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Section 1: 8-K (FORM 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 1, 2018
 
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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
         




Item 2.02.
Results of Operations and Financial Condition.
On November 1, 2018 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, 2018. 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

  




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 1, 2018
 
By:
 
/s/ Kevin B. Habicht
 
 
 
 
Kevin B. Habicht
 
 
 
 
Executive Vice President and Chief Financial Officer






EXHIBIT INDEX
 
 
 
 
Exhibit No.
  
Description
 
 
99.1
  


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit

395592312_nnnlogo20180630a02.jpg    

NEWS RELEASE
For information contact:
Kevin B. Habicht
Chief Financial Officer
(407) 265-7348    FOR IMMEDIATE RELEASE
November 1, 2018

THIRD QUARTER 2018 OPERATING RESULTS AND 2019 GUIDANCE
ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.

Orlando, Florida, November 1, 2018 – 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, 2018. 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,
 
2018
 
2017
 
2018
 
2017
 
(in thousands, except per share data)
Revenues
$
155,331

 
$
147,705

 
$
463,683

 
$
434,686

 
 
 
 
 
 
 
 
Net earnings available to common stockholders
$
73,450

 
$
52,538

 
$
230,140

 
$
153,606

Net earnings per common share
$
0.47

 
$
0.35

 
$
1.48

 
$
1.03

 
 
 
 
 
 
 
 
FFO available to common stockholders
$
105,134

 
$
97,760

 
$
312,847

 
$
263,911

FFO per common share
$
0.67

 
$
0.65

 
$
2.02

 
$
1.78

 
 
 
 
 
 
 
 
Core FFO available to common stockholders
$
105,356

 
$
97,985

 
$
313,590

 
$
281,532

Core FFO per common share
$
0.67

 
$
0.65

 
$
2.02

 
$
1.90

 
 
 
 
 
 
 
 
AFFO available to common stockholders
$
106,997

 
$
97,934

 
$
315,180

 
$
283,391

AFFO per common share
$
0.68

 
$
0.65

 
$
2.03

 
$
1.91


Third Quarter 2018 Highlights:
FFO and Core FFO per common share increased 3.1% over prior year results
AFFO per common share increased 4.6% over prior year results
Portfolio occupancy was 98.7% at September 30, 2018 as compared to 98.5% on June 30, 2018 and 99.2% on March 31, 2018
Invested $78.6 million in property investments, including the acquisition of 18 properties with an aggregate 529,000 square feet of gross leasable area at an initial cash yield of 6.9%
Sold 18 properties for $37.6 million producing $14.3 million of gains on sales
Raised $87.2 million net proceeds from the issuance of 1,940,583 common shares
Issued $400 million principal amount of 4.30% senior unsecured notes due 2028 generating net proceeds of $393.5 million
Issued $300 million principal amount of 4.80% senior unsecured notes due 2048 generating net proceeds of $292.4 million




Highlights for the nine months ended September 30, 2018:
FFO per share increased 13.5% over prior year results
Core FFO and AFFO per share increased 6.3% over prior year results
Invested $396.1 million in property investments, including the acquisition of 129 properties with an aggregate 1,265,000 square feet of gross leasable area at an initial cash yield of 6.9%
Sold 46 properties for $121.1 million producing $57.1 million of gains on sales
Raised $903.6 million of new long-term capital at attractive pricing
Raised $217.7 million in net proceeds from the issuance of 5,122,044 common shares
Raised $393.5 million in net proceeds from the issuance of 4.30% senior unsecured notes due 2028
Raised $292.4 million in net proceeds from the issuance of 4.80% senior unsecured notes due 2048

Core FFO guidance mid-point for 2018 was increased from a range of $2.62 to $2.66 to a range of $2.64 to $2.66 per share. The 2018 AFFO is estimated to be $2.66 to $2.68 per share. The Core FFO guidance equates to net earnings of $1.53 to $1.55 per share, plus $1.11 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate, and any charges for impairments, retirement severance costs and $18.2 million make-whole charge in connection with redeeming $300 million of 5.50% notes due 2021. 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.

The company also announced 2019 Core FFO guidance of $2.71 to $2.76 per share and estimated 2019 AFFO to be $2.76 to $2.81 per share. The Core FFO guidance equates to net earnings of $1.60 to $1.65 per share, plus $1.11 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate, and any charges for impairments and retirement severance costs. 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.

Jay Whitehurst, Chief Executive Officer, commented: “National Retail Properties continued its consistent performance in the third quarter. Our ability to access almost $800M of long-term capital at very attractive pricing positions us well to address future opportunities and challenges. We are pleased to raise the mid-point of our guidance for 2018 and to introduce 2019 guidance, which reflects our strategic focus on consistently growing per share results on a multi-year basis.”

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2018, the company owned 2,847 properties in 48 states with a gross leasable area of approximately 29.7 million square feet and with a weighted average remaining lease term of 11.4 years. For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on November 1, 2018, 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, and, risks related to the company's status as a REIT. 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 (the "Commission”) 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 Commission. 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 Commission for the quarter and nine months ended September 30, 2018. 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

2


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.

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,
 
 
2018
 
2017
 
2018
 
2017
Income Statement Summary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
Rental and earned income
 
$
150,944

 
$
143,856

 
$
450,930

 
$
422,895

Real estate expense reimbursement from tenants
 
3,712

 
3,614

 
11,640

 
11,174

Interest and other income from real estate transactions
 
675

 
235

 
1,113

 
617

 
 
155,331

 
147,705

 
463,683

 
434,686

 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
General and administrative
 
8,543

 
7,354

 
25,980

 
25,093

Real estate
 
5,759

 
5,553

 
17,449

 
16,640

Depreciation and amortization
 
42,479

 
48,409

 
130,280

 
129,878

Impairment losses – real estate and other charges, net of recoveries
 
3,635

 
80

 
9,718

 
1,247

Retirement severance costs
 
222

 
225

 
743

 
7,653

 
 
60,638

 
61,621

 
184,170

 
180,511

 
 
 
 
 
 
 
 
 
Other expenses (revenues):
 
 
 
 
 
 
 
 
Interest and other income
 
(195
)
 
(64
)
 
(258
)
 
(239
)
Interest expense
 
27,194

 
28,204

 
80,906

 
82,092

 
 
26,999

 
28,140

 
80,648

 
81,853

 
 
 
 
 
 
 
 
 
Earnings before gain on disposition of real estate
 
67,694

 
57,944

 
198,865

 
172,322

 
 
 
 
 
 
 
 
 
Gain on disposition of real estate
 
14,348

 
3,185

 
57,050

 
20,864

 
 
 
 
 
 
 
 
 
Earnings including noncontrolling interests
 
82,042

 
61,129

 
255,915

 
193,186

 
 
 
 
 
 
 
 
 
Earnings attributable to noncontrolling interests
 
(10
)
 
(9
)
 
(29
)
 
(381
)
 
 
 
 
 
 
 
 
 
Net earnings attributable to NNN
 
82,032

 
61,120

 
255,886

 
192,805

Series D preferred stock dividends
 

 

 

 
(3,598
)
Series E preferred stock dividends
 
(4,097
)
 
(4,097
)
 
(12,291
)
 
(12,291
)
Series F preferred stock dividends
 
(4,485
)
 
(4,485
)
 
(13,455
)
 
(13,455
)
Excess of redemption value over carrying value of Series D
   preferred shares redeemed
 

 

 

 
(9,855
)
Net earnings available to common stockholders
 
$
73,450

 
$
52,538

 
$
230,140

 
$
153,606

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
156,853

 
149,341

 
154,582

 
148,223

Diluted
 
157,286

 
149,668

 
155,008

 
148,526

 
 
 
 
 
 
 
 
 
Net earnings per share available to common stockholders:
 
 
 
 
 
 
 
 
Basic
 
$
0.47

 
$
0.35

 
$
1.49

 
$
1.03

Diluted
 
$
0.47

 
$
0.35

 
$
1.48

 
$
1.03


4


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

 
 
Quarter Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2018
 
2017
 
2018
 
2017
Funds From Operations (FFO) Reconciliation:
 
 
 
 
 
 
 
 
Net earnings available to common stockholders
 
$
73,450

 
$
52,538

 
$
230,140

 
$
153,606

Real estate depreciation and amortization
 
42,397

 
48,329

 
130,039

 
129,640

Gain on disposition of real estate
 
(14,348
)
 
(3,185
)
 
(57,050
)
 
(20,467
)
Impairment losses – depreciable real estate, net of recoveries
 
3,635

 
78

 
9,718

 
1,132

Total FFO adjustments
 
31,684

 
45,222

 
82,707

 
110,305

FFO available to common stockholders
 
$
105,134

 
$
97,760

 
$
312,847

 
$
263,911

 
 
 
 
 
 
 
 
 
FFO per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.67

 
$
0.65

 
$
2.02

 
$
1.78

Diluted
 
$
0.67

 
$
0.65

 
$
2.02

 
$
1.78

 
 
 
 
 
 
 
 
 
Core Funds From Operations Reconciliation:
 
 
 
 
 
 
 
 
Net earnings available to common stockholders
 
$
73,450

 
$
52,538

 
$
230,140

 
$
153,606

Total FFO adjustments
 
31,684

 
45,222

 
82,707

 
110,305

FFO available to common stockholders
 
105,134

 
97,760

 
312,847

 
263,911

 
 
 
 
 
 
 
 
 
Excess of redemption value over carrying value of preferred share redemption
 

 

 

 
9,855

Impairment losses – non-depreciable real estate
 

 

 

 
113

Retirement severance costs
 
222

 
225

 
743

 
7,653

Total Core FFO adjustments
 
222

 
225

 
743

 
17,621

Core FFO available to common stockholders
 
$
105,356

 
$
97,985

 
$
313,590

 
$
281,532

 
 
 
 
 
 
 
 
 
Core FFO per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.67

 
$
0.66

 
$
2.03

 
$
1.90

Diluted
 
$
0.67

 
$
0.65

 
$
2.02

 
$
1.90

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

5


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

 
 
Quarter Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2018
 
2017
 
2018
 
2017
Adjusted Funds From Operations (AFFO) Reconciliation:
 
 
 
 
 
 
 
 
Net earnings available to common stockholders
 
$
73,450

 
$
52,538

 
$
230,140

 
$
153,606

Total FFO adjustments
 
31,684

 
45,222

 
82,707

 
110,305

Total Core FFO adjustments
 
222

 
225

 
743

 
17,621

Core FFO available to common stockholders
 
105,356

 
97,985

 
313,590

 
281,532

 
 
 
 
 
 
 
 
 
Straight line accrued rent
 
59

 
(295
)
 
(871
)
 
(1,199
)
Net capital lease rent adjustment
 
192

 
218

 
655

 
661

Below-market rent amortization
 
(219
)
 
(1,355
)
 
(2,334
)
 
(2,696
)
Stock based compensation expense
 
2,205

 
1,962

 
6,640

 
6,787

Capitalized interest expense
 
(596
)
 
(581
)
 
(2,500
)
 
(1,694
)
Total AFFO adjustments
 
1,641

 
(51
)
 
1,590

 
1,859

AFFO available to common stockholders
 
$
106,997

 
$
97,934

 
$
315,180

 
$
283,391

 
 
 
 
 
 
 
 
 
AFFO per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.68

 
$
0.66

 
$
2.04

 
$
1.91

Diluted
 
$
0.68

 
$
0.65

 
$
2.03

 
$
1.91

 
 
 
 
 
 
 
 
 
Other Information:
 
 
 
 
 
 
 
 
Percentage rent
 
$
284

 
$
239

 
$
1,018

 
$
985

Amortization of debt costs
 
$
913

 
$
884

 
$
2,695

 
$
2,611

Scheduled debt principal amortization (excluding maturities)
 
$
134

 
$
127

 
$
400

 
$
379

Non-real estate depreciation expense
 
$
84

 
$
82

 
$
249

 
$
246


Earnings Guidance:
 
 
 
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.
 
 
2018 Guidance 
 
2019 Guidance 
  Net earnings per common share excluding any gains on sale of real estate, impairment charges, retirement severance costs or 2021 note redemption charge
 
$1.53 - $1.55 per share
 
$1.60 - $1.65 per share
  Real estate depreciation and amortization per share
 
$1.11 per share
 
$1.11 per share
Core FFO per share
 
$2.64 - $2.66 per share
 
$2.71 - $2.76 per share
  AFFO per share
 
$2.66 - $2.68 per share
 
$2.76 - $2.81 per share
  G&A expenses (excluding retirement severance costs)
 
$34.0 - $34.5 Million
 
$35.5 - $36.5 Million
  Real estate expenses, net of tenant reimbursements
 
$8.0 - $8.5 Million
 
$8.5 - $9.0 Million
  Acquisition volume
 
$600 - $700 Million
 
$550 - $650 Million
  Disposition volume
 
$120 - $140 Million
 
$80 - $120 Million


6


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

 
 
September 30, 2018
 
December 31, 2017
Balance Sheet Summary
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
Real estate:
 
 
 
 
Accounted for using the operating method, net of accumulated depreciation and amortization
 
$
6,624,165

 
$
6,426,602

Accounted for using the direct financing method
 
8,688

 
9,650

Real estate held for sale
 
3,309

 
6,409

Cash and cash equivalents
 
607,672

 
1,364

Receivables, net of allowance
 
2,171

 
4,317

Accrued rental income, net of allowance
 
25,687

 
25,916

Debt costs, net of accumulated amortization
 
4,426

 
5,380

Other assets
 
82,605

 
80,896

Total assets
 
$
7,358,723

 
$
6,560,534

 
 
 
 
 
Liabilities:
 
 
 
 
Line of credit payable
 
$

 
$
120,500

 Mortgages payable, including unamortized premium and net of unamortized debt cost
 
12,849

 
13,300

 Notes payable, net of unamortized discount and unamortized debt costs
 
3,135,311

 
2,446,407

Accrued interest payable
 
35,298

 
20,311

Other liabilities
 
98,045

 
119,106

Total liabilities
 
3,281,503

 
2,719,624

 
 
 
 
 
Stockholders' equity of NNN
 
4,076,874

 
3,840,593

Noncontrolling interests
 
346

 
317

Total equity
 
4,077,220

 
3,840,910

 
 
 
 
 
Total liabilities and equity
 
$
7,358,723

 
$
6,560,534

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common shares outstanding
 
158,933

 
153,577

 
 
 
 
 
Gross leasable area, Property Portfolio (square feet)
 
29,739

 
29,093

 
 
 
 
 


7


National Retail Properties, Inc.
Debt Summary
As of September 30, 2018
(in thousands)
(unaudited)
Unsecured Debt
 
Principal
 
Principal, Net of Unamortized Discount
 
Stated Rate
 
Effective Rate
 
Maturity Date
Line of credit payable
 
$

 
$

 
L + 87.5 bps

 
2.815
%
 
   January 2022
 
 
 
 
 
 
 
 
 
 
 
Unsecured notes payable:
 
 
 
 
 
 
 
 
 
 
2021
 
300,000

 
298,560

 
5.500
%
 
5.689
%
 
   July 2021
2022
 
325,000

 
322,775

 
3.800
%
 
3.985
%
 
   October 2022
2023
 
350,000

 
348,714

 
3.300
%
 
3.388
%
 
   April 2023
2024
 
350,000

 
349,566

 
3.900
%
 
3.924
%
 
   June 2024
2025
 
400,000

 
399,279

 
4.000
%
 
4.029
%
 
   November 2025
2026
 
350,000

 
346,733

 
3.600
%
 
3.733
%
 
   December 2026
2027
 
400,000

 
398,515

 
3.500
%
 
3.548
%
 
   October 2027
2028
 
400,000

 
397,161

 
4.300
%
 
4.388
%
 
   October 2028
2048
 
300,000

 
295,763

 
4.800
%
 
4.890
%
 
   October 2048
Total
 
3,175,000

 
3,157,066

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total unsecured debt(1)
 
$
3,175,000

 
$
3,157,066

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Debt costs
 
 
 
(29,707
)
 
 
 
 
 
 
Accumulated amortization
 
7,952

 
 
 
 
 
 
Debt costs, net of accumulated amortization
 
(21,755)
 
 
 
 
 
 
Notes payable, net of unamortized discount and unamortized debt costs
 
$
3,135,311

 
 
 
 
 
 
(1)  Unsecured notes payable have a weighted average interest rate of 4.1% and a weighted average maturity of 9.0 years.
      Pro forma impact for the October 19, 2018 redemption of $300 million of the 5.500% notes due 2021 results in a weighted
     average interest rate of 4.0% and a weighted average maturity of 9.6 years.

Mortgages Payable
 
Principal Balance
 
Interest Rate
 
Maturity Date
 
Mortgage(1)
 
12,927

 
5.2
%
 
   July 2023
 
 
 
 
 
 
 
 
 
Debt costs
 
(147
)
 
 
 
 
 
Accumulated amortization
 
69

 
 
 
 
 
Debt costs, net of accumulated amortization
 
(78)
 
 
 
 
 
Mortgages payable, including unamortized premium and net of unamortized debt costs
 
$
12,849

 
 
 
 
 
(1)   Includes unamortized premium
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8


National Retail Properties, Inc.
Property Portfolio

Top 20 Lines of Trade
 
 
 
 
As of September 30,
 
 
 
Line of Trade
 
2018(1)
 
2017(2)
 
1.
 
Convenience stores
 
18.5
%
 
18.3
%
 
2.
 
Restaurants – full service
 
11.8
%
 
11.8
%
 
3.
 
Restaurants – limited service
 
7.8
%
 
7.9
%
 
4.
 
Automotive service
 
7.6
%
 
7.0
%
 
5.
 
Family entertainment centers
 
7.0
%
 
6.4
%
 
6.
 
Health and fitness
 
5.6
%
 
5.6
%
 
7.
 
Theaters
 
5.1
%
 
4.8
%
 
8.
 
Automotive parts
 
3.5
%
 
3.7
%
 
9.
 
Recreational vehicle dealers, parts and accessories
 
3.0
%
 
3.4
%
 
10.
 
Wholesale clubs
 
2.4
%
 
2.3
%
 
11.
 
Medical service providers
 
2.3
%
 
2.5
%
 
12.
 
Home improvement
 
2.2
%
 
1.9
%
 
13.
 
Equipment rental
 
1.9
%
 
0.7
%
 
14.
 
Drug stores
 
1.8
%
 
2.1
%
 
15.
 
Furniture
 
1.8
%
 
1.9
%
 
16.
 
General merchandise
 
1.8
%
 
1.9
%
 
17.
 
Bank
 
1.7
%
 
2.6
%
 
18.
 
Travel plazas
 
1.7
%
 
1.9
%
 
19.
 
Consumer electronics
 
1.7
%
 
1.9
%
 
20.
 
Home furnishings
 
1.5
%
 
1.6
%
 
 
 
Other
 
9.3
%
 
9.8
%
 
 
 
Total
 
100.0
%
 
100.0
%
 

Top 10 States
 
State
 
 
% of Total(1)
 
 
State
 
 
% of Total(1)
 
1.
Texas
 
 
17.9
%
 
6.
Georgia
 
 
4.6
%
 
2.
Florida
 
 
8.9
%
 
7.
Tennessee
 
 
4.0
%
 
3.
Ohio
 
 
5.7
%
 
8.
Indiana
 
 
3.8
%
 
4.
Illinois
 
 
5.2
%
 
9.
Virginia
 
 
3.8
%
 
5.
North Carolina
 
 
4.7
%
 
10.
Alabama
 
 
3.1
%
 
 
(1) Based on the annualized base rent for all leases in place as of September 30, 2018.
 
 
(2) Based on the annualized base rent for all leases in place as of September 30, 2017.
 




9


National Retail Properties, Inc.
Property Portfolio

Top Tenants ( ≥ 2.0%)
 
 
 
Properties
 
% of Total(1)
 
7-Eleven
 
140

 
5.5
%
 
Mister Car Wash
 
96

 
4.0
%
 
LA Fitness
 
30

 
4.0
%
 
Camping World
 
40

 
3.9
%
 
GPM Investments (Convenience Stores)
 
151

 
3.7
%
 
AMC Theatre
 
20

 
3.3
%
 
Couche Tard (Pantry)
 
85

 
3.1
%
 
Bell American (Taco Bell)
 
116

 
2.6
%
 
Sunoco
 
61

 
2.5
%
 
BJ's Wholesale Club
 
9

 
2.4
%
 
Chuck E. Cheese's
 
53

 
2.3
%
 
Frisch's Restaurant
 
74

 
2.0
%

Lease Expirations(2) 
 
 
% of
Total
(1)
 
# of
Properties
 
Gross Leasable
Area
(3)
 
 
 
% of
Total
(1)
 
# of
Properties
 
Gross Leasable Area(3)
2018
 
0.3
%
 
13

 
277,000

 
2024
 
2.5
%
 
60

 
1,012,000

2019
 
2.1
%
 
62

 
862,000

 
2025
 
4.6
%
 
130

 
1,136,000

2020
 
3.1
%
 
115

 
1,492,000

 
2026
 
5.3
%
 
181

 
1,838,000

2021
 
3.9
%
 
121

 
1,303,000

 
2027
 
8.1
%
 
192

 
2,665,000

2022
 
6.1
%
 
123

 
1,649,000

 
2028
 
5.2
%
 
166

 
1,248,000

2023
 
3.0
%
 
114

 
1,446,000

 
Thereafter
 
55.8
%
 
1,528

 
14,368,000


(1) 
Based on the annual base rent of $609,744,000, which is the annualized base rent for all leases in place as of September 30, 2018.
(2) 
As of September 30, 2018, the weighted average remaining lease term is 11.4 years.
(3) 
Square feet.










10
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