unexpected deferred maintenance or other expenses to remediate any resulting damage to the Property.
Furthermore, NNN may have strict liability to governmental agencies or third parties as a result of the existence of hazardous materials on Properties, whether or not NNN knew about or caused such hazardous materials to exist. As of January 31, 2025, NNN had 66 Properties currently under some level of environmental remediation and/or monitoring.
Furthermore, NNN may have strict liability to governmental agencies or third parties as a result of the existence of hazardous materials on Properties, whether or not NNN knew about or caused such hazardous materials to exist.
If NNN expands its operating strategy to include investment in international markets, NNN could face additional risks, including foreign currency exchange rate fluctuations, operational risks due to local economic and political conditions and laws and policies of the United States affecting foreign investment. NNN may suffer a loss in the event of a default or bankruptcy of a borrower.
Investments in international markets could subject NNN to additional risks. If NNN expands its operating strategy to include investment in international markets, NNN could face additional risks, including foreign currency exchange rate fluctuations, operational risks due to local economic and political conditions and laws and policies of the U.S. or host country affecting foreign investment.
Additionally, some of these actions may adversely affect financial institutions, capital providers, retailers, consumers, NNN's financial condition, NNN's results of operations or the trading price of NNN's shares.
Additionally, some of these actions may adversely affect financial institutions, capital providers, retailers, consumers, NNN's financial condition, NNN's results of operations or the trading price of NNN's shares. 7 Owning real estate and indirect interests in real estate carries inherent risks.
The Properties, as commercial facilities, are required to comply with the ADA. NNN's tenants will typically have primary responsibility for complying with the ADA, but NNN may incur costs if the tenant does not comply.
Under most leases, NNN's tenants will have primary responsibility for complying with the ADA, but NNN may incur costs if the tenant does not comply.
Because NNN expects to invest in markets other than the ones in which its current Properties are located or properties which may be leased to tenants other than those to which NNN has historically leased properties, NNN will also be subject to the risks associated with investment in new markets, new lines of trade or with new tenants that may be relatively unfamiliar to NNN's management team.
Because NNN may invest in markets other than the ones in which its current Properties are located or properties which may be leased to tenants other than those to which NNN has historically leased Properties, NNN will also be subject to the risks associated with investment in new markets, new lines of trade or with new tenants that may be relatively unfamiliar to NNN's management team. 9 NNN's real estate investments are generally illiquid, which could significantly impede its ability to respond to market conditions or adverse changes in the performance of its tenants or its Properties and which would harm NNN’s financial condition.
In addition, the costs of maintaining adequate protection against data security threats, based on considerations of their evolution, increasing sophistication, pervasiveness and frequency and/or government-mandated standards or obligations regarding protective efforts, could be material to NNN's financial position, results of operations, cash flows, and the market price of NNN's common stock in a particular period or over various periods. 13 NNN relies upon cloud computing services to operate certain aspects of its business and any disruption could have an adverse effect on its financial condition and results of operations.
In addition, the costs of maintaining adequate protection against data security threats, based on considerations of their evolution, increasing sophistication, pervasiveness and frequency and/or government-mandated standards or obligations regarding protective efforts, could be material to NNN's financial position, results of operations, cash flows and the market price of NNN's common stock in a particular period or over various periods. 17 The use of AI presents risks and challenges that may adversely impact NNN's business and operating results or that of its tenants.
The occurrence of a tenant bankruptcy or insolvency could diminish or eliminate the income NNN receives from its tenant. A bankruptcy court might authorize a tenant to terminate one or more of its leases with NNN.
As a result, vacancies reduce NNN's revenues, increase property expenses and could decrease the value of each vacant Property. The occurrence of a tenant bankruptcy or insolvency could diminish or eliminate the income NNN receives from its tenant. A bankruptcy court might authorize a tenant to terminate one or more of its leases with NNN.
Financial and economic conditions can be challenging and volatile and any worsening of such conditions, including any disruption in the capital markets, or an inflationary economic environment, both real or anticipated, could adversely affect NNN's business and results of operations.
Financial and economic conditions can be challenging and volatile and any worsening of such conditions, including any disruption in the capital markets, lower levels of liquidity, fluctuating interest rates and inflation, tariffs, increases in the rate of default and bankruptcy or lower consumer and business spending, both real or anticipated, could adversely affect NNN's business and results of operations.
As of December 31, 2024, NNN held mortgages receivable of $454,000, which represented less than one percent of total assets. If a borrower defaults on a mortgage or other loan made by NNN, and does not have sufficient assets to satisfy the loan, NNN may suffer a loss of principal and interest.
If a borrower defaults on a mortgage or other loan made by NNN, and does not have sufficient assets to satisfy the loan, NNN may suffer a loss of principal and interest.
If NNN fails to maintain the adequacy of its internal control over financial reporting, as such standards may be modified, supplemented or amended from time to time, NNN may not be able to ensure that it can conclude on an ongoing basis that it has effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.
If NNN fails to maintain the adequacy of its internal control over financial reporting, NNN may not be able to ensure that it can conclude on an ongoing basis that it has effective internal control over financial reporting.
Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for NNN to qualify, or desirable to continue, as a REIT or avoid significant tax liability.
Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for NNN to qualify, or desirable to continue, as a REIT or avoid significant tax liability. 14 If NNN fails to qualify as a REIT, it would not be allowed a deduction for dividends paid to stockholders in computing taxable income and would become subject to federal income tax at regular corporate rates.
Bankruptcy proceedings and litigation can significantly increase the time needed for NNN to acquire underlying collateral, if any, in the event of a default, during which time the collateral may decline in value. In addition, there are significant costs and delays associated with the foreclosure process. Property ownership through joint ventures and partnerships could limit NNN's control of those investments.
Bankruptcy proceedings and litigation can significantly increase the time before NNN can acquire underlying collateral, if any, in the event of a default, during which time the collateral may decline in value. In addition, there are significant costs and delays associated with the foreclosure process. As of December 31, 2025, NNN held no mortgages receivable.
Any increase of these taxes would decrease earnings and cash available for distribution to stockholders. In addition, in order to meet certain REIT qualification requirements, NNN may elect to own some of its assets in a TRS. Adverse legislative or regulatory tax changes could reduce NNN's earnings and cash flow and the market value of NNN's securities.
Any increase in these taxes would decrease earnings and cash available for distribution to stockholders. In addition, in order to meet certain REIT qualification requirements, NNN may elect to own some of its assets in a TRS which would be subject to federal, state and local taxes on its income.
Accordingly, NNN may be unable to anticipate these techniques or to implement adequate security barriers, disaster recovery or other preventative or corrective measures, and thus it is impossible for NNN to entirely counteract this risk or fully mitigate the harms after such an attack. 12 NNN has implemented systems and processes intended to address ongoing and evolving cybersecurity risks, secure its information technology, applications and computer systems, and prevent unauthorized access to or loss of sensitive, confidential and personal data.
Accordingly, NNN may be unable to anticipate these techniques or to implement adequate security barriers, disaster recovery or other preventative or corrective measures, and thus it is impossible for NNN to entirely counteract this risk or fully mitigate the harm after such an attack.
Upon the expiration of a lease, the tenant may choose not to renew the lease and NNN may not be able to re-lease the vacant Property at a comparable lease rate. Furthermore, NNN may incur additional expenditures in connection with such renewal or re-leasing.
The default or failure to renew leases by one or more of NNN's tenants could cause substantial vacancies in the Property Portfolio. NNN may not be able to re-lease the vacant Property at a comparable lease rate. Furthermore, NNN may incur additional expenditures in connection with re-leasing the Property.
Unless entitled to relief under certain statutory provisions, NNN would also be disqualified from treatment as a REIT for the four taxable years following the year during which the qualification was lost. 18 Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and may negatively affect NNN's operating decisions.
In this event, NNN could be subject to potentially significant tax liabilities and penalties. Unless entitled to relief under certain statutory provisions, NNN would also be disqualified from treatment as a REIT for the four taxable years following the year during which the qualification was lost.
These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for NNN's common stock or otherwise be in the best interest of NNN's stockholders. Risks Related to – Governmental Laws and Regulations Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations.
These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for NNN's common stock or otherwise be in the best interest of NNN's stockholders. Risks Related to Tax Matters NNN's failure to qualify as a REIT for federal income tax purposes could result in significant tax liability.
A significant portion of the source of the Property Portfolio annual base rent is concentrated in specific industry classifications, tenants and geographic locations.
As of December 31, 2025, NNN did not have any tenants in bankruptcy that would result in material losses in NNN’s income. 8 A significant portion of the source of the Property Portfolio annual base rent is concentrated in specific industry classifications, tenants and geographic locations.
Any of these occurrences could have an adverse impact on NNN's financial condition or results of operations. 21 Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial performance. Accounting policies and methods are fundamental to how NNN records and reports its financial condition and results of operations.
Any of these occurrences could have a significant adverse impact on NNN's operating results. Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial performance.
However, the policy is subject to exclusions and limitations and does not cover all of the Properties owned by NNN. For those Properties covered under the policy, insurance may not fully compensate NNN for any environmental liability. NNN has no assurance that the insurer on its environmental insurance policy will be able to meet its obligations under the policy.
However, the policy is subject to exclusions and limitations and does not cover all of the Properties owned by NNN. For those Properties covered under the policy, insurance may not fully compensate NNN for any environmental liability. Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations.
NNN may be unable to obtain capital on favorable terms, if at all, to further its business objectives or meet its existing obligations. Nearly all of NNN's debt, including the Credit Facility, is subject to balloon principal payments due at maturity. These maturities range from 2025 to 2052.
Nearly all of NNN's debt, including the Credit Facility, is subject to balloon principal payments due at maturity. These maturities range from 2026 to 2052.
Cybersecurity risks and cyber incidents as well as other significant disruptions of NNN's information technology networks and related systems and resources, or those of NNN's vendors or other third-parties, could adversely affect NNN's business, disrupt operations and expose NNN to liabilities to tenants, associates, capital providers, governmental regulators and other third parties.
As of January 30, 2026, NNN had not been notified by any governmental authority of, nor is NNN's management aware of, any non-compliance with the ADA that NNN's management believes would have a material adverse effect on its business, financial position or results of operations. 16 General Risks Cybersecurity risks and cyber incidents as well as other significant disruptions of NNN's information technology networks and related systems and resources, or those of NNN's vendors or other third-parties, could adversely affect NNN's business, disrupt operations and expose NNN to liabilities to tenants, associates, capital providers, governmental regulators and other third parties.
NNN generally will not be subject to federal income taxes on taxable income it distributes to stockholders, providing it meets certain other requirements for qualifying as a REIT. For each of the years in the three-year period ended December 31, 2024, NNN believes it has qualified as a REIT.
NNN generally will not be subject to federal income taxes on taxable income it distributes to stockholders, provided it meets certain other requirements for qualifying as a REIT. NNN believes it has been organized as and its past and present operations qualify NNN as a REIT.
Competition for senior management personnel can be intense and NNN may not be able to retain its key management. Although NNN believes qualified replacements could be found for any departures of key management, the loss of their services could adversely affect NNN's performance and the value of its securities.
Although NNN believes qualified replacements could be found for any departures of key management, the loss of their services could adversely affect NNN's performance and the value of its securities. NNN's failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results and the market value of NNN's securities.
More generally, any of these events or threats of these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economies. They also could result in, or cause a deepening of, economic recession in the United States or abroad.
If events like these were to occur, they could materially interrupt NNN's business operations, cause consumer confidence and spending to decrease or result in increased volatility in the U.S. and worldwide financial markets and economy. They also could result in or prolong an economic recession in the U.S. or abroad.
In some cases, NNN could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements. Similarly, these changes could have a material impact on NNN's tenants' reported financial condition or results of operations and affect their preferences regarding leasing real estate.
In some cases, NNN could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements.
Even if NNN remains qualified as a REIT, NNN faces other tax liabilities that reduce operating results and cash flow.
Notwithstanding NNN's qualification for taxation as a REIT, NNN is subject to certain state and local income, franchise and excise taxes. Even if NNN remains qualified as a REIT, NNN may face other tax liabilities that could reduce operating results and cash flow.
The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility.
Similarly, these changes could have a material impact on NNN's tenants' reported financial condition or results of operations and affect their preferences regarding leasing real estate. 18 The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility.
Notwithstanding NNN's qualification for taxation as a REIT, NNN is subject to certain state and local income, franchise and excise taxes. The share ownership restrictions of the Code for REITs and the 9.8% share ownership limit in NNN's charter may inhibit market activity in NNN's shares of stock and restrict NNN's business combination opportunities.
The interests of NNN's common stockholders could also be diluted by the issuance of shares of common stock pursuant to NNN's performance incentive plan. The share ownership restrictions of the Code for REITs and the 9.8% share ownership limit in NNN's charter may inhibit market activity in NNN's shares of stock and restrict NNN's business combination opportunities.
NNN could be adversely impacted if this were to happen with respect to an asset or group of assets. Competition from numerous other REITs, commercial developers, real estate limited partnerships and other investors or a lack of properties for sale may impede NNN's ability to grow.
Therefore, NNN may not be able to vary its Property Portfolio in response to economic or other conditions promptly or on favorable terms. Competition from other REITs, commercial developers, real estate entities and other investors or a lack of properties for sale may impede NNN's ability to grow.
Further, disputes may develop with a co-venturer or partner over decisions affecting the property, joint venture or partnership that may result in litigation, arbitration or some other form of dispute resolution. 14 Risks Related to Financing NNN's Business NNN may be unable to obtain debt or equity capital on favorable terms, if at all.
Risks Related to Financing NNN's Business NNN may be unable to obtain debt or equity capital on favorable terms, if at all. NNN may be unable to obtain capital on favorable terms, if at all, to further its business objectives or meet its existing obligations.
Any financial hardship and/or economic changes in these lines of trade, tenants or states could have an adverse effect on NNN's results of operations. NNN may not be able to successfully execute its acquisition or development strategies. NNN may not be able to implement its investment strategies successfully.
Any financial hardship and/or economic changes in these lines of trade, tenants or states could have an adverse effect on NNN's results of operations. NNN’s business is significantly dependent on single-tenant properties. NNN's strategy focuses on investing in single-tenant, commercial real estate subject to long-term net leases across the U.S.
All of these factors could result in decreases in market rental rates and increases in vacancy rates, which could adversely affect NNN's results of operations. NNN's real estate investments are illiquid. Because real estate investments are relatively illiquid, NNN's ability to adjust the Property Portfolio promptly in response to economic or other conditions is limited.
All of these factors could result in decreases in market rental rates and increases in vacancy rates, which could adversely affect NNN's results of operations. NNN's business is dependent upon its tenants successfully operating their businesses and their failure to do so could materially and adversely affect NNN's cash flow and results of operations.
NNN cannot assure stockholders that any such refinancing, sale of assets or additional financing would be possible or, if possible, on terms and conditions, including but not limited to the interest rate, which NNN would find acceptable or would not result in a material decline in earnings. 15 NNN is obligated to comply with financial and other covenants in its debt instruments that could restrict its operating activities, and the failure to comply with such covenants could result in defaults that accelerate the payment of such debt.
NNN is obligated to comply with financial and other covenants in its debt instruments that could restrict its operating activities, and the failure to comply with such covenants could result in defaults that accelerate the payment of such debt. As of December 31, 2025, NNN had approximately $4,820,424,000 of outstanding debt, none of which was secured debt.
General Risks NNN's loss of key management personnel could adversely affect performance and the value of its securities. NNN is dependent on the efforts of its key management. As of January 31, 2025, the executive team and senior managers average over 20 years of experience with NNN.
As of January 30, 2026, the executive team and senior managers average over 19 years of experience with NNN. Competition for senior management personnel can be intense and NNN may not be able to retain its key management.
While NNN believes such claims would be without merit it has no assurances on how courts would rule on such claims, if any. Acts of violence, terrorist attacks or war may affect NNN's Properties, the markets in which NNN operates and NNN's results of operations. Terrorist attacks or other domestic acts of violence may negatively affect NNN's operations.
Terrorist attacks, other acts of violence, war, pandemics or other unexpected events may affect the markets in which NNN operates and its results of operations. There can be no assurance that unexpected events will not occur or have a direct impact on NNN's tenants, its business or the U.S. or world generally.
Removed
Potential consequences of challenging and volatile financial and economic conditions include: • the financial condition of NNN's tenants may be adversely affected, which may result in tenant defaults under the leases due to bankruptcy, lack of liquidity, operational failures or for other reasons, • the ability to raise equity capital or borrow on terms and conditions that NNN finds acceptable may be limited or unavailable, which could reduce NNN's ability to pursue acquisition and development opportunities and refinance existing debt, reduce NNN's returns from acquisition and development activities, reduce NNN's ability to make cash distributions to its stockholders and increase NNN's future interest expense, • the recognition of impairment charges on or reduced values of the Properties or tenant receivables, may adversely affect NNN's results of operations, • reduced values of the Properties may limit NNN's ability to dispose of assets at attractive prices and reduce the availability of buyer financing, and • the value and liquidity of NNN's short-term investments and cash deposits could be reduced as a result of (i) a deterioration of the financial condition of the institutions that hold NNN's cash deposits or the institutions or assets in which NNN has made short-term investments, (ii) the dislocation of the markets for NNN's short-term investments, (iii) increased volatility in market rates for such investments or (iv) other factors. 9 Loss of rent from tenants would reduce NNN's cash flow.
Added
The financial failure of, or default in payment by, a single-tenant under its lease is likely to cause a significant or complete reduction in NNN's rental revenue from that Property and a reduction in the value of the Property. NNN may also experience difficulty or a significant delay in re-leasing or selling the Property.
Removed
The default, financial distress, bankruptcy or liquidation of one or more of NNN's tenants could cause substantial vacancies in the Property Portfolio. Vacancies reduce NNN's revenues, increase property expenses and could decrease the value of each vacant Property.
Added
This risk will be magnified if NNN decides to lease multiple Properties to a single-tenant under a master lease. A tenant failure or default under a master lease could reduce or eliminate rental revenue from multiple Properties and reduce the value of the Properties.
Removed
NNN's development activities are subject to, without limitation, risks relating to the availability and timely receipt of zoning and other regulatory approvals, the cost and timely completion of construction (including risks from factors beyond NNN's control, such as weather, labor conditions or material shortages), the risk of finding tenants for the properties and the ability to obtain both construction and permanent financing on favorable terms.
Added
In addition, NNN would be responsible for all of the operating costs of a Property following a vacancy of a single-tenant building. Because Properties have been built to suit a particular tenant's specific needs, NNN may also incur significant costs to make the Property ready for another tenant.
Removed
These risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of development activities once undertaken or provide a tenant the opportunity to delay rent commencement, reduce rent or terminate a lease.
Added
Furthermore, the failure by any tenant to adequately maintain a Property could adversely affect NNN's ability to timely re-lease the Property to a new tenant or otherwise monetize its investment in the Property if it is forced to make significant repairs or changes to the Property as a result of the tenant's neglect.
Removed
Any of these situations may delay or eliminate proceeds or cash flows NNN expects from these projects, which could have an adverse effect on NNN's financial condition. 10 NNN may not be able to dispose of Properties consistent with its operating strategy.
Added
If NNN incurs significant additional expenses or is delayed in being able to pursue returns on its real estate investments, it may have a materially adverse effect on NNN's ability to operate, grow its business and achieve its strategic objectives. NNN may not be able to successfully execute its acquisition strategies.
Removed
NNN may be unable to sell Properties targeted for disposition under favorable terms due to adverse market conditions or possible prohibitive tax liability. This may adversely affect, among other things, NNN's ability to sell under favorable terms, execute its operating strategy, achieve target earnings or returns, retire or repay debt or pay dividends.
Added
NNN's investments are relatively difficult to sell quickly. As a result of this illiquidity, NNN's ability to promptly sell one or more Properties in response to changing economic, financial or investment conditions is limited. Return of capital and realization of gains, if any, from an investment typically will occur upon disposition or refinancing of the underlying Property.
Removed
Certain provisions of NNN's leases or loan agreements may be unenforceable. NNN's rights and obligations with respect to its leases and loans are governed by written agreements.
Added
NNN may be unable to realize its investment objective by sale, other disposition or refinancing at attractive prices within any given period of time or may otherwise be unable to complete any exit strategy.
Removed
A court could determine that one or more provisions of such an agreement are unenforceable, such as a particular remedy, a master lease covenant, a loan prepayment provision or a provision governing NNN's security interest in the underlying collateral of a borrower or lessee.
Added
In particular, these risks could arise from weakness in or even the lack of an established market for a Property, changes adversely affecting the tenant of a Property, changes adversely affecting the area in which a particular Property is located, adverse changes in the financial condition or prospects of prospective purchasers and changes in local, national or international economic conditions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeBelow are examples of actions NNN takes to protect NNN's information systems and data from cybersecurity risk : • Align systems and processes with best practices, including the National Institute of Standards and Technology Cybersecurity Framework, for securing NNN information systems and data; • Perform continuous systems monitoring and tactical measures for impending viruses, malware, tampering, exploits and other cyber threats; • Deploy systems tools to detect, prevent and neutralize cyber threats; • Engage independent third-party consultants to assist in evaluating cybersecurity risks and response profile and plans; • Identify, oversee and evaluate the risks associated with third-party service providers and consultants; • Continuously educate and provide procedural training to all associates and the Board of Directors regarding cybersecurity awareness and risks such as enterprise security, malware, data protection best practices, anti-phishing exercises and updates with respect to other implemented information security measures; • Periodically measure the effectiveness of associate training; • Cybersecurity risk management is periodically reviewed with NNN's Enterprise Risk Management Team; • Perform ongoing internal and external penetration testing and vulnerability assessments with a high priority for timely remediation; and • Establish reporting deadlines and hierarchies so that data regarding an incident or possible incident is communicated in a timely manner to NNN's management, to the Audit Committee of the Board of Directors, and if, appropriate or required by law, to the Commission. 23 Management is aware that preventive measures cannot prevent all cyber incidents.
Biggest changeBelow are examples of actions NNN takes to protect NNN's information systems and data from cybersecurity risk : • Align systems and processes with best practices, including the National Institute of Standards and Technology Cybersecurity Framework, for securing NNN information systems and data; • Perform continuous systems monitoring and tactical measures for impending viruses, malware, tampering, exploits and other cyber threats; • Deploy systems tools to detect, prevent and neutralize cyber threats; • Engage independent third-party consultants to assist in evaluating cybersecurity risks and response profile and plans; • Identify, oversee and evaluate the risks associated with third-party service providers and consultants; • Continuously educate and provide procedural training to all associates and the Board of Directors regarding cybersecurity awareness and risks such as enterprise security, malware, data protection best practices, anti-phishing exercises and updates with respect to other implemented information security measures; • Periodically measure the effectiveness of associate training; • Cybersecurity risk management is periodically reviewed with NNN's ERMT; • Perform ongoing internal and external penetration testing and vulnerability assessments with a high priority for timely remediation; and 20 • Establish reporting deadlines and hierarchies so that data regarding an incident or possible incident is communicated in a timely manner to NNN's management, to the Audit Committee of the Board of Directors and, if appropriate or required by law, to the Commission.
The Chief Accounting and Technology Officer (the "CATO") oversees NNN's security programs and its Incident Response Policy and Plan and provides direct oversight and guidance to the technology team that manages NNN's day-to-day technology and cybersecurity operations.
The Chief Accounting Officer and Chief Technology Officer (the "CATO") oversees NNN's security programs and its Incident Response Policy and Plan and provides direct oversight and guidance to the technology team that manages NNN's day-to-day technology and cybersecurity operations.
When a cyber incident occurs, NNN's actions are guided by an incident response plan decision tree to (i) detect, contain and eradicate any threats, (ii) assess materiality, (iii) notify internal parties and the Audit Committee Chairperson, (iv) recover any compromised NNN data and information systems, (v) limit impacts of any such incident on NNN's operations, and (vi) report any such incident as require by law or as otherwise necessary.
When a cyber incident occurs, NNN's actions are guided by an incident response plan decision tree to (i) detect, contain and eradicate any threats, (ii) assess materiality, (iii) notify internal parties and the Audit Committee Chairperson, (iv) recover any compromised NNN data and information systems, (v) limit impacts of any such incident on NNN's operations, and (vi) report any such incident as required by law or as otherwise necessary.
Item 1C. C ybersecurity With oversight from the Board of Directors, NNN's management is responsible for managing all cyber risks and overseeing NNN's security programs. Primary cybersecurity risk oversight has been delegated to the Audit Committee.
Item 1C. C ybersecurity Cybersecurity Governance Board Oversight and Management's Role. With oversight from the Board of Directors, NNN's management is responsible for managing all cyber risks and overseeing NNN's security programs. Primary cybersecurity risk oversight has been delegated to the Audit Committee.
NNN's cybersecurity risk profile and cybersecurity program status, including results of any third-party evaluations are reported to the Audit Committee by the CATO . NNN's information systems process and store critical and sensitive NNN data.
The CATO periodically reports to the Audit Committee information including NNN's cybersecurity risk profile and cybersecurity program status, including results of any third-party evaluations . Risk Management and Strategy NNN's information systems process and store critical and sensitive NNN data.
For a detailed discussion of risks from cybersecurity threats, please see “Item 1A. Risk Factors.”
For a detailed discussion of risks from cybersecurity incidents as well as other significant disruptions, please see "Item 1A. Risk Factors."
The CATO has direct oversight over the Company's security programs on a daily basis.
Management is aware that preventive measures cannot prevent all cyber incidents. The CATO has direct oversight over the Company's security programs on a daily basis.
Removed
The CATO has been with NNN for over 25 years and has overseen NNN's information systems, including its cyber risk management program, for the last 15 years.
Added
In addition, NNN’s technology team is supported by a cybersecurity monitoring service to help identify, assess and manage the Company’s cybersecurity threats and risks by monitoring and evaluating NNN’s threat environment using a variety of methods, NNN’s Enterprise Risk Management Team (“ERMT”), comprised of NNN’s management, reviews and collaborates periodically on material risks from cybersecurity threats.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings In the ordinary course of its business, NNN is a party to various legal actions that management believes are routine in nature and incidental to the operation of the business of NNN. Management does not believe that any of these proceedings are material. Item 4. Mine Safe ty Disclosures None. 24 PAR T II
Biggest changeItem 3. Legal Proceedings In the ordinary course of its business, NNN is a party to various legal actions that management believes are routine in nature and incidental to the operation of the business of NNN. Management does not believe that any of these proceedings are material. Item 4. Mine Safe ty Disclosures None. 21 PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The common stock of NNN currently is traded on the NYSE under the symbol “NNN.” Performance Graphs Set forth below is a line graph comparing the cumulative total stockholder return on NNN's common stock, based on the market price of the common stock and assuming reinvestment of dividends, with the FTSE National Association of Real Estate Investment Trusts Equity Index (“FNER”) and the S&P 500 Index (“S&P 500”) for the five-year period commencing December 31, 2019 and ending December 31, 2024.
Biggest changeMarket for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The common stock of NNN currently is traded on the NYSE under the symbol "NNN." Performance Graphs Set forth below is a line graph comparing the cumulative total stockholder return on NNN's common stock, based on the market price of the common stock and assuming reinvestment of dividends, with the S&P 500 Index ("S&P 500") and the FTSE Nareit All Equity REITs Index ("FNER") for the five-year period commencing December 31, 2020 and ending December 31, 2025.
Many of NNN's shares of common stock are held by brokers and institutions on behalf of stockholders, NNN is unable to estimate the total number of stockholders represented by these record holders. 26 Securities Authorized for Issuance Under Equity Compensation Plans None. Sale of Unregistered Securities None. Issuer Purchases of Equity Securities None. Item 6. [Reserved] 27
Many of NNN's shares of common stock are held by brokers and institutions on behalf of stockholders, NNN is unable to estimate the total number of stockholders represented by these record holders. 23 Securities Authorized for Issuance Under Equity Compensation Plans None. Sale of Unregistered Securities None. Issuer Purchases of Equity Securities None. Item 6. [Reserved] 24
Comparison to Five-Year Cumulative Total Return 25 Set forth below is a line graph comparing the cumulative total stockholder return on NNN's common stock, based on the market price of the common stock and assuming reinvestment of dividends, with the FNER and the S&P 500 for the twenty-five-year period commencing December 31, 1999 and ending December 31, 2024.
Comparison to Five-Year Cumulative Total Return 22 Set forth below is a line graph comparing the cumulative total stockholder return on NNN's common stock, based on the market price of the common stock and assuming reinvestment of dividends, with the S&P 500 and the FNER for the twenty-five-year period commencing December 31, 2000 and ending December 31, 2025.
The graph assumes an investment of $100 on December 31, 2019.
The graph assumes an investment of $100 on December 31, 2020.
The graph assumes an investment of $100 on December 31, 1999.
The graph assumes an investment of $100 on December 31, 2000.
In January 2025, NNN declared dividends payable to its stockholders of $108,335,000, or $0.580 per share, of common stock. Holders On January 31, 2025, there were 1,425 registered holders of record of NNN's common stock.
In January 2026, NNN declared dividends payable to its stockholders of $113,502,000, or $0.600 per share, of common stock. Holders On January 30, 2026, there were 1,364 registered holders of record of NNN's common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table summarizes the lease expirations, assuming none of the tenants exercise renewal options, of the Property Portfolio for each of the next 10 years and then thereafter in the aggregate as of December 31, 2024: % of Annual Base Rent (1) # of Properties Gross Leasable Area (2) % of Annual Base Rent (1) # of Properties Gross Leasable Area (2) 2025 3.2% 132 874,000 2031 7.0% 184 2,655,000 2026 4.2% 204 1,981,000 2032 5.1% 183 1,804,000 2027 7.6% 231 3,401,000 2033 4.6% 134 1,398,000 2028 5.8% 255 2,306,000 2034 5.8% 182 2,398,000 2029 4.6% 143 2,083,000 Thereafter 47.7% 1,711 14,840,000 2030 4.4% 154 2,086,000 (1) Based on the annualized base rent for all leases in place as of December 31, 2024.
Biggest changeThe following table summarizes the lease expirations, assuming none of the tenants exercise renewal options, of the Property Portfolio for each of the next 10 years and then thereafter in the aggregate as of December 31, 2025: # of Properties Gross Leasable Area (1) % of ABR # of Properties Gross Leasable Area (1) % of ABR 2026 117 1,019,000 2.1% 2032 188 1,840,000 4.9% 2027 203 2,714,000 6.3% 2033 134 1,401,000 4.3% 2028 221 1,970,000 4.9% 2034 194 2,838,000 5.9% 2029 137 2,043,000 4.2% 2035 135 1,794,000 4.2% 2030 184 2,417,000 4.7% Thereafter 1,853 17,833,000 50.6% 2031 261 3,086,000 7.9% (1) Square feet. 28 The following table summarizes the diversification of the Property Portfolio for the top 20 lines of trade as a percentage of ABR as of December 31: Lines of Trade 2025 2024 1.
Rental revenues for properties under construction commence upon completion of construction of the leased asset and delivery of the leased asset to the tenant. Rental revenues for non-development real estate assets are recognized when earned in accordance with ASC 842, based on the terms of the lease of the leased asset.
Rental revenues for properties under construction commence upon completion of construction and delivery of the leased asset to the tenant. Rental revenues for non-development real estate assets are recognized when earned in accordance with ASC 842, based on the terms of the lease of the leased asset.
Risk Factors." Liquidity and Capital Resources NNN's demand for funds has been and will continue to be primarily for (i) payment of operating expenses and dividends, (ii) property acquisitions and construction commitments, (iii) capital expenditures, (iv) payment of principal and interest on its outstanding debt, and (v) other investments. Financing Strategy.
Risk Factors." Liquidity and Capital Resources NNN's demand for funds has been and will continue to be for (i) payment of operating expenses and dividends, (ii) property acquisitions and construction commitments, (iii) capital expenditures, (iv) payment of principal and interest on its outstanding debt, and (v) other investments. Financing Strategy.
Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis. 29 Collectability . In accordance with ASC 842, NNN reviews the collectability of its lease payments on an ongoing basis.
Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis. Collectability . In accordance with ASC 842, NNN reviews the collectability of its lease payments on an ongoing basis.
Management evaluates whether an impairment in carrying value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), and the residual value of the real estate, with the carrying value of the individual asset. The future undiscounted cash flows are primarily driven by estimated future market rents.
Management evaluates whether an impairment in carrying value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), and the residual value of the real estate, with the carrying value of the individual asset. The future undiscounted cash flows are driven by estimated future market rents.
C apital Structure NNN has used, and expects to use in the future, various forms of debt and equity securities primarily to fund property acquisitions and construction on its Properties and to pay down or refinance its outstanding debt.
C apital Structure NNN has used, and expects to use in the future, various forms of debt and equity securities to fund property acquisitions and construction on its Properties and to pay down or refinance its outstanding debt.
Cash provided by operating activities represents cash received primarily from rental income less cash used for general and administrative and interest expenses. NNN's cash flow from operating activities has been sufficient to pay the distributions for each year presented.
Cash provided by operating activities represents cash received from rental income less cash used for general and administrative and interest expenses. NNN's cash flow from operating activities has been sufficient to pay the distributions for each year presented.
The specifics of any future offerings along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplements, or other offering materials, at the time of any offering. 40 Debt Securities – Notes Payable.
The specifics of any future offerings along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplements, or other offering materials, at the time of any offering. Debt Securities – Notes Payable.
In the event that NNN violates any of these restrictive financial covenants, it could cause the debt under the Credit Facility to be accelerated and may impair NNN's access to the debt and equity markets and limit NNN's ability to pay dividends to its stockholders, each of which would likely have a material adverse impact on NNN's financial condition and results of operations.
In the event that NNN violates any of these restrictive financial covenants, it could cause the debt under the Credit Facility and Term Loan to be accelerated and may impair NNN's access to the debt and equity markets and limit NNN's ability to pay dividends to its stockholders, each of which would likely have a material adverse impact on NNN's financial condition and results of operations.
These indicators include, but are not limited to: changes in real estate market conditions, the ability of NNN to re-lease properties that are currently vacant or become vacant, properties reclassified as held for sale, persistent vacancies greater than one year, and properties leased to tenants in bankruptcy.
These indicators include, but are not limited to: changes in real estate market conditions, the ability of NNN to re-lease properties that are currently vacant or become vacant, properties under contract and/or reclassified as held for sale, persistent vacancies greater than one year and properties leased to tenants in bankruptcy.
In accordance with the terms of the indentures pursuant to which NNN's notes have been issued, NNN is required to meet certain restrictive financial covenants, which, among other things, require NNN to maintain (i) certain leverage ratios, and (ii) certain interest coverage. At December 31, 2024, NNN was in compliance with those covenants.
In accordance with the terms of the indentures pursuant to which NNN's notes have been issued, NNN is required to meet certain restrictive financial covenants, which, among other things, require NNN to maintain (i) certain leverage ratios, and (ii) certain interest coverage. At December 31, 2025, NNN was in compliance with those covenants.
NNN records the acquisition of real estate at cost, including acquisition and closing costs. The cost of properties developed or funded by NNN includes direct and indirect costs of construction, property taxes, interest, third-party costs and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy.
NNN records the acquisition of real estate at cost, including acquisition and closing costs. The cost of Properties developed or funded by NNN includes direct and indirect costs of construction, property taxes, interest, third-party costs and other miscellaneous costs incurred during the development period until the project is substantially completed and available for occupancy.
As a result of NNN's review of long-lived real estate assets, including identifiable intangible assets, NNN recognized real estate impairments, net of recoveries for the years ended December 31, 2024 and 2023, which were less than one percent of NNN's total assets for the respective years as reported on the Consolidated Balance Sheets.
As a result of NNN's review of long-lived real estate assets, including identifiable intangible assets, NNN recognized real estate impairments, net of recoveries for the years ended December 31, 2025 and 2024, which were less than one percent of NNN's total assets for the respective years as reported on the Consolidated Balance Sheets.
Universal Shelf Registration Statement. In August 2023, NNN filed a shelf registration statement with the Commission which became automatically effective (“Universal Shelf”). The Universal Shelf permits the issuance by NNN of an indeterminate amount of debt and equity securities, including preferred stock, depositary shares, common stock, stock purchase contracts, rights, warrants and units.
In August 2023, NNN filed a shelf registration statement with the Commission which became automatically effective ("Universal Shelf"). The Universal Shelf permits the issuance by NNN of an indeterminate amount of debt and equity securities, including preferred stock, depositary shares, common stock, stock purchase contracts, rights, warrants and units.
NNN considers collectability indicators when analyzing accounts receivable (and accrued rent) and historical bad debt levels, tenant credit-worthiness and current economic trends, all of which assists in evaluating the probability of outstanding and future rental income collections and the adequacy of the allowance for doubtful accounts.
NNN considers collectability indicators when analyzing accounts receivable (and accrued rent), historical bad debt levels, tenant credit-worthiness and current economic trends, all of which assist in evaluating the probability of outstanding and future rental income collections and the adequacy of the allowance for doubtful accounts.
Changes in cash for investing activities are primarily attributable to acquisitions and dispositions of Properties as discussed in "Results of Operations - Property Analysis." NNN typically uses cash on hand, borrowings from its Credit Facility or proceeds from the sale of Properties to fund the acquisition of its Properties. Financing Activities.
Changes in cash for investing activities are largely attributable to the acquisitions and dispositions of Properties as discussed in "Results of Operations - Property Analysis." NNN typically uses cash on hand, borrowings from its Credit Facility or proceeds from the sale of Properties to fund the acquisition of its Properties. Financing Activities.
A summary of NNN's accounting policies and procedures is included in Note 1 of the December 31, 2024 Consolidated Financial Statements. Management believes the following critical accounting policies, among others, affect its more significant estimates and assumptions used in the preparation of NNN's consolidated financial statements. Real Estate Portfolio.
A summary of NNN's accounting policies and procedures is included in Note 1 of the December 31, 2025 Consolidated Financial Statements. Management believes the following critical accounting policies, among others, affect its more significant estimates and assumptions used in the preparation of NNN's consolidated financial statements. Real Estate Portfolio.
In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") guidance on business combinations, consideration for the real estate acquired is allocated to the acquired tangible assets, consisting of land, building and tenant improvements and, if applicable, to identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and value of in-place leases, as applicable, based on their respective fair values.
In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 805, Business Combinations , consideration for the real estate acquired is allocated to the acquired tangible assets, consisting of land, building and tenant improvements and, if applicable, to identified intangible assets and liabilities, consisting of the value of above-market and below-market in-place leases and the value of in-place leases, as applicable, based on their respective fair values.
NNN's financing objective is to manage its capital structure effectively in order to provide sufficient capital to execute its operating and investing strategies while servicing its debt requirements, maintaining its investment grade credit rating, staggering debt maturities and providing value to NNN's stockholders.
NNN's financing objective is to manage its capital structure effectively in order to provide sufficient capital to execute its operating and investing strategies while servicing its debt requirements, maintaining its investment grade credit ratings, staggering debt maturities and providing value to NNN's stockholders.
(2) Interest calculation on notes payable based on stated rate of the principal amount. Property Construction. NNN has committed to fund construction of 15 Properties. The improvements of such Properties are estimated to be completed within 12 to 18 months.
(2) Interest calculation on notes payable based on stated rate of the principal amount. Property Construction. NNN has committed to fund construction on 19 Properties. The improvements on such Properties are estimated to be completed within 12 to 18 months.
Due to NNN's core business of investing in real estate leased primarily to retail tenants under long-term net leases, the inherent risks of owning commercial real estate, and unknown potential changes in financial and economic conditions that may impact NNN's tenants, NNN believes it is reasonably possible to incur real estate impairment charges in the future. Executive Retirement Costs.
Due to NNN's core business of investing in real estate leased primarily to tenants under long-term net leases, the inherent risks of owning commercial real estate and unknown potential changes in financial and economic conditions that may impact NNN's tenants, NNN believes it is reasonably possible to incur real estate impairment charges in the future. Retirement and Severance Costs.
Management anticipates satisfying these obligations with a combination of NNN's cash provided from operations, current capital resources on hand, its Credit Facility, debt or equity financings and property dispositions. Properties.
Management anticipates satisfying these obligations with a combination of NNN's cash provided from operations, current capital resources on hand, its Credit Facility, Term Loan, debt or equity financings and property dispositions. Properties.
The ratio of total debt to total market capitalization was approximately 37 percent. Certain financial agreements to which NNN is a party contain covenants that limit NNN's ability to incur additional debt under certain circumstances. The organizational documents of NNN do not limit the absolute amount or percentage of debt that NNN may incur. 36 Cash Flows.
The ratio of total debt to total market capitalization was approximately 39 percent. Certain financial agreements, to which NNN is a party, contain covenants that limit NNN's ability to incur additional debt under certain circumstances. The organizational documents of NNN do not limit the absolute amount or percentage of debt that NNN may incur. Cash Flows.
(5) NNN plans to use proceeds from the Credit Facility and/or potential debt or equity offerings to repay the outstanding debt. NNN entered into forward starting swaps which hedged the risk of changes in forecasted interest payments on the forecasted issuance of long-term debt.
(5) NNN plans to use proceeds from the Credit Facility and/or potential debt or equity offerings to repay the outstanding debt. 37 NNN entered into forward starting swaps which hedged the risk of changes in forecasted interest payments on the forecasted issuance of long-term unsecured notes.
Given these concentrations, any financial hardship within these sectors or geographic regions could have a material adverse effect on the financial condition and operating performance of NNN. 28 As of December 31, 2024 and 2023, the Property Portfolio remained at least 98 percent leased and had a weighted average remaining lease term of approximately 10 years.
Given these concentrations, any financial hardship within these sectors or geographic regions could have a material adverse effect on the financial condition and operating performance of NNN. 25 As of December 31, 2025 and 2024, the Property Portfolio remained at least 98 percent leased and had a weighted average remaining lease term of approximately 10 years.
Each of NNN's outstanding series of unsecured notes is summarized in the table below (dollars in thousands): Notes (1) Issue Date Principal Discount (2) Net Price Stated Rate Effective Rate (3) Maturity Date 2025 October 2015 $ 400,000 $ 964 $ 399,036 4.000% 4.029% November 2025 (4)(5) 2026 December 2016 350,000 3,860 346,140 3.600% 3.733% December 2026 (4) 2027 September 2017 400,000 1,628 398,372 3.500% 3.548% October 2027 (4) 2028 September 2018 400,000 2,848 397,152 4.300% 4.388% October 2028 (4) 2030 March 2020 400,000 1,288 398,712 2.500% 2.536% April 2030 2033 August 2023 500,000 11,620 488,380 5.600% 5.905% October 2033 2034 May 2024 500,000 6,160 493,840 5.500% 5.662% June 2034 2048 September 2018 300,000 4,239 295,761 4.800% 4.890% October 2048 2050 March 2020 300,000 6,066 293,934 3.100% 3.205% April 2050 2051 March 2021 450,000 8,406 441,594 3.500% 3.602% April 2051 2052 September 2021 450,000 10,422 439,578 3.000% 3.118% April 2052 (1) The proceeds from each note issuance were used to (i) pay down the outstanding balance on NNN's Credit Facility, (ii) redeem notes payable prior to maturity, (iii) redeem outstanding preferred stock, (iv) fund future property acquisitions, and/or (v) for general corporate purposes.
Each of NNN's outstanding series of unsecured notes is summarized in the table below (dollars in thousands): Notes (1) Issue Date Principal Discount (2) Net Price Stated Rate Effective Rate (3) Maturity Date 2026 December 2016 $ 350,000 $ 3,860 $ 346,140 3.600% 3.733% December 2026 (4)(5) 2027 September 2017 400,000 1,628 398,372 3.500% 3.548% October 2027 (4) 2028 September 2018 400,000 2,848 397,152 4.300% 4.388% October 2028 (4) 2030 March 2020 400,000 1,288 398,712 2.500% 2.536% April 2030 (4) 2031 July 2025 500,000 4,090 495,910 4.600% 4.766% February 2031 2033 August 2023 500,000 11,620 488,380 5.600% 5.905% October 2033 2034 May 2024 500,000 6,160 493,840 5.500% 5.662% June 2034 2048 September 2018 300,000 4,239 295,761 4.800% 4.890% October 2048 2050 March 2020 300,000 6,066 293,934 3.100% 3.205% April 2050 2051 March 2021 450,000 8,406 441,594 3.500% 3.602% April 2051 2052 September 2021 450,000 10,422 439,578 3.000% 3.118% April 2052 (1) The proceeds from each note issuance were used to (i) pay down the outstanding balance on the Credit Facility, (ii) redeem notes payable prior to maturity, (iii) redeem outstanding preferred stock, (iv) fund future property acquisitions, and/or (v) for general corporate purposes.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section generally discusses 2024 and 2023 and year-to-year comparisons.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section generally discusses 2025 and 2024 and year-to-year comparisons.
NNN's real estate is typically leased to tenants under triple-net leases, whereby the tenant is responsible for all operating expenses relating to the Property, including utilities, real estate taxes and assessments, property and liability insurance, maintenance, repairs and capital expenditures. NNN's Property Portfolio primarily consists of leases accounted for using the operating method.
NNN's real estate is predominantly leased to tenants under triple-net leases, whereby the tenant is responsible for all operating expenses relating to the Property, including utilities, real estate taxes and assessments, property and liability insurance, maintenance, repairs and capital expenditures. Substantially all of NNN's Property Portfolio consists of leases accounted for using the operating method.
Refer to Note 1 of the December 31, 2024, Consolidated Financial Statements for a summary and the anticipated impact of each accounting pronouncement on NNN's financial position and results of operations. Results of Operations Property Analysis General.
Refer to Note 1 of the December 31, 2025, Consolidated Financial Statements for a summary and the anticipated impact of each accounting pronouncement on NNN's financial position and results of operations. 27 Results of Operations Property Analysis General.
Total real estate expenses increased for the year ended December 31, 2024, as compared to the same period in 2023. NNN focuses on non-reimbursed real estate expenses (total real estate expenses, net of reimbursements from tenants).
Total real estate expenses increased for the year ended December 31, 2025, compared to the same period in 2024. NNN focuses on non-reimbursed real estate expenses (total real estate expenses, net of reimbursements from tenants).
Lease termination fees are recognized when collected subsequent to the related lease that is cancelled and NNN no longer has continuing involvement with the former tenant with respect to that property.
Lease termination fees are recognized when collected subsequent to the related lease that is cancelled and NNN no longer has continuing involvement with the former tenant with respect to that property. New Accounting Pronouncements.
NNN expects these sources of liquidity and the discretionary nature of its property acquisition funding needs will allow NNN to meet its financial obligations over the long term. As of December 31, 2024, NNN's ratio of total debt, none of which was secured debt, to total gross assets (before accumulated depreciation and amortization) was approximately 40 percent.
NNN expects these liquidity sources and the discretionary nature of its property acquisition funding needs will allow NNN to meet its financial obligations over the long term. 32 As of December 31, 2025, NNN's ratio of total debt, none of which was secured debt, to total gross assets (before accumulated depreciation and amortization) was approximately 42 percent.
Non-reimbursed real estate expenses increased in amount and as a percentage of total revenues for the year ended December 31, 2024 as compared to the same period in 2023 primarily due to a minor increase in the number of vacant properties. Depreciation and Amortization.
Non-reimbursed real estate expenses increased in amount and as a percentage of total revenues for the year ended December 31, 2025 compared to the same period in 2024 primarily due to an increase in the number of vacant properties. Depreciation and Amortization.
Upon the issuance of a series of unsecured notes, NNN terminated such derivatives as outlined in the following table (dollars in thousands): Notes Terminated Description Aggregate Notional Amount Liability (Asset) Fair Value When Terminated (1) Fair Value Deferred In Other Comprehensive Income (2) 2025 October 2015 Four forward starting swaps $ 300,000 $ 13,369 $ 13,369 2026 December 2016 Two forward starting swaps 180,000 (13,352 ) (13,345 ) 2027 September 2017 Two forward starting swaps 250,000 7,690 7,688 2028 September 2018 Two forward starting swaps 250,000 (4,080 ) (4,080 ) 2030 March 2020 Three forward starting swaps 200,000 13,141 13,141 2052 September 2021 Two forward starting swaps 120,000 1,584 1,584 (1) The deferred liability (asset) is being amortized over the term of the respective notes using the effective interest method.
Upon the issuance of a series of unsecured notes, NNN terminated such derivatives as outlined in the following table (dollars in thousands): Notes Terminated Description Aggregate Notional Amount Liability (Asset) Fair Value When Terminated (1) Fair Value Deferred In Other Comprehensive Income (2) 2026 December 2016 Two forward starting swaps $ 180,000 $ (13,352 ) $ (13,345 ) 2027 September 2017 Two forward starting swaps 250,000 7,690 7,688 2028 September 2018 Two forward starting swaps 250,000 (4,080 ) (4,080 ) 2030 March 2020 Three forward starting swaps 200,000 13,141 13,141 2031 June 2025 Two forward starting swaps 200,000 409 409 2052 September 2021 Two forward starting swaps 120,000 1,584 1,584 (1) The deferred liability (asset) is being amortized over the term of the hedged forecasted transaction using the effective interest method.
NNN typically expects to fund both its short-term and long-term liquidity requirements, including investments in additional properties, with cash and cash equivalents, cash provided from operations, borrowings from NNN's Credit Facility or proceeds from the sale of Properties.
NNN expects to fund both its short-term and long-term liquidity requirements, including investments in additional properties, with cash and cash equivalents, cash provided from operations, borrowings from the Credit Facility or senior unsecured term loan ("Term Loan") or proceeds from the sale of Properties.
Discussions of 2023 and 2022 year-to-year comparisons that are not included in this annual report on Form 10-K can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission ("Commission" or "SEC") on February 8, 2024.
Discussions of 2024 and 2023 year-to-year comparisons that are not included in this annual report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission ("Commission" or "SEC") on February 11, 2025.
These expenses are typically attributable to (i) Properties for which the lease terms do not obligate the tenant to pay certain operating expenses or (ii) vacant Properties.
In most cases, these expenses are attributable to (i) Properties for which the lease terms do not obligate the tenant to pay certain operating expenses or (ii) vacant Properties.
High occupancy levels coupled with a net lease structure, provides enhanced probability of achieving consistent operating results.
High occupancy levels coupled with a triple-net lease structure provide enhanced probability of achieving consistent operating results.
(2) The cap rate is a weighted average, calculated as the initial cash annual base rent divided by the total purchase price of the Properties. (3) Includes dollars invested in projects under construction or tenant improvements for each respective year.
(2) Calculated as the initial cash annual base rent divided by the total purchase price of the Properties. (3) Includes dollars invested in projects under construction or tenant improvements for each respective year.
The change in cash provided by operations for the years ended December 31, 2024 and 2023, is primarily the result of changes in revenues and expenses as discussed in “Results of Operations.” Cash generated from operations is expected to fluctuate in the future. Investing Activities.
The change in cash provided by operations for the years ended December 31, 2025 and 2024, is the result of changes in revenues and expenses as discussed in "Results of Operations." Cash generated from operations is expected to fluctuate in the future. Investing Activities.
Critical Accounting Estimates The preparation of NNN's consolidated financial statements in conformance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as other disclosures in the financial statements.
Critical Accounting Estimates The preparation of NNN's consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as other disclosures in the financial statements.
NNN's Properties are leased primarily to retail tenants under long-term net leases and primarily held for investment. Generally, NNN's Property leases provide for initial terms of 10 to 20 years, with cash flows provided over the entire term. Revenue Recognition .
NNN's Properties are predominantly leased to tenants under long-term net leases and held for investment. In most cases, NNN's Property leases provide for initial terms of 10 to 20 years, with cash flows provided over the entire term. Revenue Recognition .
NNN does not use derivatives for trading or speculative purposes or currently have any derivatives that are not designated as hedges. NNN had no derivative financial instruments outstanding at December 31, 2024. Equity Securities At-The-Market Offerings. NNN has established an ATM which allows NNN to sell shares of common stock from time to time.
NNN does not use derivatives for trading or speculative purposes or currently have any derivatives that are not designated as hedges. Equity Securities At-The-Market Offerings. NNN has established an ATM which allows NNN to sell shares of common stock from time to time.
As of December 31, 2024, NNN owned 54 vacant, un-leased Properties which accounted for less than two percent of total Properties and approximately two percent of aggregate gross leasable area held in the Property Portfolio. 38 Additionally, as of January 31, 2025, less than one percent of total annualized base rent, less than one percent of total Properties, and less than one percent of aggregate gross leasable area held in the Property Portfolio, was leased to three tenants currently in bankruptcy under Chapter 11 of the U.S.
As of December 31, 2025, NNN owned 64 vacant, un-leased Properties which accounted for less than two percent of total Properties and of the aggregate gross leasable area held in the Property Portfolio. 34 Additionally, as of January 30, 2026, less than one percent of total annualized base rent, total Properties and aggregate gross leasable area held in the Property Portfolio, was leased to one tenant currently in bankruptcy under Chapter 11 of the U.S.
Bankruptcy Code. As a result, these tenants have the right to reject or affirm their leases with NNN. NNN generally monitors the financial performance of its significant tenants on an ongoing basis. Dividends.
Bankruptcy Code. As a result, this tenant has the right to reject or affirm their lease with NNN. NNN generally monitors the financial performance of its significant tenants on an ongoing basis. Dividends.
The following table summarizes the Property acquisitions for each of the years ended December 31 (dollars in thousands): 2024 2023 Acquisitions: Number of Properties 75 165 Gross leasable area (square feet) (1) 1,486,000 1,281,000 Cap rate (2) 7.7 % 7.3 % Total dollars invested (3) $ 565,416 $ 819,710 (1) Includes additional square footage from completed construction on existing Properties.
The following table summarizes the Property acquisitions for each of the years ended December 31 (dollars in thousands): 2025 2024 Acquisitions: Number of Properties 239 75 Gross leasable area (square feet) (1) 4,193,000 1,486,000 Weighted average cap rate (2) 7.4 % 7.7 % Total dollars invested (3) $ 931,017 $ 565,416 (1) Includes additional square footage from completed construction on existing Properties.
If NNN subsequently deems the collection of rental income is probable, any related accrued rental income or expense is restored. NNN includes an allowance for doubtful accounts in rental income on the Consolidated Statements of Income and Comprehensive Income. Real Estate – Held For Sale.
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. NNN includes an allowance for doubtful accounts in rental income on the Consolidated Statements of Income and Comprehensive Income. Real Estate – Held For Sale.
The following table outlines the dividends declared and paid for NNN's common stock for the years ended December 31 (dollars in thousands, except per share data): 2024 2023 Dividends $ 420,239 $ 404,458 Per share 2.290 2.230 The following table presents the characterizations for tax purposes of NNN's common stock dividends for the years ended December 31: 2024 2023 Ordinary dividends (1) $ 2.286498 99.8471 % $ 2.192636 98.3245 % Nontaxable distributions 0.003502 0.1529 % 0.037364 1.6755 % $ 2.290000 100.0000 % $ 2.230000 100.0000 % (1) Eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code of 1986, as amended (the "Code").
The following table outlines the dividends declared and paid for NNN's common stock for the years ended December 31 (dollars in thousands, except per share data): 2025 2024 Dividends $ 443,202 $ 420,239 Per share 2.360 2.290 The following table presents the characterizations for tax purposes of NNN's common stock dividends for the years ended December 31: 2025 2024 Ordinary dividends (1) $ 2.249524 95.3188 % $ 2.286498 99.8471 % Nontaxable distributions 0.110476 4.6812 % 0.003502 0.1529 % $ 2.360000 100.0000 % $ 2.290000 100.0000 % (1) Eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code of 1986, as amended (the "Code").
Dividend Reinvestment and Stock Purchase Plan. In February 2024, NNN filed a shelf registration statement for its DRIP with the Commission that was automatically effective, and permits NNN to issue up to 4,000,000 shares of common stock. NNN's DRIP provides an economical and convenient way for current stockholders and other interested new investors to invest in NNN's common stock.
In February 2021 and 2024, NNN filed shelf registration statements for its DRIP with the Commission that were automatically effective, and permit NNN to issue up to 6,000,000 and 4,000,000 shares of common stock, respectively. NNN's DRIP provides an economical and convenient way for current stockholders and other interested new investors to invest in NNN's common stock.
The following table summarizes the properties sold by NNN for each of the years ended December 31 (dollars in thousands): 2024 2023 Number of properties 41 45 Gross leasable area (square feet) 849,000 293,000 Net sales proceeds $ 148,658 $ 115,716 Net gain on disposition of real estate $ 42,290 $ 47,485 Cap rate (1) 7.3 % 5.9 % (1) The cap rate is a weighted average of properties occupied at disposition, calculated as the cash annual base rent divided by the total gross proceeds received for the properties.
The following table summarizes the properties sold by NNN for each of the years ended December 31 (dollars in thousands): 2025 2024 Number of properties 116 41 Gross leasable area (square feet) 1,079,000 849,000 Net sales proceeds $ 190,474 $ 148,658 Net gain on disposition of real estate $ 48,220 $ 42,290 Weighted average cap rate (1) 6.4 % 7.3 % (1) Calculated as the cash annual base rent divided by the total gross proceeds received for the occupied properties.
The following outlines the common stock issuances pursuant to NNN's DRIP for the years ended December 31 (dollars in thousands): 2024 2023 Shares of common stock 64,654 76,229 Net proceeds $ 2,634 $ 3,082 42
The following outlines the common stock issuances pursuant to NNN's DRIP for the years ended December 31 (dollars in thousands): 2025 2024 Shares of common stock 65,062 64,654 Net proceeds $ 2,628 $ 2,634 39
In accordance with the terms of the Credit Facility, NNN is required to meet certain restrictive financial covenants, which, among other things, require NNN to maintain certain (i) leverage ratios, (ii) debt service coverage, (iii) cash flow coverage, and (iv) investment limitations. At December 31, 2024, NNN was in compliance with those covenants.
As of December 31, 2025, no funds had been drawn on the Term Loan. In accordance with the terms of both the Credit Facility and Term Loan, NNN is required to meet certain restrictive financial covenants, which, among other things, require NNN to maintain certain (i) leverage ratios, (ii) debt service coverage, (iii) cash flow coverage, and (iv) investment limitations.
The table below summarizes NNN's cash flows for each of the years ended December 31 (dollars in thousands): 2024 2023 Cash, cash equivalents and restricted cash: Provided by operating activities $ 635,504 $ 612,410 Used in investing activities (424,336 ) (680,660 ) Provided by (used in) financing activities (207,261 ) 66,627 Increase (decrease) in cash, cash equivalents and restricted cash 3,907 (1,623 ) Cash, cash equivalents and restricted cash at the beginning of the year 5,155 6,778 Cash, cash equivalents and restricted cash at the end of the year $ 9,062 $ 5,155 Cash flow activities include: Operating Activities.
The table below summarizes NNN's cash flows for each of the years ended December 31 (dollars in thousands): 2025 2024 Cash, cash equivalents and restricted cash: Provided by operating activities $ 667,131 $ 635,504 Used in investing activities (748,064 ) (424,336 ) Provided by (used in) financing activities 77,693 (207,261 ) Increase (decrease) in cash, cash equivalents and restricted cash (3,240 ) 3,907 Cash, cash equivalents and restricted cash at the beginning of the year 9,062 5,155 Cash, cash equivalents and restricted cash at the end of the year $ 5,822 $ 9,062 Cash flow activities include: Operating Activities.
These construction commitments, at December 31, 2024, are outlined in the table below (dollars in thousands): Total commitment (1) $ 165,550 Less amount funded (116,767 ) Remaining commitment $ 48,783 (1) Includes land, construction costs, tenant improvements, lease costs, capitalized interest and third-party costs.
These construction commitments, at December 31, 2025, are outlined in the table below (dollars in thousands): Total commitment (1) $ 136,213 Less amount funded (66,542 ) Remaining commitment $ 69,671 (1) Includes land, construction costs, tenant improvements, lease costs, capitalized interest and third-party costs.
For a complete discussion of forward-looking statements, see the section in this report entitled “Forward-Looking Statements.” Certain risks may cause NNN's actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see “Item 1A.
NNN makes statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this report entitled "Forward-Looking Statements." Certain risks may cause NNN's actual results, performance or achievements to differ materially from those expressed or implied by the following discussion.
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 the Properties were leased as of December 31, 2024.
As of December 31, 2025, NNN owned 3,692 Properties in all 50 states, the District of Columbia and Puerto Rico, with an aggregate gross leasable area of approximately 39,578,000 square feet and a weighted average remaining lease term of 10.2 years. As of December 31, 2025, 98.3 percent of the Properties were leased.
NNN had $9,062,000 of cash, cash equivalents and restricted cash, of which $331,000 was restricted cash or cash held in escrow at December 31, 2024.
NNN had $5,822,000 of cash, cash equivalents and restricted cash, of which $776,000 was restricted cash or cash held in escrow at December 31, 2025.
NNN may redeem each series of notes, in whole or in part, at any time prior to the par call date for the notes at the redemption price as set forth in the applicable supplemental indenture relating to the notes; provided, however, that if NNN redeems the notes on or after the par call date, the redemption price will equal 100 percent of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date. 41 In connection with the outstanding note offerings, NNN incurred debt issuance costs totaling $43,820,000 consisting primarily of underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses.
NNN may redeem each series of notes, in whole or in part, at any time prior to the par call date for the notes at the redemption price as set forth in the applicable supplemental indenture relating to the notes; provided, however, that if NNN redeems the notes on or after the par call date, the redemption price will equal 100 percent of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but not including, the redemption date.
The increase is primarily attributable to the increase in NNN's Property Portfolio from recent acquisitions (see "Results of Operations – Property Analysis – Property Acquisitions"), and is partially offset by recent dispositions (see "Results of Operations – Property Analysis – Property Dispositions"). Impairment Losses – Real Estate, Net of Recoveries.
Depreciation and amortization expenses increased for the year ended December 31, 2025, compared to the same period in 2024. The increase is primarily attributable to the increase in NNN's Property Portfolio from recent acquisitions, and was partially offset by recent dispositions (see "Results of Operations – Property Analysis"). Impairment Losses – Real Estate, Net of Recoveries.
NNN's financing activities for the year ended December 31, 2024, included the following significant transactions: • $132,000,000 in net repayments of NNN's Credit Facility, • $489,390,000 in net proceeds from the issuance in May of the 5.500% notes payable due in June 2034, • $350,000,000 payment in June for the redemption of the 3.900% notes payable due in June 2024, • $211,619,000 from the issuance of 4,652,100 shares of common stock in connection with the at-the-market equity program ("ATM"), • $2,634,000 from the issuance of 64,654 shares of common stock in connection with the Dividend Reinvestment and Stock Purchase Plan (“DRIP”), and • $420,239,000 in dividends paid to common stockholders. 37 Material Cash Requirements NNN's material cash requirements include (i) long-term debt maturities; (ii) interest on long-term debt; (iii) common stock dividends (although all future distributions will be declared and paid at the discretion of the Board of Directors); and (iv) to a lesser extent, Property construction and other Property related costs that may arise.
NNN's financing activities for the year ended December 31, 2025, included the following significant transactions: • $348,100,000 in net borrowings of NNN's Credit Facility, • $491,710,000 in net proceeds from the issuance in July of the 2031 Notes, • $400,000,000 payment in November for the redemption of the 2025 Notes, • $81,106,000 in net proceeds from the issuance of 1,927,893 shares of common stock in connection with the at-the-market equity program ("ATM"), • $2,628,000 in net proceeds from the issuance of 65,062 shares of common stock in connection with the Dividend Reinvestment and Stock Purchase Plan ("DRIP"), and • $443,202,000 in dividends paid to common stockholders. 33 Material Cash Requirements NNN's material cash requirements include (i) long-term debt maturities; (ii) interest on long-term debt; (iii) common stock dividends (although all future distributions will be declared and paid at the discretion of the Board of Directors); and (iv) to a lesser extent, Property construction and other Property related costs that may arise.
The Credit Facility matures in April 2028, unless the Company exercises its options to extend maturity to April 2029. The Credit Facility also includes an accordion feature which permits NNN to increase the facility size up to $2,000,000,000, subject to lender approval. In connection with the Credit Facility, loan costs are classified as debt costs on the Consolidated Balance Sheet.
The Credit Facility also includes an accordion feature which permits NNN to increase the facility size up to $2,000,000,000, subject to lender approval. In connection with the Credit Facility, NNN incurred loan costs of $36,146,000 which are included in debt costs on the Consolidated Balance Sheet.
On January 14, 2025, NNN declared a dividend of $0.580 per share, payable February 14, 2025, to its common stockholders of record as of January 31, 2025.
On January 15, 2026, NNN declared a dividend of $0.600 per share, which is payable February 13, 2026 to its common stockholders of record as of January 30, 2026.
The following table outlines NNN's ATM: 2023 ATM 2020 ATM Shelf registration statement: Effective date August 2023 August 2020 Termination date August 2026 August 2023 Total allowable shares 17,500,000 17,500,000 Total shares issued as of December 31, 2024 4,652,100 7,722,511 The following table outlines the common stock issuances pursuant to NNN's ATM for the years ended December 31 (dollars in thousands, except per share data): 2024 2023 Shares of common stock 4,652,100 650,135 Average price per share (net) $ 45.49 $ 43.52 Net proceeds $ 211,619 $ 28,292 Stock issuance costs (1) $ 3,242 $ 858 (1) Stock issuance costs consist primarily of underwriters' and agent's fees and commissions, and legal and accounting fees.
The following table outlines NNN's ATM: 2023 ATM 2020 ATM Shelf registration statement: Effective date August 2023 August 2020 Termination date August 2026 August 2023 Total allowable shares 17,500,000 17,500,000 Total shares issued as of December 31, 2025 6,579,993 7,722,511 38 The following table outlines the common stock issuances pursuant to NNN's ATM for the years ended December 31 (dollars in thousands, except per share data): 2025 (1) 2024 Shares of common stock 1,927,893 4,652,100 Average price per share (net) $ 42.07 $ 45.49 Net proceeds $ 81,106 $ 211,619 Stock issuance costs (2) $ 1,691 $ 3,242 (1) Includes 35,934 shares settled as part of a forward sale agreement.
The following table summarizes the Property Portfolio as of December 31: 2024 2023 Properties Owned: Number 3,568 3,532 Total gross leasable area (square feet) 36,557,000 35,966,000 Properties: Leased and unimproved land 3,514 3,514 Percent of Properties – leased and unimproved land 98 % 99 % Weighted average remaining lease term (years) 10 10 Total gross leasable area (square feet) – leased 35,826,000 35,683,000 Total annualized base rent $ 860,562,000 $ 818,749,000 (1) Annualized base rent is calculated by multiplying the monthly cash base rent in place on each respective date by 12.
The following table summarizes the Property Portfolio as of December 31: 2025 2024 Properties Owned: Number 3,692 3,568 Total gross leasable area (square feet) 39,578,000 36,557,000 States 50 49 Properties: Leased and unimproved land 3,628 3,514 Percent of Properties – leased and unimproved land 98.3 % 98.5 % Weighted average remaining lease term (years) 10.2 9.9 Total gross leasable area (square feet) – leased 38,955,000 35,826,000 Total Annualized Base Rent ("ABR") (1) $ 928,081,000 $ 860,562,000 (1) ABR represents the monthly cash base rent for all leases in place as of the end of the period multiplied by 12.
When NNN deems the collection of rental income from a tenant not probable, uncollected previously recognized rental revenue and any related accrued rent are reversed as a reduction to rental income and, subsequently, any rental income is only recognized when cash receipts are received. At this point, a tenant is deemed cash basis for accounting purposes.
In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected recovery of pre-petition and post-petition bankruptcy claims. 26 When NNN deems the collection of rental income from a tenant not probable, uncollected 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.
The following is a summary of NNN's total outstanding debt as of December 31 (dollars in thousands): 2024 Percentage of Total 2023 Percentage of Total Line of credit payable $ — — % $ 132,000 3.0 % Notes payable 4,373,803 100.0 % 4,228,544 97.0 % Total outstanding debt $ 4,373,803 100.0 % $ 4,360,544 100.0 % 39 Line of Credit Payable.
The following is a summary of NNN's total debt outstanding as of December 31 (dollars in thousands): 2025 Percentage of Total 2024 Percentage of Total Line of credit payable $ 348,100 7.2 % $ — — % Notes payable 4,472,324 92.8 % 4,373,803 100.0 % Total debt outstanding $ 4,820,424 100.0 % $ 4,373,803 100.0 % 35 Line of Credit Payable.
Properties are leased to tenants under long-term triple-net leases which typically require the tenant to pay certain operating expenses for a Property, thus, NNN's exposure to inflation is reduced with respect to these expenses. Inflation may have an adverse impact on NNN's tenants and challenge their ability to meet lease obligations, including to pay rent. See "Item 1A.
As a result of limitations on rent increases, during times when inflation is high, rent increases may not meet or exceed the rate of inflation. Properties are leased to tenants under long-term triple-net leases which typically require the tenant to pay certain operating expenses for a Property, thus, NNN's exposure to inflation is reduced with respect to these expenses.
The table presents material cash requirements related to NNN's long-term obligations outstanding as of December 31, 2024 (see "Capital Structure") (dollars in thousands): Date of Obligation Total 2025 2026 2027 2028 2029 Thereafter Long-term debt (1) $ 4,450,000 $ 400,000 $ 350,000 $ 400,000 $ 400,000 $ — $ 2,900,000 Long-term debt – interest (2) 2,062,506 176,250 161,725 146,733 132,067 118,450 1,327,281 Total contractual cash obligations $ 6,512,506 $ 576,250 $ 511,725 $ 546,733 $ 532,067 $ 118,450 $ 4,227,281 (1) Includes only principal amounts outstanding under notes payable and excludes unamortized note discounts and debt costs.
The table below presents material cash requirements related to NNN's long-term obligations outstanding as of December 31, 2025 (see "Capital Structure") (dollars in thousands): Year of Obligation Total 2026 2027 2028 2029 2030 Thereafter Long-term debt (1) $ 4,550,000 $ 350,000 $ 400,000 $ 400,000 $ — $ 400,000 $ 3,000,000 Long-term debt – interest (2) 2,004,131 184,725 169,733 155,067 141,450 134,367 1,218,789 Credit Facility 348,100 — — 348,100 — — — Total contractual cash obligations $ 6,902,231 $ 534,725 $ 569,733 $ 903,167 $ 141,450 $ 534,367 $ 4,218,789 (1) Includes only principal amounts outstanding under notes payable and excludes unamortized note discounts and debt costs.
Depreciation and amortization expenses increased in amount for the year ended December 31, 2024, as compared to the same period in 2023.
Interest expense increased for the year ended December 31, 2025, compared to the same period in 2024.
NNN continues to maintain its diversification by tenant, line of trade and geography. NNN's largest line of trade concentrations are the convenience store (17.0%), automotive service (16.9%), restaurant (16.2%) (including full and limited service) and family entertainment centers (7.2%) sectors.
NNN continues to maintain its diversification by tenant, line of trade and geography. NNN's top line of trade concentrations are the automotive service (18.6%), convenience stores (16.3%), restaurants (including full and limited service) (14.3%), entertainment (7.2%) and dealerships (6.6%) sectors. NNN's management believes these sectors present attractive investment opportunities.
Family entertainment centers 7.2% 6.4% 6. Recreational vehicle dealers, parts and accessories 5.1% 4.6% 7. Theaters 4.0% 4.1% 8. Health and fitness 3.9% 4.5% 9. Equipment rental 3.2% 3.0% 10. Wholesale clubs 2.4% 2.5% 11. Automotive parts 2.4% 2.5% 12. Drug stores 2.2% 2.4% 13. Home improvement 2.1% 2.2% 14. Medical service providers 1.7% 1.7% 15.
Automotive service 18.6% 17.1% 2. Convenience stores 16.3% 17.0% 3. Restaurants – limited service 7.9% 8.4% 4. Entertainment 7.2% 7.2% 5. Dealerships 6.6% 5.8% 6. Restaurants – full service 6.4% 7.8% 7. Health and fitness 3.9% 3.9% 8. Theaters 3.7% 4.0% 9. Automotive parts 3.2% 2.4% 10. Equipment rental 3.1% 3.2% 11. Wholesale clubs 2.3% 2.4% 12.
Risk Factors.” Overview NNN, a Maryland corporation, is a fully integrated real estate investment trust ("REIT") formed in 1984. NNN's assets are primarily real estate assets. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and are primarily held for investment ("Properties," or "Property Portfolio," or individually a "Property").
NNN acquires, owns, invests in and develops high-quality properties that are leased primarily to tenants under long-term, net leases, with minimal ongoing capital expenditures and are primarily held for investment ("Properties" or "Property Portfolio" or individually a "Property").
Rental Income. Rental income increased for the year ended December 31, 2024, as compared to the same period in 2023. The increase is primarily due to the Rental Revenues from NNN's recent Property acquisitions (see "Results of Operations – Property Analysis – Property Acquisitions").
(2) See "Results of Operations – Analysis of Expenses – Real Estate" for additional information. Rental Income. Rental income increased for the year ended December 31, 2025, compared to the same period in 2024.
NNN typically uses the disposition proceeds to either pay down the Credit Facility or reinvest in real estate. 33 Analysis of Revenues The following summarizes NNN's revenues for each of the years ended December 31 (dollars in thousands): 2024 2023 2024 Versus 2023 Rental Revenues (1) $ 848,657 $ 807,327 5.1 % Real estate expenses reimbursed from tenants 18,811 18,763 0.3 % Rental income 867,468 826,090 5.0 % Interest and other income from real estate transactions 1,798 2,021 (11.0 )% Total revenues $ 869,266 $ 828,111 5.0 % (1) Includes rental income from operating leases, earned income from direct financing leases and percentage rent ("Rental Revenues").
Analysis of Revenues The following table summarizes NNN's revenues for each of the years ended December 31 (dollars in thousands): 2025 2024 Change Rental Revenues (1) $ 904,342 $ 848,657 $ 55,685 Real estate expenses reimbursed from tenants (2) 20,038 18,811 1,227 Rental income 924,380 867,468 56,912 Interest and other income from real estate transactions 1,833 1,798 35 Total revenues $ 926,213 $ 869,266 $ 56,947 (1) Includes rental income from operating leases, earned income from direct financing leases and percentage rent ("Rental Revenues").
Forward-Looking Statements The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. NNN makes statements in this section that are forward-looking statements within the meaning of the federal securities laws.
The term "NNN" or the "Company" refers to NNN REIT, Inc. and its consolidated subsidiaries. NNN may elect to treat certain of its subsidiaries as taxable real estate investment trust subsidiaries. Forward-Looking Statements The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
In April 2024, NNN amended and restated its credit agreement to increase borrowing capacity under its unsecured revolving credit facility from $1,100,000,000 to $1,200,000,000 and amended certain other terms under the former revolving credit facility (as the context requires, the previous and new credit facility, the "Credit Facility").
In April 2024, NNN amended certain terms of its credit agreement to, among other things, increase borrowing capacity under its unsecured revolving credit facility from $1,100,000,000 to $1,200,000,000 (the "Credit Facility"). The Credit Facility had a weighted average outstanding balance of $106,166,000 and a weighted average interest rate of 5.04% during the year ended December 31, 2025.
(2) $818,749,000 as of December 31, 2023. 32 The following table summarizes the diversification of the Property Portfolio by state as of December 31, 2024: State # of Properties % of Annual Base Rent (1) 1. Texas 575 18.8% 2. Florida 276 8.7% 3. Illinois 167 5.1% 4. Georgia 175 4.5% 5. Ohio 193 4.2% 6. Tennessee 153 3.8% 7.
Consumer electronics 1.1% 1.3% Other 7.1% 6.9% 100.0% 100.0% ABR $ 928,081,000 $ 860,562,000 The following table summarizes the diversification of the Property Portfolio by state as of December 31, 2025: State # of Properties % of ABR 1. Texas 594 18.4% 2. Florida 270 8.7% 3. Illinois 179 5.1% 4. Georgia 172 4.5% 5. Ohio 215 4.2% 6.
Analysis of Expenses The following summarizes NNN's expenses for the year ended December 31 (dollars in thousands): 2024 2023 2024 Versus 2023 General and administrative $ 44,287 $ 43,746 1.2 % Real estate: Reimbursed from tenants 18,811 18,763 0.3 % Non-reimbursed 13,506 9,615 40.5 % Total real estate 32,317 28,378 13.9 % Depreciation and amortization 249,681 238,625 4.6 % Leasing transaction costs 99 299 (66.9 )% Impairment losses – real estate, net of recoveries 6,632 5,990 10.7 % Executive retirement costs 668 3,454 (80.7 )% Total operating expenses $ 333,684 $ 320,492 4.1 % Interest and other income $ (2,980 ) $ (1,134 ) 162.8 % Interest expense 184,017 163,898 12.3 % Total other expenses $ 181,037 $ 162,764 11.2 % As a percentage of total revenues: General and administrative 5.1 % 5.3 % Non-reimbursed real estate 1.6 % 1.2 % 34 Real Estate.
The increase is primarily due to the Rental Revenues from NNN's recent Property acquisitions (see "Results of Operations – Property Analysis – Property Acquisitions"). 30 Analysis of Expenses The following table summarizes NNN's expenses for the year ended December 31 (dollars in thousands): 2025 2024 Change General and administrative $ 46,923 $ 44,287 $ 2,636 Real estate: Reimbursed from tenants 20,038 18,811 1,227 Non-reimbursed 17,343 13,506 3,837 Total real estate 37,381 32,317 5,064 Depreciation and amortization 268,439 249,681 18,758 Leasing transaction costs 486 99 387 Impairment losses – real estate, net of recoveries 28,602 6,632 21,970 Retirement and severance costs 3,116 668 2,448 Total operating expenses $ 384,947 $ 333,684 $ 51,263 Interest and other income $ (4,246 ) $ (2,980 ) $ (1,266 ) Interest expense 203,955 184,017 19,938 Total other expenses $ 199,709 $ 181,037 $ 18,672 As a percentage of total revenues: General and administrative 5.1 % 5.1 % Non-reimbursed real estate 1.9 % 1.6 % Real Estate.
Tenant leases generally provide for limited increases in rent as a result of fixed increases, capped increases in the Consumer Price Index, and/or, to a lesser extent, increases in the tenant's sales volume. As a result of limitations on rent increases, during times when inflation is high, rent increases may not meet or exceed the rate of inflation.
Impact of Inflation NNN's leases typically contain provisions to mitigate the adverse impact of inflation on NNN's results of operations. Tenant leases typically provide for limited increases in rent as a result of fixed increases and/or capped increases in the Consumer Price Index.
As of December 31, 2024, NNN had $9,062,000 of cash, cash equivalents and restricted cash or cash held in escrow and $1,200,000,000 was available for future borrowings under the Credit Facility.
As of December 31, 2025, NNN had $5,822,000 of cash, cash equivalents and restricted cash or cash held in escrow, and $851,900,000 and $300,000,000 were available for future borrowings under the Credit Facility and Term Loan, respectively. NNN may also fund liquidity requirements with new debt or equity issuances.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe information in the table below summarizes NNN's market risks associated with its outstanding debt obligations. The table presents, by year of expected maturity, principal payments and related interest rates for debt obligations outstanding as of December 31, 2024.
Biggest changeThe forward starting swaps were outstanding as of December 31, 2025, and have an effective date of January 15, 2026. The table below summarizes NNN's market risks associated with its outstanding debt obligations as of December 31, 2025, detailing principal payments and related interest rates by maturity year.
If interest rates on NNN's variable rate debt increased by one percent, NNN's interest expense would have increased by less than one percent for the year ended December 31, 2024.
If interest rates on NNN's variable rate debt increased by one percent, NNN's interest expense would have increased by less than one percent for the year ended December 31, 2025.
(2) Includes NNN's notes payable, each exclude unamortized discounts and debt costs. The fair value is based upon quoted market prices as of the close of the year, which is a Level 1 valuation since NNN's notes payable are publicly traded on the over-the-counter market. (3) Weighted average effective interest rate for years after 2029. 43
(2) Includes NNN's notes payable, each exclude unamortized discounts and debt costs. The fair value is based upon quoted market prices as of the close of the year, which is a Level 1 valuation since NNN's notes payable are publicly traded on the over-the-counter market. (3) Weighted average effective interest rate for years after 2030. 40
Item 7A. Quantitative and Q ualitative Disclosures About Market Risk NNN is exposed to interest rate risk primarily as a result of its variable rate Credit Facility and its fixed rate long-term debt which is used to finance NNN's Property acquisitions and development activities, as well as for general corporate purposes.
Item 7A. Quantitative and Q ualitative Disclosures About Market Risk NNN is exposed to interest rate risk primarily as a result of its variable rate Credit Facility and Term Loan and its fixed rate long-term debt which is used to finance NNN's Property acquisitions and construction commitments, as well as for general corporate purposes.
Debt Obligations (1) (dollars in thousands) Variable Rate Debt Fixed Rate Debt Credit Facility Unsecured Debt (2) Debt Obligation Weighted Average Interest Rate Principal Debt Obligation Effective Interest Rate 2025 $ — — $ 400,000 4.03 % 2026 — — 350,000 3.73 % 2027 — — 400,000 3.55 % 2028 — — 400,000 4.39 % 2029 — — — — Thereafter — — 2,900,000 4.22 % (3) Total $ — — $ 4,450,000 4.12 % Fair Value: December 31, 2024 $ — $ 3,894,030 December 31, 2023 $ 132,000 $ 3,801,367 (1) NNN's unsecured debt obligations have a weighted average interest rate of 4.1% and a weighted average maturity of 12.1 years.
Debt Obligations (1) (dollars in thousands) Variable Rate Debt Fixed Rate Debt Credit Facility Unsecured Debt (2) Debt Obligation Weighted Average Interest Rate Principal Debt Obligation Effective Interest Rate 2026 $ — — $ 350,000 3.73 % 2027 — — 400,000 3.55 % 2028 348,100 5.04 % 400,000 4.39 % 2029 — — — — 2030 — — 400,000 2.54 % Thereafter — — 3,000,000 4.54 % (3) Total $ 348,100 5.04 % $ 4,550,000 4.20 % Fair Value: December 31, 2025 $ 348,100 $ 4,124,161 December 31, 2024 $ — $ 3,894,030 (1) NNN's unsecured debt obligations have a weighted average interest rate of 4.2% and a weighted average maturity of 10.8 years.
For the year ended December 31, 2024, the Credit Facility had a weighted average outstanding balance of $60,775,000 and a weighted average interest rate of 6.25% compared to a weighted average outstanding balance of $169,620,000 and a weighted average interest rate of 5.86% for 2023.
As of December 31, 2025, NNN's variable rate Credit Facility had $348,100,000 outstanding. For the year ended December 31, 2025, the Credit Facility had a weighted average outstanding balance of $106,166,000 and a weighted average interest rate of 5.04% compared to a weighted average outstanding balance of $60,775,000 and a weighted average interest rate of 6.25% for 2024.
The table incorporates only those debt obligations that existed as of December 31, 2024, and it does not consider those debt obligations or positions which could arise after this date and therefore has limited predictive value.
The table incorporates only debt obligations that existed as of December 31, 2025, and it does not account for future obligations and therefore has limited predictive value. Actual realized gains or losses from interest rate fluctuations will depend on future exposures, interest rates and NNN's hedging strategies.
Removed
As of December 31, 2024, NNN had no outstanding derivatives. As of December 31, 2024, NNN's variable rate Credit Facility had no outstanding balance.
Added
In December 2025, NNN entered into the Term Loan, and had no outstanding balance as of December 31, 2025. NNN entered into two forward starting swaps with an aggregate notional amount of $200,000,000 to hedge the risk of changes in the interest cash outflows associated with future draws on NNN's Term Loan.
Removed
As a result, NNN's ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, NNN's hedging strategies at that time and interest rates.

Other NNN 10-K year-over-year comparisons