Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: November 3, 2016
 
NATIONAL RETAIL PROPERTIES, INC.
(exact name of registrant as specified in its charter)
 
 
 
 
 
 
Maryland
 
001-11290
 
56-1431377
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employment
Identification No.)
450 South Orange Avenue, Suite 900, Orlando, Florida 32801
(Address of principal executive offices, including zip code)
(407) 265-7348
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02.
Results of Operations and Financial Condition.
On November 3, 2016 National Retail Properties, Inc. issued a press release announcing its results of operations and financial condition for the quarter and nine months ended September 30, 2016. The press release is attached hereto as Exhibit 99.1.
The information in this Form 8-K is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of such section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01.
Financial Statements and Exhibits.
(d)
Exhibits.
 
 
 
99.1

  
Press Release, dated November 3, 2016, of National Retail Properties, Inc.




Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
National Retail Properties, Inc.
 
 
 
Dated: November 3, 2016
 
By:
 
/s/ Kevin B. Habicht
 
 
 
 
Kevin B. Habicht
 
 
 
 
Executive Vice President and Chief Financial Officer






EXHIBIT INDEX
 
 
 
 
Exhibit No.
  
Description
 
 
99.1
  
Press Release, dated November 3, 2016, of National Retail Properties, Inc.


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit

36538968_nnnlogo201600930.jpg    

NEWS RELEASE
For information contact:
Kevin B. Habicht
Chief Financial Officer
(407) 265-7348    FOR IMMEDIATE RELEASE
November 3, 2016

THIRD QUARTER 2016 OPERATING RESULTS AND 2017 GUIDANCE
ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.

Orlando, Florida, November 3, 2016 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter and nine months ended September 30, 2016. Highlights include:

Operating Results:
Revenues and net earnings, FFO, Core FFO and AFFO available to common stockholders and diluted per share amounts:
 
Quarter Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2016
 
2015
 
2016
 
2015
 
(in thousands, except per share data)
Revenues
$
134,541

 
$
123,143

 
$
392,448

 
$
356,537

 
 
 
 
 
 
 
 
Net earnings available to common stockholders
$
41,925

 
$
46,339

 
$
146,833

 
$
128,789

Net earnings per common share
0.28

 
0.34

 
1.02

 
0.96

 
 
 
 
 
 
 
 
FFO available to common stockholders
$
81,226

 
$
77,940

 
$
241,827

 
$
221,873

FFO per common share
$
0.55

 
$
0.58

 
$
1.68

 
$
1.66

 
 
 
 
 
 
 
 
Core FFO available to common stockholders
$
87,204

 
$
77,993

 
$
251,926

 
$
222,510

Core FFO per common share
$
0.59

 
$
0.58

 
$
1.75

 
$
1.67

 
 
 
 
 
 
 
 
AFFO available to common stockholders
$
89,367

 
$
79,516

 
$
257,648

 
$
226,819

AFFO per common share
$
0.61

 
$
0.59

 
$
1.79

 
$
1.70



Third Quarter 2016 Highlights:

Core FFO per share increased 1.7% over prior year results
AFFO per share increased 3.4% over prior year results
Portfolio occupancy was 99.0% at September 30, 2016 as compared to 99.1% at June 30, 2016 and March 31, 2016
Invested $127.8 million in property investments, including the acquisition of 38 properties with an aggregate 350,000 square feet of gross leasable area at an initial cash yield of 7.1%
Sold seven properties for $10.6 million producing $4.5 million of gains on sales
Raised $56.8 million net proceeds from the issuance of 1,117,897 common shares
In October 2016, the company raised $334.3 million in net proceeds from the issuance of 13,800,000 depositary shares representing interests in its 5.20% Series F preferred stock




Highlights for the nine months ended September 30, 2016:

Core FFO per share increased 4.8% over prior year results
AFFO per share increased 5.3% over prior year results
Invested $596.5 million in 249 properties with an aggregate 2,036,000 square feet of gross leasable area at an initial cash yield of 6.9%
Sold 24 properties for $83.1 million producing $22.6 million of gains on sales
Raised $273.1 million in net proceeds from the issuance of 5,880,862 common shares

The company also announced 2017 FFO guidance of $2.42 to $2.48 per share and estimated 2017 AFFO to be $2.46 to $2.52 per share. This FFO guidance equates to net earnings before any gains or losses from the sale of real estate, impairment charges or severance charges of $1.37 to $1.43 per share plus $1.05 per share of expected real estate related depreciation and amortization. The guidance is based on current plans, assumptions, and estimates and is subject to the risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.

Craig Macnab, Chief Executive Officer, commented: "Strong acquisition activity in 2016 will support continued growth in per share results in 2016 and 2017. Our recent issuance of 5.20% preferred shares marks the second lowest preferred dividend rate in the REIT industry and is consistent with our long-term conservative positioning of our balance sheet."

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2016, the company owned 2,485 properties in 48 states with a gross leasable area of approximately 26.6 million square feet and with a weighted average remaining lease term of 11.5 years. For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on November 3, 2016, at 10:30 a.m. ET to review these results. The call can be accessed on the National Retail Properties web site live at http://www.nnnreit.com. For those unable to listen to the live broadcast, a replay will be available on the company’s web site. In addition, a summary of any earnings guidance given on the call will be posted to the company’s web site.

Statements in this press release that are not strictly historical are “forward-looking” statements. These statements generally are characterized by the use of terms such as "believe," "expect," "intend," "may," "estimated," or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, changes in interest rates, increases in operating costs, the preferences and financial condition of the company's tenants, the availability of capital, risks related to the company's status as a REIT and the profitability of the company’s taxable subsidiary. Additional information concerning these and other factors that could cause actual results to differ materially from these forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (“SEC”) filings, including, but not limited to, the company’s Annual Report on Form 10-K. Copies of each filing may be obtained from the company or the SEC. Such forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. National Retail Properties, Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

The reported results are preliminary and not final and there can be no assurance that the results will not vary from the final information filed on Form 10-Q with the SEC for the quarter and nine months ended September 30, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.

Funds From Operations, commonly referred to as FFO, is a relative non-GAAP financial measure of operating performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and is used by the company as follows: net earnings (computed in accordance with GAAP) plus depreciation and amortization of assets unique to the real estate industry, excluding gains (or including losses), any applicable taxes and noncontrolling interests on the disposition of certain assets, the company’s share of these items from the company’s unconsolidated partnerships and any impairment charges on a depreciable real estate asset.

FFO is generally considered by industry analysts to be the most appropriate measure of performance of real estate companies. FFO does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net earnings as an indication of the company’s performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers FFO an appropriate measure of performance of an equity REIT because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. The company’s computation of FFO may differ from the methodology for calculating FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to FFO, as defined by NAREIT, is included in the financial information accompanying this release.


2



Core Funds From Operations (“Core FFO”) is a non-GAAP measure of operating performance that adjusts FFO to eliminate the impact of certain GAAP income and expense amounts that the company believes are infrequent and unusual in nature and/or not related to its core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the REIT industry, and management believes that presentation of Core FFO provides investors with a potential metric to assist in their evaluation of the company’s operating performance across multiple periods and in comparison to the operating performance of its peers because it removes the effect of unusual items that are not expected to impact the company’s operating performance on an ongoing basis. Core FFO is used by management in evaluating the performance of the company’s core business operations and is a factor in determining management compensation. Items included in calculating FFO that may be excluded in calculating Core FFO may include items like transaction related gains, income or expense, impairments on land or commercial mortgage residual interests, preferred stock redemption costs or other non-core amounts as they occur. The company’s computation of Core FFO may differ from the methodology for calculating Core FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to Core FFO is included in the financial information accompanying this release.

Adjusted Funds From Operations (“AFFO”) is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO adjusts FFO for certain non-cash items that reduce or increase net income in accordance with GAAP. AFFO should not be considered an alternative to net earnings, as an indication of the company's performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers AFFO a useful supplemental measure of the company’s performance. The company’s computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to AFFO is included in the financial information accompanying this release.


3


National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)

 
 
Quarter Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2016
 
2015
 
2016
 
2015
Income Statement Summary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
Rental and earned income
 
$
130,603

 
$
118,889

 
$
380,007

 
$
344,177

Real estate expense reimbursement from tenants
 
3,413

 
3,469

 
10,251

 
10,307

Interest and other income from real estate transactions
 
141

 
345

 
905

 
721

Interest income on commercial mortgage residual interests
 
384

 
440

 
1,285

 
1,332

 
 
134,541

 
123,143

 
392,448

 
356,537

 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
General and administrative
 
9,116

 
8,643

 
27,100

 
25,078

Real estate
 
4,942

 
4,782

 
14,297

 
14,199

Depreciation and amortization
 
38,970

 
33,607

 
110,114

 
99,950

Impairment – commercial mortgage residual interests valuation
 
5,978

 
53

 
6,830

 
481

Impairment losses – real estate and other charges, net of recoveries
 
4,917

 
(3
)
 
10,949

 
3,711

 
 
63,923

 
47,082

 
169,290

 
143,419

 
 
 
 
 
 
 
 
 
Other expenses (revenues):
 
 
 
 
 
 
 
 
Interest and other income
 
(17
)
 
(20
)
 
(108
)
 
(67
)
Interest expense
 
24,257

 
21,996

 
71,923

 
65,460

Real estate acquisition costs
 
111

 
199

 
520

 
894

 
 
24,351

 
22,175

 
72,335

 
66,287

 
 
 
 
 
 
 
 
 
Income tax expense
 

 
(545
)
 

 
(491
)
 
 
 
 
 
 
 
 
 
Earnings before gain on disposition of real estate, net of income tax expense
 
46,267

 
53,341

 
150,823

 
146,340

 
 
 
 
 
 
 
 
 
Gain on disposition of real estate, net of income tax expense
 
4,505

 
1,914

 
22,558

 
9,145

 
 
 
 
 
 
 
 
 
Earnings including noncontrolling interests
 
50,772

 
55,255

 
173,381

 
155,485

 
 
 
 
 
 
 
 
 
Loss (earnings) attributable to noncontrolling interests
 
12

 
(57
)
 
28

 
(120
)
 
 
 
 
 
 
 
 
 
Net earnings attributable to NNN
 
50,784

 
55,198

 
173,409

 
155,365

Series D preferred stock dividends
 
(4,762
)
 
(4,762
)
 
(14,285
)
 
(14,285
)
Series E preferred stock dividends
 
(4,097
)
 
(4,097
)
 
(12,291
)
 
(12,291
)
Net earnings available to common stockholders
 
$
41,925

 
$
46,339

 
$
146,833

 
$
128,789

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
146,111

 
133,893

 
143,475

 
132,950

Diluted
 
146,682

 
134,246

 
144,036

 
133,306

 
 
 
 
 
 
 
 
 
Net earnings per share available to common stockholders:
 
 
 
 
 
 
 
 
Basic
 
0.29

 
0.34

 
1.02

 
0.96

Diluted
 
0.28

 
0.34

 
1.02

 
0.96

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

4


National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)

 
 
Quarter Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2016
 
2015
 
2016
 
2015
Funds From Operations (FFO) Reconciliation:
 
 
 
 
 
 
 
 
Net earnings available to common stockholders
 
$
41,925

 
$
46,339

 
$
146,833

 
$
128,789

Real estate depreciation and amortization
 
38,889

 
33,513

 
109,872

 
99,626

Gain on disposition of real estate, net of income tax and noncontrolling interest
 
(4,505
)
 
(1,914
)
 
(22,558
)
 
(9,092
)
Impairment losses – depreciable real estate, net of recoveries and income tax
 
4,917

 
2

 
7,680

 
2,550

Total FFO adjustments
 
39,301

 
31,601

 
94,994

 
93,084

FFO available to common stockholders
 
$
81,226

 
$
77,940

 
$
241,827

 
$
221,873

 
 
 
 
 
 
 
 
 
FFO per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.56

 
$
0.58

 
$
1.69

 
$
1.67

Diluted
 
$
0.55

 
$
0.58

 
$
1.68

 
$
1.66

 
 
 
 
 
 
 
 
 
Core Funds from Operations Reconciliation:
 
 
 
 
 
 
 
 
Net earnings available to common stockholders
 
$
41,925

 
$
46,339

 
$
146,833

 
$
128,789

Total FFO adjustments
 
39,301

 
31,601

 
94,994

 
93,084

FFO available to common stockholders
 
81,226

 
77,940

 
241,827

 
221,873

 
 
 
 
 
 
 
 
 
Impairment – commercial mortgage residual interests valuation
 
5,978

 
53

 
6,830

 
481

Impairment losses – non-depreciable real estate and other charges
 

 

 

 
156

Bad debt expense – loans
 

 

 
3,269

 

Total Core FFO adjustments
 
5,978

 
53

 
10,099

 
637

Core FFO available to common stockholders
 
$
87,204

 
$
77,993

 
$
251,926

 
$
222,510

 
 
 
 
 
 
 
 
 
Core FFO per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.60

 
$
0.58

 
$
1.76

 
$
1.67

Diluted
 
$
0.59

 
$
0.58

 
$
1.75

 
$
1.67

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

5


National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)

 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2016
 
2015
 
2016
 
2015
Adjusted Funds From Operations (AFFO) Reconciliation:
 
 
 
 
 
 
 
 
Net earnings available to common stockholders
 
$
41,925

 
$
46,339

 
$
146,833

 
$
128,789

Total FFO adjustments
 
39,301

 
31,601

 
94,994

 
93,084

Total Core FFO adjustments
 
5,978

 
53

 
10,099

 
637

Core FFO available to common stockholders
 
87,204

 
77,993

 
251,926

 
222,510

 
 
 
 
 
 
 
 
 
Straight line accrued rent
 
178

 
179

 
21

 
161

Net capital lease rent adjustment
 
362

 
270

 
1,055

 
946

Below market rent amortization
 
(659
)
 
(675
)
 
(2,180
)
 
(2,375
)
Stock based compensation expense
 
2,698

 
2,434

 
8,069

 
7,210

Capitalized interest expense
 
(416
)
 
(685
)
 
(1,243
)
 
(1,633
)
Total AFFO adjustments
 
2,163

 
1,523

 
5,722

 
4,309

AFFO available to common stockholders
 
$
89,367

 
$
79,516

 
$
257,648

 
$
226,819

 
 
 
 
 
 
 
 
 
AFFO per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.61

 
$
0.59

 
$
1.80

 
$
1.71

Diluted
 
$
0.61

 
$
0.59

 
$
1.79

 
$
1.70

 
 
 
 
 
 
 
 
 
Other Information:
 
 
 
 
 
 
 
 
Percentage rent
 
$
321

 
$
331

 
$
959

 
$
628

Amortization of debt costs
 
$
763

 
$
719

 
$
2,276

 
$
2,142

Scheduled debt principal amortization (excluding maturities)
 
$
135

 
$
390

 
$
527

 
$
1,209

Non-real estate depreciation expense
 
$
84

 
$
100

 
$
250

 
$
340

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
















6


National Retail Properties, Inc.
(in thousands, except per share data)
(unaudited)
 
 
2016 Earnings Guidance:
 
Core FFO guidance for 2016 is $2.32 to $2.35 per share before any impairment expense. The 2016 AFFO is estimated to be $2.37 to $2.40 per share. The FFO guidance equates to net earnings before any impairments or gains or losses from the sale of real estate of $1.30 to $1.33 per share, plus $1.02 per share of expected real estate depreciation and amortization. The guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.
 
 
2016 Guidance 
  Net earnings per common share before any impairment charges or gains (losses) on sale of real estate
 
$1.30 - $1.33 per share
  Real estate depreciation and amortization per share
 
$1.02 per share
Core FFO per share
 
$2.32 - $2.35 per share
  AFFO per share
 
$2.37 - $2.40 per share
  G&A expenses
 
$36.1 Million
  Real estate expenses, net of tenant reimbursements
 
$6.0 - $6.5 Million
  Acquisition volume
 
$700 - $800 Million
  Disposition volume
 
$90 - $100 Million
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017 Earnings Guidance:
 
Core FFO guidance for 2017 is $2.42 to $2.48 per share before any impairment or severance expense. The 2017 AFFO is estimated to be $2.46 to $2.52 per share. The FFO guidance equates to net earnings before any impairments, gains or losses from the sale of real estate or severance charges of $1.37 to $1.43 per share, plus $1.05 per share of expected real estate depreciation and amortization. The guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.
 
 
2017 Guidance 
  Net earnings per common share before any impairment charges, gains (losses) on sale of real estate or severance charges
 
$1.37 - $1.43 per share
  Real estate depreciation and amortization per share
 
$1.05 per share
Core FFO per share
 
$2.42 - $2.48 per share
  AFFO per share
 
$2.46 - $2.52 per share
  G&A expenses (excluding severance charges)
 
$34 - $35 Million
  Real estate expenses, net of tenant reimbursements
 
$6.0 - $6.5 Million
  Acquisition volume
 
$500 - $600 Million
  Disposition volume
 
$80 - $120 Million







7


National Retail Properties, Inc.
(in thousands)
(unaudited)

 
 
 
 
 
 
 
September 30, 2016
 
December 31, 2015
Balance Sheet Summary
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
Cash and cash equivalents
 
$
5,916

 
$
13,659

Restricted cash and cash held in escrow
 

 
601

Receivables, net of allowance
 
2,473

 
3,344

Mortgages, notes and accrued interest receivable, net of allowance
 
4,925

 
8,688

Real estate portfolio:
 
 
 
 
Accounted for using the operating method, net of accumulated depreciation and amortization
 
5,677,881

 
5,224,089

Accounted for using the direct financing method
 
13,464

 
14,518

Real estate held for sale
 
29,234

 
64,851

Accrued rental income, net of allowance
 
24,915

 
25,529

Debt costs, net of accumulated amortization
 
3,055

 
4,003

Commercial mortgage residual interests
 
189

 
11,115

Other assets
 
94,311

 
89,647

Total assets
 
$
5,856,363

 
$
5,460,044

 
 
 
 
 
Liabilities:
 
 
 
 
Line of credit payable
 
$
184,200

 
$

 Mortgages payable, including unamortized premium and net of unamortized debt costs
 
16,732

 
23,964

 Notes payable, net of unamortized discount and unamortized debt costs
 
1,954,244

 
1,951,980

Accrued interest payable
 
32,792

 
20,113

Other liabilities
 
89,315

 
121,594

Total liabilities
 
2,277,283

 
2,117,651

 
 
 
 
 
Stockholders' equity of NNN
 
3,578,849

 
3,342,134

Noncontrolling interests
 
231

 
259

Total equity
 
3,579,080

 
3,342,393

 
 
 
 
 
Total liabilities and equity
 
$
5,856,363

 
$
5,460,044

 
 
 
 
 
Common shares outstanding
 
147,123

 
141,008

 
 
 
 
 
Gross leasable area, Property Portfolio (square feet)
 
26,640

 
24,964

 
 
 
 
 


8


National Retail Properties, Inc.
Debt Summary
As of September 30, 2016
(in thousands)
(unaudited)
Unsecured Debt
 
Principal
 
Principal, Net of Unamortized Discount
 
Stated Rate
 
Effective Rate
 
Maturity Date
Line of credit payable
 
$
184,200

 
$
184,200

 
L + 92.5 bps

 
1.449
%
 
   January 2019
 
 
 
 
 
 
 
 
 
 
 
Unsecured notes payable:
 
 
 
 
 
 
 
 
 
 
2017
 
250,000

 
249,878

 
6.875
%
 
6.924
%
 
   October 2017
2021
 
300,000

 
297,657

 
5.500
%
 
5.689
%
 
   July 2021
2022
 
325,000

 
321,798

 
3.800
%
 
3.985
%
 
   October 2022
2023
 
350,000

 
348,207

 
3.300
%
 
3.388
%
 
   April 2023
2024
 
350,000

 
349,436

 
3.900
%
 
3.924
%
 
   June 2024
2025
 
400,000

 
399,111

 
4.000
%
 
4.029
%
 
   November 2025
Total
 
1,975,000

 
1,966,087

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total unsecured debt (1)
 
$
1,975,000

 
$
1,966,087

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt costs
 
 
 
(17,782
)
 
 
 
 
 
 
Accumulated amortization
 
5,939

 
 
 
 
 
 
Debt costs, net of accumulated amortization
 
(11,843)
 
 
 
 
 
 
Notes payable, net of unamortized discount and unamortized debt costs
 
$
1,954,244

 
 
 
 
 
 

(1) Unsecured notes payable have a weighted average interest rate of 4.5% and a weighted maturity of 6.2 years


Mortgages Payable
 
Principal Balance
 
Interest Rate
 
Maturity Date
Mortgage(1)
 
$
14,132

 
5.230
%
 
   July 2023
Mortgage(3)
 
2,714

 
6.400
%
 
   February 2017
 
 
$
16,846

 
(2) 
 
 
 
 
 
 
 
 
 
Debt costs
 
(226)
 
 
 
 
Accumulated amortization
 
112
 
 
 
 
Debt costs, net of accumulated amortization
 
(114)
 
 
 
 
Mortgages payable, including unamortized premium and net of unamortized debt costs
 
$
16,732

 
 
 
 
 
 
 
 
 
 
 
(1) Includes unamortized premium
 
 
 
 
 
 
(2) Mortgages payable have a weighted average interest rate of 5.4% and a weighted average maturity of 5.7 years
(3) Mortgage was paid off in October 2016


9


National Retail Properties, Inc.
Property Portfolio

Top 20 Lines of Trade
 
 
 
 
As of September 30,
 
 
Line of Trade
 
2016(1)
 
2015(2)
1.
 
Convenience stores
 
16.4
%
 
16.8
%
2.
 
Restaurants – full service
 
12.3
%
 
11.2
%
3.
 
Restaurants – limited service
 
7.6
%
 
7.0
%
4.
 
Automotive service
 
6.8
%
 
6.9
%
5.
 
Family entertainment centers
 
5.8
%
 
5.4
%
6.
 
Theaters
 
5.0
%
 
5.1
%
7.
 
Health and fitness
 
4.5
%
 
3.6
%
8.
 
Automotive parts
 
4.0
%
 
4.3
%
9.
 
Recreational vehicle dealers, parts and accessories
 
3.4
%
 
3.6
%
10.
 
Banks
 
3.2
%
 
3.5
%
11.
 
Sporting goods
 
2.6
%
 
3.3
%
12.
 
Wholesale clubs
 
2.4
%
 
2.7
%
13.
 
Medical service providers
 
2.4
%
 
2.2
%
14.
 
Drug stores
 
2.1
%
 
2.4
%
15.
 
Consumer electronics
 
2.0
%
 
2.2
%
16.
 
Travel plazas
 
2.0
%
 
2.2
%
17.
 
Furniture
 
1.9
%
 
1.1
%
18.
 
General merchandise
 
1.9
%
 
2.0
%
19.
 
Home improvements
 
1.9
%
 
1.8
%
20.
 
Home furnishings
 
1.7
%
 
1.9
%
 
 
Other
 
10.1
%
 
10.8
%
 
 
Total
 
100.0
%
 
100.0
%

Top 10 States
 
State
 
 
% of Total(1)
 
 
State
 
 
% of Total(1)
1.
Texas
 
 
18.7
%
 
6.
Indiana
 
 
4.3
%
2.
Florida
 
 
9.2
%
 
7.
Georgia
 
 
4.2
%
3.
Ohio
 
 
5.8
%
 
8.
Virginia
 
 
3.6
%
4.
Illinois
 
 
5.2
%
 
9.
Alabama
 
 
3.0
%
5.
North Carolina
 
 
4.9
%
 
10.
Tennessee
 
 
2.9
%

(1) 
Based on the annualized base rent for all leases in place as of September 30, 2016.
(2) 
Based on the annualized base rent for all leases in place as of September 30, 2015.


10


National Retail Properties, Inc.
Property Portfolio

Top Tenants ( ≥ 2.0%)
 
 
 
Properties
 
% of Total (1)
 
Sunoco
 
125

 
5.5
%
 
Mister Car Wash
 
92

 
4.2
%
 
LA Fitness
 
26

 
3.9
%
 
Camping World
 
32

 
3.4
%
 
Couche-Tard (Pantry)
 
86

 
3.4
%
 
7-Eleven
 
77

 
3.3
%
 
SunTrust
 
121

 
3.1
%
 
AMC Theatre
 
17

 
2.9
%
 
Bell American (Taco Bell)
 
115

 
2.8
%
 
Chuck E. Cheese's
 
53

 
2.6
%
 
BJ's Wholesale Club
 
8

 
2.4
%
 
Frisch's Restaurant
 
74

 
2.3
%
 
Gander Mountain
 
12

 
2.2
%
 
Bob Evans
 
117

 
2.0
%
 
Best Buy
 
19

 
2.0
%

Lease Expirations(2) 
 
 
% of
Total
(1)
 
# of
Properties
 
Gross Leasable
Area
(3)
 
 
 
% of
Total
(1)
 
# of
Properties
 
Gross Leasable Area (3)
2016
 
0.2
%
 
8

 
116,000

 
2022
 
5.8
%
 
103

 
1,301,000

2017
 
1.8
%
 
39

 
721,000

 
2023
 
2.6
%
 
86

 
1,016,000

2018
 
3.3
%
 
91

 
1,185,000

 
2024
 
2.7
%
 
50

 
885,000

2019
 
3.1
%
 
77

 
1,109,000

 
2025
 
5.2
%
 
131

 
1,110,000

2020
 
3.9
%
 
133

 
1,537,000

 
2026
 
6.1
%
 
178

 
1,830,000

2021
 
4.5
%
 
119

 
1,301,000

 
Thereafter
 
60.8
%
 
1,437

 
14,034,000


(1) 
Based on the annual base rent of $527,667,000, which is the annualized base rent for all leases in place as of September 30, 2016.
(2) 
As of September 30, 2016, the weighted average remaining lease term is 11.5 years.
(3) 
Square feet.










11
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