Second Quarter 2021 Operating Results And Increased 2021 Guidance Announced By National Retail Properties, Inc.
ORLANDO, Fla., Aug. 3, 2021 /PRNewswire/ -- National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced its operating results for the quarter and six months ended June 30, 2021. Highlights include:
Operating Results:
- Revenues and net earnings, FFO, Core FFO and AFFO available to common stockholders and diluted per share amounts:
Quarter Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Revenues | $ | 179,011 | $ | 163,701 | $ | 358,789 | $ | 338,764 | ||||||||
Net earnings available to common stockholders | $ | 68,538 | $ | 41,780 | $ | 120,640 | $ | 102,473 | ||||||||
Net earnings per common share | $ | 0.39 | $ | 0.24 | $ | 0.69 | $ | 0.60 | ||||||||
FFO available to common stockholders | $ | 122,862 | $ | 111,738 | $ | 222,683 | $ | 214,247 | ||||||||
FFO per common share | $ | 0.70 | $ | 0.65 | $ | 1.27 | $ | 1.25 | ||||||||
Core FFO available to common stockholders | $ | 122,862 | $ | 111,738 | $ | 244,011 | $ | 230,926 | ||||||||
Core FFO per common share | $ | 0.70 | $ | 0.65 | $ | 1.40 | $ | 1.35 | ||||||||
AFFO available to common stockholders | $ | 134,375 | (1) | $ | 83,240 | (2) | $ | 267,908 | (1) | $ | 204,990 | (2) | ||||
AFFO per common share | $ | 0.77 | (1) | $ | 0.49 | (2) | $ | 1.53 | (1) | $ | 1.20 | (2) | ||||
(1) Amounts include $8,323 and $17,706 of net straight-line accrued rent from rent deferral repayments from the COVID-19 rent deferral lease amendments for the quarter and six months ended June 30, 2021, respectively. Excluding such, AFFO per common share would have been $0.72 and $1.43 for the quarter and six months ended June 30, 2021, respectively. | ||||||||||||||||
(2) Amounts exclude $30,223 of net straight-line accrued rent from rent deferral repayments from the COVID-19 rent deferral lease amendments. Including such, AFFO per common share would have been $0.66 and $1.37 for the quarter and six months ended June 30, 2020, respectively. | ||||||||||||||||
Second Quarter 2021 Highlights:
- As of July 28, 2021, NNN had collected approximately 99% of rent originally due for the quarter ended June 30, 2021, and approximately 99% of rent originally due in July 2021
- Maintained high occupancy levels at 98.3%, with a weighted average remaining lease term of 10.6 years, at June 30, 2021 as compared to 98.3% at March 31, 2021 and 98.5% at December 31, 2020
- Invested $102.9 million in property investments, including the acquisition of 29 properties with an aggregate 173,000 square feet of gross leasable area at an initial cash yield of 6.7%
- Sold 15 properties for $22.9 million producing $4.2 million of gains on sales
- Expanded line of credit borrowing capacity from $900 million to $1.1 billion, reduced pricing from LIBOR plus 87.5 basis points to LIBOR plus 77.5 basis points, and extended maturity to June 2025.
- Ended the quarter with $249.6 million of cash and no amounts drawn on the $1.1 billion bank credit facility
First Half of 2021 Highlights:
- Invested $208.6 million in property investments, including the acquisition of 58 properties with an aggregate 528,000 square feet of gross leasable area at an initial cash yield of 6.5%
- Sold 26 properties for $40.4 million producing $8.5 million of gains on sales
- Raised $2.4 million net proceeds from the issuance of 61,430 common shares
- Issued $450 million principal amount of 3.500% senior unsecured notes due 2051
- Redeemed $350 million principal amount of 3.300% senior unsecured notes due 2023
- Weighted average debt maturity increased to 13.0 years
NNN has entered into rent deferral lease amendments with certain tenants for an aggregate $51,799,000 and $4,758,000 of rent originally due for the years ended December 31, 2020 and December 31, 2021, respectively. The rent deferral lease amendments require the deferred rents to be repaid at a later time during the lease term. Approximately $3,259,000 of deferred rent was repaid in 2020 and approximately $21,151,000 of deferred rent was repaid in the six months ending June 30, 2021.
Core FFO guidance for 2021 was increased from a range of $2.70 to $2.75 to a range of $2.75 to $2.80 per share. The 2021 AFFO is estimated to be $2.95 to $3.00 per share. The Core FFO guidance equates to net earnings of $1.60 to $1.65 per share, plus $1.15 per share of expected real estate depreciation and amortization and excludes any gains from the sale of real estate and any charges for impairments or loss on early extinguishment of debt. The guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Securities and Exchange Commission.
Jay Whitehurst, Chief Executive Officer, commented: "National Retail Properties produced another quarter of strong results, driven by continued high occupancy, impressive rent collections and solid acquisitions from relationship tenants, all supported by a low leverage, flexible balance sheet. In addition to our recently announced increase in the common stock dividend, thus making 2021 our 32nd consecutive year of increased annual dividends, we are pleased today to increase our guidance for 2021 Core FFO per share, reflecting a return to our pre-pandemic strategy to generate consistent mid-single digits per share growth on a multi-year basis. With almost $250M of cash in the bank and no material debt maturities until 2024, we are well positioned for the balance of 2021 and beyond."
National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of June 30, 2021, the company owned 3,173 properties in 48 states with a gross leasable area of approximately 32.7 million square feet and with a weighted average remaining lease term of 10.6 years. For more information on the company, visit www.nnnreit.com.
Management will hold a conference call on August 3, 2021, at 10:30 a.m. ET to review these results. The call can be accessed on the National Retail Properties web site live at http://www.nnnreit.com. For those unable to listen to the live broadcast, a replay will be available on the company's web site. In addition, a summary of any earnings guidance given on the call will be posted to the company's web site.
Statements in this press release that are not strictly historical are "forward-looking" statements. These statements generally are characterized by the use of terms such as "believe," "expect," "intend," "may," "estimated," or other similar words or expressions. Forward-looking statements involve known and unknown risks, which may cause the company's actual future results to differ materially from expected results. These risks include, among others, the potential impacts of the COVID-19 pandemic on the company's business operations, financial results and financial position and on the world economy, general economic conditions, local real estate conditions, changes in interest rates, increases in operating costs, the preferences and financial condition of the company's tenants, the availability of capital, and, risks related to the company's status as a REIT. Additional information concerning these and other factors that could cause actual results to differ materially from these forward-looking statements is contained from time to time in the company's Securities and Exchange Commission (the "Commission") filings, including, but not limited to, the company's (i) Annual Report on Form 10-K for the year ended December 31, 2020 and (ii) Quarterly Report on Form 10-Q for the quarter and six months ended June 30, 2021. Copies of each filing may be obtained from the company or the Commission. Such forward-looking statements should be regarded solely as reflections of the company's current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. National Retail Properties, Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.
Funds From Operations, commonly referred to as FFO, is a relative non-GAAP financial measure of operating performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") and is used by the company as follows: net earnings (computed in accordance with GAAP) plus depreciation and amortization of assets unique to the real estate industry, excluding gains (or including losses), any applicable taxes and noncontrolling interests on the disposition of certain assets, the company's share of these items from the company's unconsolidated partnerships and any impairment charges on a depreciable real estate asset.
FFO is generally considered by industry analysts to be the most appropriate measure of performance of real estate companies. FFO does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net earnings as an indication of the company's performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers FFO an appropriate measure of performance of an equity REIT because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. The company's computation of FFO may differ from the methodology for calculating FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to FFO, as defined by NAREIT, is included in the financial information accompanying this release.
Core Funds From Operations ("Core FFO") is a non-GAAP measure of operating performance that adjusts FFO to eliminate the impact of certain GAAP income and expense amounts that the company believes are infrequent and unusual in nature and/or not related to its core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the REIT industry, and management believes that presentation of Core FFO provides investors with a potential metric to assist in their evaluation of the company's operating performance across multiple periods and in comparison to the operating performance of its peers because it removes the effect of unusual items that are not expected to impact the company's operating performance on an ongoing basis. Core FFO is used by management in evaluating the performance of the company's core business operations and is a factor in determining management compensation. Items included in calculating FFO that may be excluded in calculating Core FFO may include items like transaction related gains, income or expense, impairments on land or commercial mortgage residual interests, preferred stock redemption costs or other non-core amounts as they occur. The company's computation of Core FFO may differ from the methodology for calculating Core FFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to Core FFO is included in the financial information accompanying this release.
Adjusted Funds From Operations ("AFFO") is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO adjusts FFO for certain non-cash items that reduce or increase net income in accordance with GAAP. AFFO should not be considered an alternative to net earnings, as an indication of the company's performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers AFFO a useful supplemental measure of the company's performance. The company's computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore, may not be comparable to such other REITs. A reconciliation of net earnings (computed in accordance with GAAP) to AFFO is included in the financial information accompanying this release.
National Retail Properties, Inc. | |||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
(unaudited) | |||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||
Income Statement Summary | |||||||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 178,004 | $ | 163,479 | $ | 357,202 | $ | 338,026 | |||||||||
Interest and other income from real estate transactions | 1,007 | 222 | 1,587 | 738 | |||||||||||||
179,011 | 163,701 | 358,789 | 338,764 | ||||||||||||||
Operating expenses: | |||||||||||||||||
General and administrative | 11,868 | 9,395 | 23,616 | 19,495 | |||||||||||||
Real estate | 6,619 | 6,323 | 14,344 | 13,959 | |||||||||||||
Depreciation and amortization | 50,875 | 48,936 | 100,855 | 98,124 | |||||||||||||
Leasing transaction costs | 22 | — | 60 | 36 | |||||||||||||
Impairment losses – real estate, net of recoveries | 7,735 | 21,854 | 9,866 | 27,367 | |||||||||||||
77,119 | 86,508 | 148,741 | 158,981 | ||||||||||||||
Gain on disposition of real estate | 4,181 | 719 | 8,462 | 13,489 | |||||||||||||
Earnings from operations | 106,073 | 77,912 | 218,510 | 193,272 | |||||||||||||
Other expenses (revenues): | |||||||||||||||||
Interest and other income | (33) | (106) | (98) | (271) | |||||||||||||
Interest expense | 33,085 | 31,753 | 67,672 | (1) | 65,423 | (2) | |||||||||||
Loss on early extinguishment of debt | — | — | 21,328 | 16,679 | |||||||||||||
33,052 | 31,647 | 88,902 | 81,831 | ||||||||||||||
Net earnings | 73,021 | 46,265 | 129,608 | 111,441 | |||||||||||||
Loss attributable to noncontrolling interests | 2 | — | 2 | 2 | |||||||||||||
Net earnings attributable to NNN | 73,023 | 46,265 | 129,610 | 111,443 | |||||||||||||
Series F preferred stock dividends | (4,485) | (4,485) | (8,970) | (8,970) | |||||||||||||
Net earnings available to common stockholders | $ | 68,538 | $ | 41,780 | $ | 120,640 | $ | 102,473 | |||||||||
Weighted average common shares outstanding: | |||||||||||||||||
Basic | 174,611 | 171,389 | 174,600 | 171,214 | |||||||||||||
Diluted | 174,727 | 171,485 | 174,733 | 171,374 | |||||||||||||
Net earnings per share available to common stockholders: | |||||||||||||||||
Basic | $ | 0.39 | $ | 0.24 | $ | 0.69 | $ | 0.60 | |||||||||
Diluted | $ | 0.39 | $ | 0.24 | $ | 0.69 | $ | 0.60 | |||||||||
(1) Includes $2,078 in connection with the redemption of 3.30% senior unsecured notes due 2023 for the six months ended June 30, 2021. | |||||||||||||||||
(2) Includes $2,291 in connection with the redemption of 3.80% senior unsecured notes due 2022 for the six months ended June 30, 2020. | |||||||||||||||||
National Retail Properties, Inc. (in thousands, except per share data) (unaudited) | |||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||
Funds From Operations (FFO) Reconciliation: | |||||||||||||||||
Net earnings available to common stockholders | $ | 68,538 | $ | 41,780 | $ | 120,640 | $ | 102,473 | |||||||||
Real estate depreciation and amortization | 50,770 | 48,823 | 100,639 | 97,896 | |||||||||||||
Gain on disposition of real estate | (4,181) | (719) | (8,462) | (13,489) | |||||||||||||
Impairment losses – depreciable real estate, net of recoveries | 7,735 | 21,854 | 9,866 | 27,367 | |||||||||||||
Total FFO adjustments | 54,324 | 69,958 | 102,043 | 111,774 | |||||||||||||
FFO available to common stockholders | $ | 122,862 | $ | 111,738 | $ | 222,683 | $ | 214,247 | |||||||||
FFO per common share: | |||||||||||||||||
Basic | $ | 0.70 | $ | 0.65 | $ | 1.28 | $ | 1.25 | |||||||||
Diluted | $ | 0.70 | $ | 0.65 | $ | 1.27 | $ | 1.25 | |||||||||
Core Funds From Operations (Core FFO) Reconciliation: | |||||||||||||||||
Net earnings available to common stockholders | $ | 68,538 | $ | 41,780 | $ | 120,640 | $ | 102,473 | |||||||||
Total FFO adjustments | 54,324 | 69,958 | 102,043 | 111,774 | |||||||||||||
FFO available to common stockholders | 122,862 | 111,738 | 222,683 | 214,247 | |||||||||||||
Loss on early extinguishment of debt | — | — | 21,328 | 16,679 | |||||||||||||
Total Core FFO adjustments | — | — | 21,328 | 16,679 | |||||||||||||
Core FFO available to common stockholders | $ | 122,862 | $ | 111,738 | $ | 244,011 | $ | 230,926 | |||||||||
Core FFO per common share: | |||||||||||||||||
Basic | $ | 0.70 | $ | 0.65 | $ | 1.40 | $ | 1.35 | |||||||||
Diluted | $ | 0.70 | $ | 0.65 | $ | 1.40 | $ | 1.35 | |||||||||
National Retail Properties, Inc. (in thousands, except per share data) (unaudited) | |||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||
Adjusted Funds From Operations (AFFO) Reconciliation: | |||||||||||||||||
Net earnings available to common stockholders | $ | 68,538 | $ | 41,780 | $ | 120,640 | $ | 102,473 | |||||||||
Total FFO adjustments | 54,324 | 69,958 | 102,043 | 111,774 | |||||||||||||
Total Core FFO adjustments | — | — | 21,328 | 16,679 | |||||||||||||
Core FFO available to common stockholders | 122,862 | 111,738 | 244,011 | 230,926 | |||||||||||||
Straight-line accrued rent, net of reserves | 7,359 | (30,984) | 15,692 | (31,045) | |||||||||||||
Net capital lease rent adjustment | 95 | 22 | 185 | 83 | |||||||||||||
Below-market rent amortization | (112) | (190) | (274) | (410) | |||||||||||||
Stock based compensation expense | 4,235 | 3,074 | 8,421 | 6,322 | |||||||||||||
Capitalized interest expense | (64) | (420) | (127) | (886) | |||||||||||||
Total AFFO adjustments | 11,513 | (28,498) | 23,897 | (25,936) | |||||||||||||
AFFO available to common stockholders | $ | 134,375 | (1) | $ | 83,240 | (2) | $ | 267,908 | (1) | $ | 204,990 | (2) | |||||
AFFO per common share: | |||||||||||||||||
Basic | $ | 0.77 | (1) | $ | 0.49 | (2) | $ | 1.53 | (1) | $ | 1.20 | (2) | |||||
Diluted | $ | 0.77 | (1) | $ | 0.49 | (2) | $ | 1.53 | (1) | $ | 1.20 | (2) | |||||
Other Information: | |||||||||||||||||
Rental income from operating leases(3) | $ | 173,371 | $ | 159,300 | $ | 346,954 | $ | 328,033 | |||||||||
Earned income from direct financing leases(3) | $ | 157 | $ | 162 | $ | 315 | $ | 326 | |||||||||
Percentage rent(3) | $ | 231 | $ | 165 | $ | 335 | $ | 568 | |||||||||
Real estate expense reimbursement from tenants(3) | $ | 4,245 | $ | 3,852 | $ | 9,598 | $ | 9,099 | |||||||||
Real estate expenses | (6,620) | (6,323) | (14,345) | (13,959) | |||||||||||||
Real estate expenses, net of tenant reimbursements | $ | (2,375) | $ | (2,471) | $ | (4,747) | $ | (4,860) | |||||||||
Amortization of debt costs | $ | 1,042 | $ | 1,026 | $ | 2,882 | (4) | $ | 2,842 | (5) | |||||||
Scheduled debt principal amortization (excluding maturities) | $ | 155 | $ | 147 | $ | 312 | $ | 294 | |||||||||
Non-real estate depreciation expense | $ | 108 | $ | 115 | $ | 222 | $ | 233 | |||||||||
(1) | Amounts include the net straight-line accrued rent impact of the rent deferral repayments from the COVID-19 rent deferral lease amendments of $8,323 and $17,706 for the quarter and six months ended June 30, 2021, respectively. Excluding such, AFFO per common share would have been $0.72 and $1.43 for the quarter and six months ended June 30, 2021, respectively. |
(2) | Amounts exclude $30,223 of straight-line accrued rent from rent deferral repayments from the COVID-19 rent deferral lease amendments. Including such, AFFO per common share would have been $0.66 and $1.37 for the quarter and six months ended June 30, 2020, respectively. |
(3) | For the quarter and six months ended June 30, 2021, the aggregate of such amounts is $178,004 and $357,202, respectively, and is classified as rental income on the income statement summary. For the quarter and six months ended June 30, 2020, the aggregate of such amounts is $163,479 and $338,026, respectively. |
(4) | Includes $745 in connection with the redemption of the 3.30% senior unsecured notes due 2023 for the six months ended June 30, 2021. |
(5) | Includes $851 in connection with the redemption of the 3.80% senior unsecured notes due 2022 for the six months ended June 30, 2020. |
2021 Earnings Guidance: | ||||||||
Guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in this press release and the company's reports filed with the Commission. | ||||||||
2021 Guidance | ||||||||
Net earnings per common share excluding any gains on disposition of real estate, impairment charges and loss on early extinguishment of debt | $1.60 - $1.65 per share | |||||||
Real estate depreciation and amortization per share | $1.15 per share | |||||||
Core FFO per share | $2.75 - $2.80 per share | |||||||
AFFO per share(1) | $2.95 - $3.00 per share | |||||||
General and administrative expenses | $46 - $48 Million | |||||||
Real estate expenses, net of tenant reimbursements | $10 - $12 Million | |||||||
Acquisition volume | $400 - $500 Million | |||||||
Disposition volume | $80 - $100 Million | |||||||
(1) | Estimates include the net straight-line accrued rent impact of the rent repayment from the COVID-19 rent deferral lease amendments of $24,953,000 for 2021. Absent such, AFFO per common share guidance would have been $2.81 - $2.86 per share for 2021. |
National Retail Properties, Inc. | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
June 30, 2021 | December 31, 2020 | |||||||
Balance Sheet Summary | ||||||||
Assets: | ||||||||
Real estate portfolio | $ | 7,270,513 | $ | 7,212,655 | ||||
Real estate held for sale | 12,736 | 5,671 | ||||||
Cash and cash equivalents | 249,558 | 267,236 | ||||||
Receivables, net of allowance of $779 and $835, respectively | 3,613 | 4,338 | ||||||
Accrued rental income, net of allowance of $5,294 and $6,947, respectively | 37,870 | 53,958 | ||||||
Debt costs, net of accumulated amortization of $18,243 and $17,294, respectively | 8,508 | 1,917 | ||||||
Other assets | 93,002 | 92,069 | ||||||
Total assets | $ | 7,675,800 | $ | 7,637,844 | ||||
Liabilities: | ||||||||
Line of credit payable | $ | — | $ | — | ||||
Mortgages payable, including unamortized premium and net of unamortized debt cost | 11,049 | 11,395 | ||||||
Notes payable, net of unamortized discount and unamortized debt costs | 3,299,218 | 3,209,527 | ||||||
Accrued interest payable | 21,816 | 19,401 | ||||||
Other liabilities | 72,839 | 78,217 | ||||||
Total liabilities | 3,404,922 | 3,318,540 | ||||||
Stockholders' equity of NNN | 4,270,876 | 4,319,300 | ||||||
Noncontrolling interests | 2 | 4 | ||||||
Total equity | 4,270,878 | 4,319,304 | ||||||
Total liabilities and equity | $ | 7,675,800 | $ | 7,637,844 | ||||
Common shares outstanding | 175,599 | 175,233 | ||||||
Gross leasable area, Property Portfolio (square feet) | 32,664 | 32,461 | ||||||
National Retail Properties, Inc. | ||||||||||||||||
Unsecured Debt | Principal | Principal, | Stated Rate | Effective Rate | Maturity Date | |||||||||||
Line of credit payable | $ | — | $ | — | L + 77.5 bps | — | % | June 2025 | ||||||||
Unsecured notes payable: | ||||||||||||||||
2024 | 350,000 | 349,763 | 3.900 | % | 3.924 | % | June 2024 | |||||||||
2025 | 400,000 | 399,533 | 4.000 | % | 4.029 | % | November 2025 | |||||||||
2026 | 350,000 | 347,719 | 3.600 | % | 3.733 | % | December 2026 | |||||||||
2027 | 400,000 | 398,918 | 3.500 | % | 3.548 | % | October 2027 | |||||||||
2028 | 400,000 | 397,815 | 4.300 | % | 4.388 | % | October 2028 | |||||||||
2030 | 400,000 | 398,863 | 2.500 | % | 2.536 | % | April 2030 | |||||||||
2048 | 300,000 | 295,946 | 4.800 | % | 4.890 | % | October 2048 | |||||||||
2050 | 300,000 | 294,096 | 3.100 | % | 3.205 | % | April 2050 | |||||||||
2051 | 450,000 | 441,641 | 3.500 | % | 3.602 | % | April 2051 | |||||||||
Total | 3,350,000 | 3,324,294 | ||||||||||||||
Total unsecured debt(1) | $ | 3,350,000 | $ | 3,324,294 | ||||||||||||
Debt costs | (33,178) | |||||||||||||||
Accumulated amortization | 8,102 | |||||||||||||||
Debt costs, net of accumulated amortization | (25,076) | |||||||||||||||
Notes payable, net of unamortized discount and unamortized debt costs | $ | 3,299,218 | ||||||||||||||
(1) Unsecured notes payable have a weighted average interest rate of 3.7% and a weighted average maturity of 13.0 years. | ||||||||||||||||
Mortgages Payable | Principal | Interest Rate | Maturity Date | |||||||
Mortgage(1) | $ | 11,080 | 5.230 | % | July 2023 | |||||
Debt costs | (147) | |||||||||
Accumulated amortization | 116 | |||||||||
Debt costs, net of accumulated amortization | (31) | |||||||||
Mortgages payable, including unamortized premium and net of unamortized debt costs | $ | 11,049 | ||||||||
(1) Includes unamortized premium | ||||||||||
National Retail Properties, Inc.
Debt Summary
As of June 30, 2021
Credit Facility and Note Covenants
The following is a summary of key financial covenants for the company's unsecured credit facility and notes, as defined and calculated per the terms of the facility's credit agreement and the notes' governing documents, respectively, which are included in the company's filings with the Commission. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of June 30, 2021, the company believes it is in compliance with the covenants.
Unsecured Credit Facility Key Covenants | Required | June 30, 2021 | ||
Maximum leverage ratio | < 0.60 | 0.34 | ||
Minimum fixed charge coverage ratio | > 1.50 | 4.27 | ||
Maximum secured indebtedness ratio | < 0.40 | 0.001 | ||
Unencumbered asset value ratio | > 1.67 | 2.96 | ||
Unencumbered interest ratio | > 1.75 | 4.93 | ||
Unsecured Notes Key Covenants | Required | June 30, 2021 | ||
Limitation on incurrence of total debt | ≤ 60% | 36.5% | ||
Limitation on incurrence of secured debt | ≤ 40% | 0.1% | ||
Debt service coverage ratio | ≥ 1.50 | 4.43 | ||
Maintenance of total unencumbered assets | ≥ 150% | 274% |
National Retail Properties, Inc. | |||||||||||
Property Portfolio | |||||||||||
Top 20 Lines of Trade | |||||||||||
% of Rent | |||||||||||
As of June 30, | |||||||||||
Line of Trade | 2021(1) | 2020(2) | |||||||||
1. | Convenience stores | 18.0 | % | 18.1 | % | 99.9 | % | ||||
2. | Automotive service | 11.4 | % | 10.2 | % | 99.7 | % | ||||
3. | Restaurants – full service | 9.9 | % | 10.6 | % | 93.9 | % | ||||
4. | Restaurants – limited service | 9.2 | % | 8.8 | % | 99.7 | % | ||||
5. | Family entertainment centers | 6.1 | % | 6.7 | % | 99.9 | % | ||||
6. | Health and fitness | 5.2 | % | 5.2 | % | 99.3 | % | ||||
7. | Theaters | 4.6 | % | 4.7 | % | 94.9 | % | ||||
8. | Recreational vehicle dealers, parts and accessories | 3.5 | % | 3.5 | % | 100.0 | % | ||||
9. | Equipment rental | 3.2 | % | 2.6 | % | 100.0 | % | ||||
10. | Automotive parts | 3.1 | % | 3.1 | % | 100.0 | % | ||||
11. | Home improvement | 2.6 | % | 2.6 | % | 100.0 | % | ||||
12. | Wholesale clubs | 2.5 | % | 2.5 | % | 100.0 | % | ||||
13. | Medical service providers | 2.2 | % | 2.1 | % | 98.6 | % | ||||
14. | General merchandise | 1.7 | % | 1.7 | % | 98.7 | % | ||||
15. | Furniture | 1.6 | % | 1.7 | % | 99.5 | % | ||||
16. | Consumer electronics | 1.6 | % | 1.5 | % | 100.0 | % | ||||
17. | Home furnishings | 1.6 | % | 1.6 | % | 100.0 | % | ||||
18. | Travel plazas | 1.5 | % | 1.5 | % | 100.0 | % | ||||
19. | Drug stores | 1.4 | % | 1.5 | % | 100.0 | % | ||||
20. | Bank | 1.3 | % | 1.3 | % | 100.0 | % | ||||
Other | 7.8 | % | 8.5 | % | 98.6 | % | |||||
Total | 100.0 | % | 100.0 | % | 98.9 | % | |||||
Top 10 States | |||||||||||||
State | % of Total(1) | State | % of Total(1) | ||||||||||
1. | Texas | 17.2 | % | 6. | Georgia | 4.3 | % | ||||||
2. | Florida | 8.9 | % | 7. | Indiana | 3.9 | % | ||||||
3. | Ohio | 5.6 | % | 8. | Tennessee | 3.6 | % | ||||||
4. | Illinois | 5.5 | % | 9. | California | 3.4 | % | ||||||
5. | North Carolina | 4.4 | % | 10. | Virginia | 3.3 | % | ||||||
As a percentage of annual base rent, which is the annualized base rent for all leases in place. | |||||||||||||
(1) $689,364,000 as of June 30, 2021. | |||||||||||||
(2) $676,538,000 as of June 30, 2020. | |||||||||||||
(3) Rent collections received as of July 28, 2021, excluding the repayment of amounts previously deferred according to the rent deferral lease amendments. | |||||||||||||
National Retail Properties, Inc. | |||||||
Property Portfolio | |||||||
Top 20 Tenants | |||||||
Properties | % of Total(1) | ||||||
1. | 7-Eleven | 139 | 5.0 | % | |||
2. | Mister Car Wash | 120 | 4.7 | % | |||
3. | Camping World | 47 | 4.3 | % | |||
4. | LA Fitness | 30 | 3.8 | % | |||
5. | GPM Investments (Convenience Stores) | 153 | 3.3 | % | |||
6. | Flynn Restaurant Group (Taco Bell/Arby's) | 204 | 3.2 | % | |||
7. | AMC Theatre | 20 | 3.0 | % | |||
8. | Couche Tard (Pantry) | 83 | 2.7 | % | |||
9. | BJ's Wholesale Club | 11 | 2.5 | % | |||
10. | Sunoco | 59 | 2.2 | % | |||
11. | Mavis Tire Express Services | 123 | 2.1 | % | |||
12. | Main Event | 18 | 1.8 | % | |||
13. | Frisch's Restaurants | 73 | 1.8 | % | |||
14. | Fikes (Convenience Stores) | 56 | 1.6 | % | |||
15. | Chuck E. Cheese's | 53 | 1.6 | % | |||
16. | Best Buy | 16 | 1.5 | % | |||
17. | Bob Evans | 106 | 1.5 | % | |||
18. | Life Time Fitness | 3 | 1.4 | % | |||
19. | Dave & Buster's | 11 | 1.4 | % | |||
20. | Ahern Rentals | 35 | 1.4 | % | |||
Lease Expirations(2) | ||||||||||||||||||||
% of Total(1) | # of Properties | Gross Leasable Area(3) | % of Total(1) | # of Properties | Gross Leasable | |||||||||||||||
2021 | 0.9 | % | 29 | 410,000 | 2027 | 6.5 | % | 179 | 2,638,000 | |||||||||||
2022 | 4.9 | % | 115 | 1,404,000 | 2028 | 4.7 | % | 156 | 1,178,000 | |||||||||||
2023 | 2.7 | % | 113 | 1,401,000 | 2029 | 3.0 | % | 74 | 1,041,000 | |||||||||||
2024 | 3.4 | % | 93 | 1,455,000 | 2030 | 3.7 | % | 105 | 1,185,000 | |||||||||||
2025 | 6.2 | % | 197 | 2,087,000 | 2031 | 8.8 | % | 198 | 2,966,000 | |||||||||||
2026 | 5.6 | % | 212 | 2,122,000 | Thereafter | 49.6 | % | 1,646 | 14,070,000 | |||||||||||
(1) | Based on the annual base rent of $689,364,000, which is the annualized base rent for all leases in place as of June 30, 2021. |
(2) | As of June 30, 2021, the weighted average remaining lease term is 10.6 years. |
(3) | Square feet. |
National Retail Properties, Inc. | |||||||||||||||||||||||||||||||||||
Rent Deferral Lease Amendments | |||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||
The following table outlines the rent deferred and corresponding recapture payback by quarter of the rent deferral lease amendments executed as of June 30, 2021 (dollars in thousands): | |||||||||||||||||||||||||||||||||||
Deferred | Scheduled Repayment | ||||||||||||||||||||||||||||||||||
Accrual | Cash | Total | % of Total | Accrual | Cash | Total | % of Total | Cumulative | |||||||||||||||||||||||||||
2020 | $ | 33,602 | $ | 18,197 | $ | 51,799 | 91.6 | % | $ | 3,239 | $ | 20 | $ | 3,259 | 5.8 | % | 5.8 | % | |||||||||||||||||
2021 | Q1 | 678 | 2,018 | 2,696 | 4.8 | % | 10,061 | 674 | 10,735 | 19.0 | % | 24.8 | % | ||||||||||||||||||||||
Q2 | 278 | 750 | 1,028 | 1.8 | % | 8,601 | 1,815 | 10,416 | 18.4 | % | 43.2 | % | |||||||||||||||||||||||
Q3 | 34 | 750 | 784 | 1.4 | % | 4,330 | 1,804 | 6,134 | 10.8 | % | 54.0 | % | |||||||||||||||||||||||
Q4 | — | 250 | 250 | 0.4 | % | 2,951 | 1,804 | 4,755 | 8.4 | % | 62.4 | % | |||||||||||||||||||||||
990 | 3,768 | 4,758 | 8.4 | % | 25,943 | 6,097 | 32,040 | 56.6 | % | 62.4 | % | ||||||||||||||||||||||||
2022 | Q1 | — | — | — | — | 1,780 | 2,223 | 4,003 | 7.1 | % | 69.5 | % | |||||||||||||||||||||||
Q2 | — | — | — | — | 1,729 | 2,223 | 3,952 | 7.0 | % | 76.5 | % | ||||||||||||||||||||||||
Q3 | — | — | — | — | 1,201 | 2,223 | 3,424 | 6.0 | % | 82.5 | % | ||||||||||||||||||||||||
Q4 | — | — | — | — | 681 | 2,223 | 2,904 | 5.1 | % | 87.6 | % | ||||||||||||||||||||||||
— | — | — | — | 5,391 | 8,892 | 14,283 | 25.2 | % | 87.6 | % | |||||||||||||||||||||||||
2023 | — | — | — | — | 19 | 3,092 | 3,111 | 5.4 | % | 93.0 | % | ||||||||||||||||||||||||
2024 | — | — | — | — | — | 1,932 | 1,932 | 3.5 | % | 96.5 | % | ||||||||||||||||||||||||
2025 | — | — | — | — | — | 1,932 | 1,932 | 3.5 | % | 100.0 | % | ||||||||||||||||||||||||
$ | 34,592 | $ | 21,965 | $ | 56,557 | $ | 34,592 | $ | 21,965 | $ | 56,557 | ||||||||||||||||||||||||
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SOURCE National Retail Properties, Inc.
