NNN REIT, Inc. (NYSE:NNN) Q1 2024 Results Conference Call May 1, 2024 10:30 AM ET
Company Participants
Steve Horn - Chief Executive Officer
Kevin Habicht - Chief Financial Officer
Conference Call Participants
Joshua Dennerlein - Bank of America
Brad Heffern - RBC Capital Markets
Smedes Rose - Citi
Spenser Allaway - Green Street
Linda Tsai - Jefferies
John Massocca - B. Riley Securities
Ronald Kamdem - Morgan Stanley
Operator
Greetings. Welcome to the NNN REIT, Inc. First Quarter 2024 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.
I will now turn the conference over to your host, Steve Horn, Chief Executive Officer. You may begin.
Steve Horn
Thank you, Holly. Good morning, and welcome to NNN REIT's first quarter 2024 earnings call. Joining me on the call is Chief Financial Officer, Kevin Habicht.
As this morning's press release reflects, the company's performance to start 2024 produced strong results, including continued high occupancy and in line acquisition volume driven by our proprietary tenant relationships. We are in position to continue enhancing shareholder value as we move deeper into 2024 and beyond. Highlights of the first quarter results emphasize our continuous effort actively managing the portfolio.
The portfolio of 3,546 freestanding single tenant properties continued to perform exceedingly well, maintained high occupancy levels at 99.4%, which remains above our long-term average at 98% plus or minus a fraction. The leasing department had a terrific quarter, leasing seven assets to QSR and auto service tenants primarily, with a 91% rent recapture from the prior rent.
This recapture is above historical levels of approximately 70%. Remember, NNN works hard not to give TI dollars to buy off rent. Currently, NNN only has 22 vacant assets in the portfolio, which is a testament to working with relationship tenants to maximize value for shareholders.
During the quarter, we also sold six properties, which were all income producing, raising almost $19 million of proceeds to be reinvested in the new acquisitions. Over the course of the year, NNN sells assets defensively and proactively. But overall, we target the blended disposition cap rate to be 100 basis points lower than the deployment of capital pricing.
The last point on the portfolio I'd like to mention is with regard to 2024 lease expirations, which we originally had 90 for the year. As of the end of the quarter, there's 39 left to handle, and I'm not expecting a departure from the norms, 85% renewal and 100% prior rent.