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1. Company Snapshot

1.a. Company Description

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases.As of September 30, 2020, the company owned 3,114 properties in 48 states with a gross leasable area of approximately 32.4 million square feet and with a weighted average remaining lease term of 10.7 years.

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1.b. Last Insights on NNN

National Retail Properties' recent performance has been driven by its strong financial position, high occupancy rates, and reliable cash flow. The company's focus on retail properties with triple-net leases ensures tenants cover taxes, maintenance, and insurance, providing stable income and growth opportunities. NNN's solid balance sheet, minimal short-term debt, and high dividend yield of 5.4% make it an attractive investment. The REIT's portfolio is expanding steadily through acquisitions, maintaining high occupancy rates and reliable cash flow for passive income investors. Additionally, NNN's recent pricing of $500 million of 4.600% senior unsecured notes due 2031 demonstrates its ability to access capital markets and maintain a strong financial position.

1.c. Company Highlights

2. NNN REIT's Strong Q3 2025 Earnings: A Reflection of its Disciplined Growth Strategy

NNN REIT reported a robust financial performance in the third quarter of 2025, with core FFO per share beating expectations. The company's actual EPS came out at $0.86, in line with analysts' estimates. The strong performance was driven by its disciplined growth strategy, with the company closing 20 deals containing 57 assets for $283 million. The initial cap rate on these new assets was 7.3%, with an average lease duration of nearly 18 years.

Publication Date: Nov -09

📋 Highlights
  • Guidance Raised:: Core FFO/share updated to $3.36–$3.40, with acquisition value midpoint at $900M (all-time high).
  • Deal Activity:: Closed 20 deals (57 assets) for $283M at 7.3% cap rate, with 18-year average lease duration.
  • Balance Sheet Strength:: $1.4B liquidity, no floating rate debt, and $500M secured in new financing post-At Home restructuring.
  • Rental Growth & Renewals:: Portfolio of 3,697 properties achieved 108% rent increase and 92% renewal rate (vs. 85% historical).
  • Debt Reduction & Vacancy Resolutions:: Eliminated $2B in funded debt; 12 restaurant vacancies to resolve by year-end, 10 furniture vacancies pending.

Financial Performance

The company's revenues are expected to grow at 4.3% next year, according to analysts' estimates. NNN REIT's financial performance was also reflected in its updated guidance, with core FFO per share expected to be in the range of $3.36 to $3.40 and AFFO per share in the range of $3.41 to $3.45. The company's acquisition volume is expected to be $850 million to $950 million, with dispositions expected to be $170 million to $200 million.

Balance Sheet Strength

NNN REIT's balance sheet remains strong, with $1.4 billion of liquidity, no floating rate debt, and no encumbered assets. The company's proactive risk management approach was demonstrated through the successful restructuring of At Home, elimination of nearly $2 billion of funded debt, and securing $500 million in new financing. As Stephen Horn mentioned, "NNN's balance sheet remains strong, with $1.4 billion of liquidity, no floating rate debt, and no encumbered assets."

Valuation

NNN REIT's valuation metrics indicate a relatively stable position, with a P/E Ratio of 19.36, P/B Ratio of 1.74, and Dividend Yield of 5.8%. The company's EV/EBITDA ratio is 9.16, indicating a reasonable valuation. With a strong balance sheet and a disciplined growth strategy, NNN REIT is well-positioned for continued success.

Growth Prospects

The company is seeing opportunities in the auto services and auto parts sectors, with tenants pushing them to do more deals. However, as Stephen Horn noted, "it's not a significant jump in acquisition volume." NNN REIT's portfolio is in good shape, with limited bad debt so far this year, and bad debt assumptions have been reduced to 25 basis points for the full year.

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Real Estate Investment Trust

Expected Growth: 4.0%

National Retail Properties, Inc.'s 4.0% growth is driven by increasing demand for retail space, strategic acquisitions, and a strong portfolio of properties with high occupancy rates. Additionally, the company's diversified tenant base, long-term leases, and investment-grade credit rating contribute to its stable cash flows and growth potential.

7. Detailed Products

Retail Properties

National Retail Properties, Inc. invests in and owns a diversified portfolio of retail properties, including convenience stores, restaurants, and other retail establishments.

Net Lease Properties

The company acquires and owns net lease properties, which are typically single-tenant properties with long-term leases.

Triple-Net Lease Properties

National Retail Properties, Inc. invests in triple-net lease properties, where the tenant is responsible for property taxes, insurance, and maintenance.

Real Estate Investment Trust (REIT) Services

The company operates as a REIT, providing a range of services including property management, leasing, and asset management.

8. National Retail Properties, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

National Retail Properties, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's diversified portfolio of retail properties.

Bargaining Power Of Customers

National Retail Properties, Inc. has a large and diversified tenant base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

National Retail Properties, Inc. relies on a network of suppliers for maintenance, repairs, and construction services, but the company's scale and diversification mitigate the bargaining power of suppliers.

Threat Of New Entrants

The retail real estate industry is highly competitive, and new entrants can easily enter the market, posing a significant threat to National Retail Properties, Inc.'s market share.

Intensity Of Rivalry

The retail real estate industry is highly competitive, and National Retail Properties, Inc. faces intense rivalry from other real estate investment trusts (REITs) and private companies.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.19%
Debt Cost 6.46%
Equity Weight 48.81%
Equity Cost 8.87%
WACC 7.64%
Leverage 104.88%

11. Quality Control: National Retail Properties, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Brixmor Property Group

A-Score: 6.6/10

Value: 4.2

Growth: 5.2

Quality: 7.9

Yield: 8.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

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Four Corners Property Trust

A-Score: 6.5/10

Value: 4.8

Growth: 5.8

Quality: 6.0

Yield: 10.0

Momentum: 2.5

Volatility: 10.0

1-Year Total Return ->

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National Retail Properties

A-Score: 6.4/10

Value: 4.5

Growth: 4.1

Quality: 8.1

Yield: 9.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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Regency Centers

A-Score: 6.2/10

Value: 2.9

Growth: 4.3

Quality: 6.7

Yield: 8.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Tanger Factory Outlet

A-Score: 5.8/10

Value: 2.6

Growth: 4.6

Quality: 6.6

Yield: 7.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

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SITE Centers

A-Score: 5.7/10

Value: 8.2

Growth: 3.7

Quality: 7.5

Yield: 10.0

Momentum: 0.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

40.22$

Current Price

40.23$

Potential

-0.00%

Expected Cash-Flows