Investor Update
May 2015
Single Tenant Retail Property REIT with
25 Consecutive Years of Dividend Increases
Safe Harbor
This presentation contains certain statements that are the Company’s and
Management’s hopes, intentions, beliefs, expectations, or projections of the
future and might be considered to be forward-looking statements under Federal
Securities laws. Prospective investors are cautioned that any such forward-
looking statements are not guarantees of future performance, and involve risks
and uncertainties. The company’s actual future results may differ significantly
from the matters discussed in these forward-looking statements, and we may
not release revisions to these forward-looking statements to reflect changes
after we’ve made the statements. Factors and risks that could cause actual
results to differ materially from expectations are disclosed from time to time in
greater detail in the company’s filings with the SEC including, but not limited to,
the Company’s report on Form 10-K, as well as company press releases.
2
4
NNN’s Unique Long Term Strategy
Consistent Predictable
Earnings Growth with Low Volatility
Strong Investment Grade Balance Sheet
Elite Level Long-Term Total Returns
Summary – Attributes, Advantages &
Risk Mitigation
High quality portfolio produces consistent results
High occupancy through cycle
Strong lease renewal rates with very little capital expenditure (not buying-up rent)
Long term, net leases adds stability to operating results
Quality comes from sustainable rents (market rent is barometer)
Balance sheet conservatism
In place long before 2008-09 (no dilutive equity issuances needed)
Below average leverage and strong liquidity to weather all environments
Unencumbered portfolio
No reliance on short term debt to drive per share results
Fixed rate debt focused to mitigate rising rate risks
Existing scale provides
High diversification (2,000+ properties)
Top exposure to every single-tenant retail acquisition prospect in sector
Low cost of capital relative to competitors
Indicators of competitive advantage
Equity multiple, credit spreads, dividend yield, etc.
Institutional ownership
Track record of annual dividend increases (25 years)
5
Summary – Attributes, Advantages &
Risk Mitigation
Proven, tenured management team with domain expertise
Top six executives – average NNN tenure 15 years (range 10-32 years)
Next five SVPs – average NNN tenure 16 years (range 6-23 years)
Sustainable model
Projections – no heroic assumptions (acquisitions volume, debt tenor, capital
pricing, etc.)
Managed market expectations – not promising more than delivered in the past
Market cycle tested over many years
Focused investment strategy (single-tenant retail) – no strategy drift into
multiple property types
Operating results are consistent and predictable
Balance sheet never under stress
Management manages for the long term
Above average total returns over 1-, 3-, 5-, 10-,15-, 20-, and 25-years with below
average risk profile
6
Core Competency Focus:
Single Tenant Retail Properties
Why Retail? (vs. multiple property types)
Higher lease renewal probability – better risk-adjusted returns
Retail tenants are more particular location driven than non-retail
Retail tenants are not likely to risk disrupting established
customer base to save moderate amounts of rent in new location
Particular location less meaningful to office / industrial tenants
(more commodity space, same zip code may work fine)
Higher renewal rates result in lower vacancy and lower TI =
higher and more consistent returns
Good retail locations provide deeper market for replacement tenants
Why Selective Non-Investment Grade Tenants (vs. investment grade focus)
Better pricing – higher cap rate, lower investment
Better rent growth over lease term
Durability of tenant credit can be fleeting
Opportunity for tenant credit improvement
7
Strong Investment Grade Balance Sheet
Long-Term Track Record of Success
Q1 Highlights and Valuation
Low Risk Strategy Generates Consistent Growth
8
9
Focus on single-tenant net lease retail properties
Sustain high occupancy and maximize value of existing real estate assets
Maintain fully diversified portfolio
Grow through internal portfolio growth and well underwritten acquisitions
Utilize asset sales to manage risk, enhance value and partially finance
acquisitions
Preserve conservative balance sheet and financial flexibility through
access to multiple sources of capital and unsecured debt
Produce safe and growing dividends
Resulting in:
25 consecutive years of increased annual dividends
Total shareholder returns exceed REIT and general equity averages
over 1-, 5-, 10-, 15- and 20-year periods
Consistent and Simple Strategy
10
NNN’s Long-Term Retail Net Lease Strategy
Creates a Solid Foundation of Highly Predictable
Operating Income
NNN’s Disciplined Acquisition Approach
Generates Steady Earnings Growth Through
Higher Yields With Less Risk Than Development
and Other Acquisition Approaches
Strategy Generated 8+% FFO Per Share Growth in
2012, 2013 and 2014
11
Well selected retail tenants provide stronger performance through various economic
cycles than office, industrial or other tenant types.
Main street locations provide strong market for replacement tenants and rent
growth
Lower earnings volatility from higher occupancy (12 year low of 96.4%)
Retail properties more likely to renew lease at end of initial term
15-20-year terms, 11.5-year weighted average remaining lease term
Only 5.6% of leases expire through YE 2017
Tenants responsible for operating expenses, taxes and capital expenditures – no CAM
leakage
No anchor or co-tenancy issues for tenants to leverage into reduced rent
High Quality, Well-Diversified Portfolio
$5.6 billion total assets (gross book basis)
2,104 properties (23.1 million SF) in 47 states
400+ national and regional retail tenants
Top 25 tenants (60% of rent) average 1,612 stores each
Retail Net Lease Strategy Generates
a Reliable Income Stream with Low Volatility
NNN’s Strategy Results in
Higher Occupancy and Less Volatility
12
From 2003 – Q1 2015, NNN’s occupancy never fell below 96.4% while the REIT industry
average never rose above 94.0%.
Source: SNL Financial
85%
90%
95%
100%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 2015
NNN
REIT Industry (Ex Hotels & Health Care)
92.8%
90.8%
98.3%
97.4%
97.0%
92.1%
96.7%
92.0%
96.4%
90.5%
96.9%
90.1%
98.2%
93.5%
97.9%
90.7%
93.0% 93.5%
97.4%
98.3% 98.2%
92.0%
98.6%
92.0%
98.8%
*92.0%
*REIT Industry Average as of Q4 2014
NNN’s Acquisition Approach is Unique
Because It’s More Difficult
Acquisition quality over quantity requires selectivity, discipline and patience:
Small transactions in areas of historical expertise (retail) rather than
large portfolio transactions provides higher risk adjusted returns
Retail – NNN’s historical expertise generates higher and more
consistent operating results vs. other net lease and non-net lease
sectors
Approximately 25 relationships with managements of strong growing
retail concepts
Underwriting focuses on alternative uses upon future rollover and
current tenant strength
Multiple credit upgrades after NNN’s acquisition – 7-Eleven,
Sunoco, Bloomin’ Brands, Lowes, Susser, Wanda Group (AMC),
Advance Auto
Lease terms and conditions negotiated based on unique aspects of
location and tenant’s business and credit. Tenant “self selection”-
unlikely to sign a long-term lease on questionable store
13
NNN’s Unique Acquisition Approach
Generates Strong FFO Growth
Retail Net Lease market is very large yet has less buyer competition
than other property types because properties are smaller
NNN’s more focused relationship based acquisition approach is more
difficult and time consuming further resulting in less buyer competition
Less buyer competition results in higher initial cap rates and built in rent
growth (see page 15)
Careful targeting and underwriting of management and the future
prospects of our retail tenants is supported by:
Consistently high portfolio occupancy; and
Multiple credit upgrades realized by relationship tenants
Consistently high portfolio occupancy results in less earnings volatility
All of the above generate greater per share accretion from lower
acquisition volumes and allows NNN to continue to acquire accretively,
despite cap rate compression and increased interest rates
14
15
2010 – 2014 Acquisitions Volume
in $ Millions by Source
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
$600
$650
$700
$750
$800
$850
2010 2011 2012 2013 2014
Relationship @ 8.4% Average Cap Rate ($1,908 million = 64%)
Market / Auction @ 7.6% Average Cap Rate ($1,057 million = 36%)
Acquisition Source:
$238
$221
$17
$772
$552
$220
$707
$513
$194
$630
$293
$337
$333
$285
$618
Historical Acquisition Volume at Weighted Average Initial Cap Rates*
NNN Has Consistently Generated Strong Acquisition
Volumes at Significantly Higher Cap Rates
than Other REIT Property Types
* Plus approximately 1.5 % annual rent growth
$0
$100
$200
$300
$400
$500
$600
$700
$800
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
(Mil
lio
ns
) [Gu
ida
nc
e]
9.5%
9.5% 8.8%
9.0%
8.4%
9.4%
8.4%
8.3%
16
7.8% 7.5%
7.0%
Triple Net vs. Gross Lease Return Profile
NNN produces higher initial return with lower volatility than typical gross
lease investments
17
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Cap
Rate
(R
etu
rn)
Year
Net Lease Retail (1.5% NOI Growth) Gross Lease (2.7% NOI Growth) Flat Net Lease
Excludes volatility and lower
return from vacancy and tenant
improvements
Strong Investment Grade Balance Sheet
Long-Term Track Record of Success
Q1 Highlights and Valuation
Low Risk Strategy Generates Consistent Growth
18
Strong Investment Grade Balance Sheet –
Risk Management is a Core Competency
Investment-grade debt rating (BBB+ / Baa1 / BBB+) supported by industry
leading leverage ratios
99% of assets unencumbered - only $25.9 million of secured debt
Well-laddered debt maturities
$650 million unsecured bank credit line (accordion to $1.0 billion)
Outstanding balance of $41.9 million as of 3/31/15
Matures January 2019, plus one-year extension at NNN’s option
Priced at LIBOR + 92.5 bps
Raised $48.7 million of common equity in Q1 2015
Raised $350 million of common equity in 2014
19
Conservative Balance Sheet Management
(As of March 31, 2015- total gross book assets)
20
Secured debt - $25.9 million
Unsecured debt - $1,756.9 million
Preferred equity - $575.0 million
Common equity - $3,097.1 million
Total Capitalization: $5,454.9 million (gross book)
Interest coverage ratio: 4.6x
Fixed-Charge coverage ratio: 3.3x
Unsecured Debt
32.2%
Secured Debt 0.5%
Preferred Equity 10.5% Common
Equity 56.8%
Credit Metrics Summary
21
2010 2011 2012 2013 2014
March
2015
Total debt / Total assets (gross book) 39.2% 37.0% 37.5% 32.9% 32.6% 32.7%
Total debt + preferred / Total assets (gross book) 42.3% 39.5% 44.3% 44.9% 43.3% 43.2%
Market Cap Leverage 33.9% 33.3% 31.0% 28.2% 24.2% 23.9%
Debt / EBITDA (last quarter annualized) 5.5 5.3 5.1 4.3 4.2 4.3
Debt / EBITDA (last four quarters) 5.6 5.9 5.3 4.5 4.5 4.5
EBITDA / Interest expense (cash) 3.2 3.2 3.7 4.1 4.4 4.60
EBITDA / Fixed charges (cash) 2.9 2.9 3.0 3.1 3.1 3.30
Unencumbered assets / Total assets (gross book) 98% 99% 99% 99% 99% 99%
Bank line usage (millions) 161$ 66$ 174$ 46$ -$ 42$
Bank line availability (millions) 239$ 384$ 326$ 454$ 650$ 608$
Capital Raised:
Common equity (millions), net 18$ 521$ 183$ 264$ 350$ 49$
Preferred equity (millions), net -$ -$ 278$ 278$ -$ -$
Unsecured notes (millions), gross -$ 300$ 325$ 350$ 350$ -$
Secured debt (millions), gross 5$ -$ 7$ -$ 17$ -$
Property dispositions net proceeds 59$ 13$ 81$ 61$ 55$ 23$
Acquisition Funding (2011 – 2014)
22
Asset Sales $0.2
Acquisitions $2.7
Common Equity $1.3
Preferred Equity $0.6
Long-Term Debt, net $0.6
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
Sources Acquisitions
in b
illio
ns
Over past four years, 76% of acquisitions funded with permanent capital while growing AFFO per share 33% (7.4% per year)
76% of
acquisitions
funded with
permanent
capital
Debt / TTM EBITDA
Source: Citi Investment Research
23
NNN’s Lower Risk Operating Strategy is Complemented by it’s Low
Leverage Balance Sheet Strategy
0
2
4
6
8
10
12
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SS
SC
ON
ED
FT
CXW
SIR
LTC
COR
GTY
DEA
PSB
PSA
(March 31, 2015)
24
Well-Laddered Debt Maturities(a)
NNN’s Low Leverage Balance Sheet Strategy is Enhanced by it’s Well
Laddered Debt Maturities
5.2%
6.2%
5.9%
6.9%
5.8% 5.5%
5.7% 4.0%
3.4%
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
3.9%
(a) Excludes $650 million bank line of credit maturing January 2019 ($41.9 million at March 31, 2015)
NNN in a Rising Interest Rate Environment
NNN is better positioned to successfully execute its strategy than
its triple-net and non-triple net peers in a rising interest rate
environment
NNN’s historically higher acquisition cap rates (8.2% since 2010; 7.3% recent
acquisitions) create much more room for spread compression before
acquisitions cease being accretive
Less exposure to refinancing risk – from low leverage balance sheet
No floating rate debt - NNN bank line of credit which has zero outstanding
balance at 12/31/14
Less than $160 million of debt maturing through 2016 which can currently be
refinanced at lower interest rates ($150 million 6.25% notes due June 2014
were paid off with proceeds from $350 million 3.90% notes issued May 2014)
Well laddered debt maturities limits a particular year’s exposure to rate spikes
25
Strong Investment Grade Balance Sheet
Long-Term Track Record of Success
Q1 Highlights and Valuation
Low Risk Strategy Generates Consistent Growth
26
27
NNN Consistently Outperforms the
REIT Industry and the Major Indices
NNN Outperforms 1 Year 3 Years 5 Years 10 Years 15 Years 20 Years 25 Years
(NNN = $40.97 at 03/31/15)
National Retail Properties (NNN) 24.7% 20.2% 18.4% 14.9% 17.3% 14.4% 15.9%
Indices
* NAREIT Equity REIT Index (FNERTR) 22.7% 14.0% 15.6% 9.5% 12.8% 11.7% 11.6%
* Morgan Stanley REIT Index (RMS G) 24.2% 14.2% 15.9% 9.7% 12.7% 11.7% n/a
S&P 500 Index (SPX) 12.7% 16.0% 14.4% 8.0% 4.1% 9.4% 9.8%
Nasdaq (CCMP) 18.2% 18.2% 16.8% 10.6% 1.4% 10.2% 10.2%
* S&P 400 Index (MID) 12.1% 16.9% 15.7% 10.3% 9.1% 12.7% n/a
S&P 600 Index (SML) 8.7% 17.2% 16.2% 9.6% 9.7% 11.6% n/a
* Russell 1000 Index (RIY) 12.7% 16.4% 14.7% 8.3% 4.4% 9.6% 7.8%
* Russell 1000 Value Index (RLV) 9.3% 16.4% 13.7% 7.2% 6.5% 9.9% n/a
Russell 2000 Index (RTY) 8.2% 16.2% 14.5% 8.8% 7.2% 9.6% 8.5%
Russell 2000 Value Index (RUJ) 4.4% 14.7% 12.5% 7.5% 10.1% n/a n/a
* NNN is a member of this index (deleted from S&P 600 and added to S&P 400 in Dec. 2011; deleted from Russell 2000 and added to Russell 1000 in June 2012)
Long-Term Dividend History
$1.00
$1.10
$1.20
$1.30
$1.40
$1.50
$1.60
$1.70
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Div
ide
nd
s P
er
Sh
are
25 consecutive years of annual dividend increases –
Fourth longest of all public REITs and 98% of all public companies
28
NOTE: 2015 projected based on current dividend rate
Strong Investment Grade Balance Sheet
Long-Term Track Record of Success
Q1 Highlights and Valuation
Low Risk Strategy Generates Consistent Growth
29
30
Recurring FFO per share increased 5.9% to $0.54
Dividend yield at March 31, 2015 of 4.1%
Maintained high level of occupancy at 98.8%
Invested $155.2 million in 56 properties @ average 7.3% cap rate (initial cash yield)
Sold 6 properties for $23.3 million producing $7.1 million of gains on sale
(not included in FFO)
Generated 15.9% total return annually for the past 25 years
Increased dividend per share for 25th consecutive year
Reduced dividend payout to 76% of AFFO
Maintained significant balance sheet capacity for future acquisitions
Q1 Highlights and Valuation
Source: Citi Investment Research
NNN’s Multiple Does Not Reflect its Unique
Advantage of Low Risk / Consistent Growth
2015 AFFO Per Share Multiples
31
5
10
15
20
25
30
35
CBL
AR
CP
WP
GG
OV
SIR
GEO
CTR
E
MP
WLXP
CSG
SN
HSN
R
DFT
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PC
SR
CSB
RA
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EP
R
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HCP
STAG
OFC
RPT
NHI
STO
RD
LR
KRG
LPT
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CDR
LTC
BM
RFP
OVTR
PDM
NNN
MAA
CON
ED
DR
O QTS
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LI
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RT
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T
BXP
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PKY
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RC
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REIT Industry Dividend Yields
NNN’s Dividend Yield does not reflect its:
25 consecutive years of annual dividend increases with a falling
payout ratio;
Superior operating risk profile and growth strategy; and
Investment-grade debt rating (BBB+ / Baa1 / BBB+)
and sector leading leverage ratios.
Source: Citi Investment Research
32
0%
2%
4%
6%
8%
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NRF
SIR
SN
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WP
GG
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E.A
Appendix
33
NNN Attributes
Triple-net long-term leases
Small properties – typically $2 to $4 million investment size
High land value per asset
Net leases reduce volatility of returns – rent growth drops to bottom line
Large universe of investment opportunities
Fragmented non-institutional competition; NNN is a clear leader
Structured sale-leaseback acquisitions at great initial cap rates
Excellent capital recycling track record
Strong balance sheet with limited near-term maturities
Solid earnings profile with lower risk
25 consecutive years of increased annual dividends while reducing
payout ratio
34
Diversification Reduces Risk
2,104 Properties
400+ Tenants
47 States
(As a percentage of base rent – March 31, 2015)
South
24.1%
Rocky
Mountain
6.3%
West
4.4%
Northeast
14.6%
Southeast
27.5%
Midwest
23.1%
35
Lease Expirations
(As a percentage of base rent – March 31, 2015)
36
0%
10%
20%
30%
40%
50%
60%
70%
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
The
rea
fte
r
Weighted average remaining lease term of 11.5 years
Only 5.6% of leases expire through 2017
Acquisition Accretion
37
5.50%
6.00%
6.50%
7.00%
7.50%
8.00%
8.50%
9.00%
9.50%
- 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 650,000 700,000
Ca
p R
ate
Acquisition Volume ($000s)
Accretion Equivalents to First Half 2014 Acquisitions $186 million at 7.6% Cap Rate
(Leverage Neutral)
First Half 2014 Actual
All points on line create the same amount of
leverage neutral accretion per share
Cost of Capital
38
Driving Per Share Growth -- Cost of Capital Views
"Economic / Expected Return Cost" "Cash / Accounting Cost"
(inverse of FFO multiple driven)
Dividend yield 5.0%
Dividend per share growth 3.0 - 4.0%
FFO per share growth 4.0 - 5.0%
Weighting Cost Wtd Avg Weighting Cost Wtd Avg
Debt 33.2% 4.250% 1.41% Debt 33.2% 4.250% 1.41%
Preferred 11.3% 6.163% 0.70% Preferred 11.3% 6.163% 0.70%
Common 55.5% 8.500% 4.72% Common 55.5% 6.000% 3.33%
100.0% 6.82% 100.0% 5.44%
2007 through 2014:
87% of leases renewed – 221 leases out of 254 (97 tenants)
56% above prior rent, 29% below prior rent and 15% at prior rent
93% ($32.4 million) of prior rent ($34.9 million) – excluding 12 outliers, 98.4% of prior rent
$338k of T.I./capital expenditures – not inclined to “buy” higher rent
39
Historical Lease Renewals
23 Leases (95% of Prior) 19 Leases
(107% of Prior)
22 Leases (87% of Prior)
31 Leases (101% of Prior)
16 Leases (79% of Prior)
39 Leases (95% of Prior)
39 Leases (87% of Prior)
32 Leases (101% of Prior)
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
$5,500,000
$6,000,000
$6,500,000
$7,000,000
$7,500,000
$8,000,000
$8,500,000
2007 2008 2009 2010 2011 2012 2013 2014
T.I
. / C
ap
ital E
xp
en
dit
ure
s
An
nu
al
Ren
t
Prior Rent Renewal Rent T.I. / Capital Expenditures
Top 20 Lines of Trade
(As of March 31, 2015)
40
1. Convenience stores 17.7% 445 61 24
2. Restaurants - full service 9.0% 220 77 38
3. Automotive service 7.2% 187 14 25
4. Restaurants - limited service 6.9% 264 76 32
5. Theaters 5.1% 29 8 15
6. Family entertainment centers 5.1% 73 3 23
7. Automotive parts 4.6% 184 3 37
8. Health and fitness 3.8% 25 8 12
9. Sporting goods 3.7% 22 7 13
10. Banks 3.6% 124 5 10
11. RV dealers, parts and accessories 3.3% 28 1 17
12. Wholesale clubs 2.8% 7 1 5
13. Drug stores 2.4% 38 4 16
14. Consumer electronics 2.4% 20 2 13
15. Travel plazas 2.3% 29 7 9
16. Grocery 2.1% 23 12 15
17. Medical service providers 2.0% 53 16 13
18. Home improvement 1.9% 19 10 11
19. Home furnishings 1.8% 17 6 13
20. General merchandise 1.6% 55 14 15
Other 10.7% 242 111 44
Total 100.0% 2,104
Number of
Tenants
Number of
StatesLine of Trade
Percentage
of Base Rent
Number of
Properties
Line of Trade Concentrations
(Concentrations over 10% as a percentage of base rent: 1996 – March, 31 2015)
41
26
.7%
19
.5%
18
.9%
14
.9%
14
.1%
13
.9%
11
.1%
10
.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
ConvenienceStores
Books Restaurants Drug Stores Grocery ConsumerElectronics
Sporting Goods Office Supplies
03-31-15 Maximum Minimum
Top Tenants
42
Rent Coverage
Range 1.9x -- 4.5x
Average 2.9x
Weighted Average 3.1x
Fixed Charge Coverage
Range 1.4x -- 3.6x
Average 2.2x
Weighted Average 2.3x
Properties % Base Rent
Energy Transfer Partners (Sunoco) 125 6.4%
Mister Car Wash 87 4.5%
Pantry 86 3.9%
7-Eleven 78 3.9%
LA Fitness 22 3.8%
SunTrust 121 3.5%
Camping World 28 3.3%
AMC Theatre 15 3.1%
Chuck E. Cheese's 53 3.0%
BJ's Wholesale Club 7 2.8%
Gander Mountain 11 2.4%
Best Buy 19 2.3%
NNN Acquisitions Approach
has Multiple Advantages
Acquiring properties directly from tenants produces more efficient pricing
and higher initial returns
NNN assesses discrete risks vs.
More risks/unknowns in value-add, development, or
Typical lower yielding real estate investment
Each deal is structured based on its unique characteristics:
Real estate attributes, tenant corporate credit analysis, asset (store)
level data
43
NNN Approach to Net Lease Acquisitions
Real Estate
Attributes Corporate
Credit
Competitive positioning
Management team track
record / vision
Credit analysis / leverage
profile
Pending maturities
Use of transaction
proceeds
Fixed charge and rent
coverage
Property location
Underlying land value
Area demographics
Market rent / similar
transaction comparables
Location of competitors
Alternative use
Replacement cost analysis
Local market conditions
Parking
Access
Co-tenants
Visibility
Traffic counts
Age of improvements
Historical sales and
profitability
Sales & Profit trends
Revenue drivers and margins
Rent as a % of Sales
Corp. G & A allocation
Rent coverage
Comparison with similar
stores
Remaining lease term
Newest prototype
Capital markets
environment
Current conditions in
tenants’ industry /
market(s)
Local and national
economy
NNN cost of capital
Cap rate trends
Legislative risk
Transaction
Proceeds &
Terms
Asset-Level
Performance
Market
Conditions
Due Diligence and Determination of Proceeds & Terms
The chart to the right summarizes our areas of focus, which: a) determine our interest in a transaction, and b) drive our specific negotiation of the terms, rates and proceeds for each deal
This sale-leaseback approach to acquisitions produces multiple advantages for NNN versus many of our REIT peers, and particularly our shopping center / mall REIT competitors
Our ability to assess these discrete risks in a single-tenant, sale-leaseback transaction has allowed us to execute transactions with very efficient pricing, higher initial returns and more stable cash flows versus the higher and greater unknowns associated with: a) value-add investing, b) new construction / development transactions, and / or, c) lower-yielding, core retail investment strategies
44
Highly productive proprietary www.nnn1031.com website enables property
sales at premium retail pricing, at volumes far above other triple-net
sellers:
Standardizes downloadable due diligence information and contracts
Technologically sophisticated but user friendly
Low cost to maintain
Since 2005, sold 421 properties generating net proceeds over $1.3 billion
Disposition expertise provides ability to sell properties:
That do not meet hold criteria
To better control tenant and line of trade concentrations
Making NNN a more attractive buyer
Enhances acquisitions returns via higher effective cap rate on
retained properties
45
NNN’s Proven Disposition Platform –
Strengthens Portfolio Quality and Long-Term Earning by
Reinvesting at Higher Return Rates
National Retail Properties, Inc.
(NYSE: NNN)
800-NNN-REIT
www.nnnreit.com
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