National Retail Properties, Inc. (NYSE:NNN) Q3 2022 Earnings Conference Call November 2, 2022 10:30 AM ET

Company Participants

Steve Horn - Chief Executive Officer

Kevin Habicht - Chief Financial Officer

Conference Call Participants

Nick Joseph - Citi

Spenser Allaway - Green Street

Wes Golladay - Baird

Joshua Dennerlein - Bank of America

Ronald Kamdem - Morgan Stanley

John Massocca - Ladenburg

Linda Tsai - Jefferies

Operator

Good morning, ladies and gentlemen and welcome to the National Retail Properties Third Quarter 2022 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Mr. Steve Horn, Chief Executive Officer. Sir, the floor is yours.

Steve Horn

Thank you, Al. Good morning and welcome to National Retail Properties’ third quarter 2022 earnings call. Joining me on the call is Chief Financial Officer, Kevin Habicht.

As this morning’s press release reflects National Retail Properties performance in 2022 continues to produce strong results, including continued high occupancy, impressive rent collections and a solid acquisition driven by our tenants’ relationships. We are in position to continue the performance through the fourth quarter. Based on our year-to-date performance, we announced a further increase in our 2022 guidance of core FFO to a range of $3.11 to $3.15 per share.

Also during the quarter, we announced and pleased to announce Elizabeth Castro Gulacsy has joined the Board. Her experience with SeaWorld Entertainment, Cross Country Healthcare and Ernst & Young will bring a fresh perspective and valuable insight as we continue to grow the company.

NNN’s longstanding strategy of being selective while deploying capital and opportunistic raising capital over the years/decades has NNN in great shape heading into 2023. In a time of uncertainty like today’s macroeconomic conditions, NNN’s discipline of maintaining a solid balance sheet and reasonable acquisition volume does put NNN in good place to handle the price discovery phase, the triple net market is currently working through. At the end of the quarter, we had under $50 million drawn on our $1.1 billion line of credit after completing over $585 million of volume through the first 9 months of the year.

Shifting to the highlights of National Retail Properties third quarter results, our portfolio of 3,349 freestanding single-tenant properties continue to perform exceedingly well. We maintained high occupancy levels of 99.4%, which remains above our long-term average of 98% plus or minus. We also collected 99.7% of rent due for the third quarter. On the COVID rent deferral front, the repayment continues to track as expected. At the end of the third quarter, 82.1% or $46.6 million of the original $56.7 million deferred rents being paid back, which is 100% that is due at the time.