NNN REIT (NNN) Q3 2024 earnings summary

Executive summary

• Delivered consistent performance in 2024, with FFO and Core FFO per share up 3.7% year-over-year in Q3 and AFFO per share up 2.4%, driven by active portfolio management and strategic acquisitions.

• 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, including $175 million through the ATM program.

• Sold nine properties in Q3 for $20 million, with year-to-date dispositions totaling $105.9 million from 29 properties.

Financial highlights

• Q3 2024 revenues were $218.6 million, up from $205.1 million in Q3 2023; nine-month revenues reached $650.8 million.

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

• Q3 net earnings were $97.9 million ($0.53 per share); nine-month net earnings were $298.9 million ($1.63 per share).

• Q3 included $3.9 million in lease termination fee income, significantly above historical averages.

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

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.

• Free cash flow for 2024 expected to reach $193 million.

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