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NNN REIT, Inc. Annual Results for 2024 and Outlook for 2025

On February 11, 2025, NNN REIT, Inc. (NYSE: NNN) unveiled its financial results for the year ending December 31, 2024. This prominent real estate investment trust (REIT) showcased noteworthy revenues and earnings while projecting a solid outlook for 2025. Here’s a detailed analysis of their performance and future guidance.

Key Financial Results

Annual Performance

For 2024, NNN REIT reported revenues of $869.3 million, an increase from $828.1 million in 2023. The net earnings for the year totaled $396.8 million, up from $392.3 million the previous year. Notably, the diluted net earnings per share experienced a slight decline, landing at $2.15, compared to $2.16 in 2023.

Funds From Operations (FFO), a crucial metric for REIT profitability, reached $610.5 million, translating to an FFO per share of $3.32. This marked a significant increase compared to $3.24 in 2023. Additionally, the Adjusted Funds From Operations (AFFO) rose to $616.6 million, with an AFFO per share of $3.35.

Quarterly Highlights

In the fourth quarter of 2024 alone, revenues were $218.5 million, reflecting a slight rise from $216.2 million in Q4 2023. Meanwhile, the fourth-quarter net earnings reached $97.9 million, thus ensuring a robust finish to the fiscal year.

Operational Cues

NNN REIT maintained a solid occupancy rate of 98.5% as of year-end 2024, although this showed a minor dip from the previous quarter’s 99.3%. The average lease term stands at 9.9 years, ensuring a stable income from long-term leases despite the fluctuations in tenant occupancy.

Investments and Divestitures

Throughout 2024, NNN engaged in substantial property transactions, with $565.4 million dedicated to acquiring 75 properties. These leases span roughly 1.49 million square feet, launched at a promising cash capitalization rate of 7.7%. Concurrently, the company strategically sold 41 properties for $148.7 million, realizing $42.3 million in gains from those sales at an average cap rate of 7.3%.

2025 Guidance and Strategic Outlook

Looking ahead, NNN REIT’s guidance for 2025 estimates Core FFO between $3.33 and $3.38 per share, with expected AFFO in the range of $3.39 to $3.44. Their projections are rooted in known market conditions and strategic plans, albeit with an acknowledgment of inherent uncertainties.

Steve Horn, CEO of NNN REIT, emphasized the firm’s robust position post-2024, citing $200 million in free cash flow alongside a zero balance on the revolving credit line. He expressed confidence in leveraging their financial instruments to pursue promising acquisition opportunities in the coming year.

Additionally, NNN REIT has instituted eviction proceedings for 64 leased properties. As of December 31, 2024, they successfully regained possession of 33 properties, with plans to re-lease them to different operators by May 1, 2025. This proactive approach underlines NNN's commitment to maintaining a high-quality portfolio while addressing tenant defaults.

Conclusion

NNN REIT, Inc. continues to solidify its standing as a leading real estate investment trust with a commendable track record of annual dividend increases, having reached 35 consecutive years of growth. Their strategic maneuvers in property acquisitions, meticulous management of tenant relationships, and prudent financial planning will be critical as they navigate the challenges and opportunities that 2025 may present. For more updates, keep an eye on their upcoming conference call scheduled for February 11, 2025, where they will offer further insights into their operational strategies and financial health.