NNN REIT, Inc. (NYSE:NNN) Q2 2023 Earnings Conference Call August 2, 2023 10:30 AM ET

Company Participants

Stephen Horn - President, CEO & Director

Kevin Habicht - CFO, EVP, Treasurer, Assistant Secretary & Director

Conference Call Participants

Bradley Heffern - RBC Capital Markets

Farrell Granath - Bank of America Merrill Lynch

Eric Wolfe - Citi

Spenser Allaway - Green Street Advisors

Alec Feygin - Robert W. Baird & Co.

Ronald Kamdem - Morgan Stanley

Linda Tsai - Jefferies

Operator

Greetings, and welcome to the NNN REIT Second Quarter 2023 Earnings Conference Call. [Operator Instructions].

I will now turn the conference over to your host, Mr. Steve Horn. Sir, you may begin.

Stephen Horn

Thanks, Ali. Good morning, and welcome to NNN's Second Quarter 2023 Earnings Call. Joining me on the call is Chief Financial Officer, Kevin Habicht.

As this morning's press release, it reflects NNN's performance in the second quarter produced 1.3% core FFO per share growth over prior year's results, along with investments of slightly over $180 million with a 7.2% initial cash yield. The solid acquisitions for the quarter are driven by our tenant relationships. In addition, our portfolio continued with the high occupancy of 99.4% and strong lease renewals for the quarter that have been trending above historical levels year-to-date. These results have NNN in position to create shareholder value as we transition into the second half of 2023 and beyond.

In July, we announced an increase in our common stock dividend to be paid August 15, thus, making 2023 our 34th consecutive year of annual dividend increases. NNN is in select company under 75 U.S. public companies, including 2 other REITs, which have achieved this impressive record of accomplishment. Based on our first 6 months performance, we announced an increase of our 2023 core FFO guidance to a range of $3.17 to $3.22 per share. Our long-standing strategy is designed to deliver consistent per share growth on a multiyear basis. This discipline of this long-term approach is reflected in the guidance increase during the current challenging economic backdrop.

Turning to the highlights of the quarter. Our portfolio of 3,479 freestanding single-tenant properties continue to perform exceptionally well. Maintained high occupancy levels of 99.4% for 4 consecutive quarters, which remains above our long-term 98% average. At quarter end, NNN only had 22 vacant assets, which is the result of our leasing department effort working the nonperforming properties and creating value for NNN. In addition, nearly 90% of the leases that were up for renewal during the quarter exercise an extension at 105% of the prior rent.