NNN REIT (NNN) Q3 2024 earnings summary

Executive summary

• Delivered consistent Q3 2024 performance with FFO and Core FFO per share up 3.7% year-over-year, driven by active portfolio management, strategic acquisitions, and relationship-driven deal sourcing.

• Maintained 99.3% occupancy and a 10-year weighted average lease term as of September 30, 2024.

• Invested $113.6 million in Q3 and $350 million year-to-date in property acquisitions at initial cash cap rates of 7.6% and 7.8%, respectively.

• Raised $178.9 million in Q3 and $213.7 million year-to-date from common share issuances, the largest quarter since 2019.

• Sold nine properties in Q3 for $20 million, generating $7.8 million in gains.

Financial highlights

• Q3 2024 Core FFO was $0.84 per share, up 3.7% year-over-year; AFFO was $0.85 per share, up 2.4% year-over-year.

• Q3 2024 revenues were $218.6 million, up from $205.1 million in Q3 2023.

• Lease termination fee income was $3.9 million in Q3 and $10.2 million year-to-date, well above the five-year average.

• G&A expense was $11.2 million for the quarter, 5.1% of revenues.

• AFFO dividend payout ratio for the first nine months was 67.4%, resulting in $151 million of free cash flow.

Outlook and guidance

• 2024 Core FFO per share guidance narrowed to $3.28–$3.32; AFFO per share estimated at $3.31–$3.35.

• Acquisition volume guidance midpoint raised to $550 million, with expectations for increased deal volume in Q4.

• Disposition volume expected at $110–$130 million.

• Guidance assumes up to 200 basis points of rent loss in Q4 due to tenant credit issues, but still expects to meet the midpoint.

• General and administrative expenses projected at $45–$46 million.