NNN REIT, Inc. (NNN) Q3 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

We also leased seven new properties to new tenants at rates of 124% of previous rents, demonstrating strong demand and execution. Our asset management team and leasing team have done a fantastic job getting deals done at a high level. Our tenant base remains stable, no material concerns at this time. Moving to acquisitions, during the quarter we invested $283,057,000 in new assets, an initial cap rate of 7.3. with an average lease duration nearly 18 years due to the sale-leaseback nature of our deals. The first nine months, we've invested $750 million in 184 properties. The cash cap rate is 7.4, which has NNN tracked into a record year of acquisition volume. As we've moved through the year, cap rates, for the most part, have stabilized, and I don't see any material way either up or down as we head into the fourth quarter and for the deals we were pricing for the first quarter of 2026. As one of the original net lease companies in the public markets, NNN has successfully operated through diverse economic cycles. While private capital has increased competition, especially for the large portfolios, our disciplined approach and long-standing tenant relationships enable us to consistently execute and deliver a highly competitive environment. During the quarter, we sold 23 properties, 11 of which were vacant, generating $41 million in proceeds for redeployment into income-producing properties. Also, the properties we sold were not core assets, and the sales were executed at approximately 145 basis points below our invested cash cap rate, demonstrating strong upfront underwriting and value extraction. Our balance sheet is one of the strongest in the sector. Our credit facility has plenty of capacity, as I mentioned earlier, with no balance outstanding, and we maintain the i...