Inve
sto
r U
pd
ate
June
201
0
22
Safe
Har
bor
This
pre
sent
atio
n co
ntai
ns c
erta
in s
tate
men
ts th
at m
ight
be
cons
ider
ed to
be
forw
ard-
look
ing
stat
emen
ts u
nder
Fed
eral
Sec
uriti
es la
ws.
Pro
spec
tive
inve
stor
s ar
e ca
utio
ned
that
any
suc
h fo
rwar
d-lo
okin
g st
atem
ents
are
not
gu
aran
tees
of f
utur
e pe
rfor
man
ce, a
nd in
volv
e ris
ks a
nd u
ncer
tain
ties.
The
co
mpa
ny’s
act
ual f
utur
e re
sults
may
diff
er s
igni
fican
tly fr
om th
e m
atte
rs
disc
usse
d in
thes
e fo
rwar
d-lo
okin
g st
atem
ents
, and
we
may
not
rele
ase
revi
sion
s to
thes
e fo
rwar
d-lo
okin
g st
atem
ents
to re
flect
cha
nges
afte
r we’
ve
mad
e th
e st
atem
ents
. Fac
tors
and
risk
s th
at c
ould
cau
se a
ctua
l res
ults
to d
iffer
m
ater
ially
from
exp
ecta
tions
are
dis
clos
ed fr
om ti
me
to ti
me
in g
reat
er d
etai
l in
the
com
pany
’s fi
lings
with
the
SEC
as
wel
l as
com
pany
pre
ss re
leas
es.
33
44
NN
N’s
st
rong
ba
lanc
e sh
eet
and
uniq
ue
stra
tegy
ach
ieve
s so
lid e
arni
ngs
grow
th a
nd
low
vol
atili
ty.
This
has
res
ulte
d in
a l
ong
trac
k re
cord
of
succ
ess
at a
gre
at v
alue
.
5
Stro
ng B
alan
ce S
heet
5
Long
-Ter
m T
rack
Rec
ord
Sum
mar
y
Uni
que
Stra
tegy
6
NN
N’s
Trip
le N
et L
ease
Stra
tegy
Cre
ates
a S
olid
Fo
unda
tion
of H
ighl
y P
redi
ctab
le O
pera
ting
Inco
me
And
Its
Uni
que
Acq
uisi
tion
App
roac
h G
ener
ates
S
tead
y E
arni
ngs
Gro
wth
with
Les
s R
isk
Than
Dev
elop
men
t an
d O
ther
Acq
uisi
tion
App
roac
hes
6
77
Low
Ris
k N
et L
ease
Str
ateg
y
15-2
0 ye
ar te
rms,
12.
5 ye
ar w
eigh
ted
aver
age
rem
aini
ng le
ase
term
Onl
y 3.
8% o
f lea
ses
expi
re th
roug
h Y
E 2
011
and
only
11.
8% o
f le
ases
exp
ire th
roug
h Y
E 2
013
Tena
nts
resp
onsi
ble
for o
pera
ting
expe
nses
, tax
es a
nd c
apita
l ex
pend
iture
sN
o C
AM
leak
age
No
anch
or o
r co-
tena
ncy
issu
es fo
r ten
ants
to le
vera
ge in
to
redu
ced
rent
Leas
e ra
tes,
term
s an
d se
curit
y sp
ecifi
cally
neg
otia
ted:
Mar
ket f
acto
rsTe
nant
’s u
niqu
e cr
edit
post
ure
Ofte
n ba
sed
on te
nant
’s h
isto
rical
resu
lts in
the
loca
tion
88
Port
folio
Div
ersi
ficat
ion
$2.6
bill
ion
tota
l ass
ets
11.4
mill
ion
SF
GLA
/ ov
er 1
,014
pro
perti
es /
43 s
tate
s 27
5+ n
atio
nal o
r reg
iona
l ten
ants
in 3
4 in
dust
ry c
lass
ifica
tions
Top
indu
stry
con
cent
ratio
n -C
onve
nien
ce S
tore
s:To
tal i
ndus
try s
ales
hav
e gr
own
at a
CA
GR
of 1
9.6%
bet
wee
n 20
00 a
nd 2
007
The
num
ber o
f con
veni
ence
sto
re lo
catio
ns in
the
U.S
. fel
l onl
y .2
% in
200
9
desp
ite th
e se
vere
rece
ssio
nC
onve
nien
ce s
tore
s ac
coun
t for
4.3
% o
f all
U.S
. con
sum
er s
pend
ing
Hig
hly
soug
ht a
fter,
heav
ily tr
affic
ked
loca
tions
:S
igni
fican
t und
erly
ing
land
val
ue (t
ypic
ally
40
–50
% o
f acq
uisi
tion
pric
e)S
ites
can
be e
asily
re-te
nant
ed b
y ot
her o
pera
tors
or c
onve
rted
to o
ther
us
es (b
anks
, dru
g st
ores
, res
taur
ants
, etc
.)
Tena
nt b
ase
is c
once
ntra
ted
in li
nes
of tr
ade
with
the
grea
test
nu
mbe
r of p
lann
ed s
tore
ope
ning
s
99
Acq
uirin
g pr
oper
ties
dire
ctly
from
tena
nts
prod
uces
mor
e ef
ficie
nt
pric
ing
and
high
er in
itial
retu
rns
NN
N a
sses
ses
disc
rete
risk
s vs
.
Mor
e ris
ks/u
nkno
wns
in v
alue
-add
, dev
elop
men
t, or
Typi
cal l
ower
yie
ldin
g re
al e
stat
e in
vest
men
t
Eac
h de
al is
stru
ctur
ed b
ased
on
its u
niqu
e ch
arac
teris
tics:
Rea
l est
ate
attri
bute
s, te
nant
cor
pora
te c
redi
t ana
lysi
s, a
sset
(sto
re)
leve
l dat
a
NN
N’s
Acq
uisi
tions
App
roac
h ha
sM
ultip
le A
dvan
tage
s
10
Rea
l Est
ate
Att
rib
ute
sC
orp
ora
te
Cre
dit
Com
petit
ive
posi
tioni
ngM
anag
emen
t tea
m tr
ack
reco
rd /
visi
onC
redi
t ana
lysi
s / l
ever
age
prof
ileP
endi
ng m
atur
ities
Use
of t
rans
actio
n pr
ocee
dsFi
xed
char
ge a
nd re
nt
cove
rage
Pro
perty
loca
tion
Und
erly
ing
land
val
ueA
rea
dem
ogra
phic
sM
arke
t ren
t / s
imila
r tra
nsac
tion
com
para
bles
Loca
tion
of c
ompe
titor
sA
ltern
ativ
e us
eR
epla
cem
ent c
ost a
naly
sis
Loca
l mar
ket c
ondi
tions
Par
king
Acc
ess
Co-
tena
nts
Vis
ibilit
yTr
affic
cou
nts
Age
of i
mpr
ovem
ents
His
toric
al s
ales
and
pro
fitab
ility
Sal
es &
Pro
fit tr
ends
Rev
enue
driv
ers
and
mar
gins
Ren
t as
a %
of S
ales
Cor
p. G
& A
allo
catio
nR
ent c
over
age
Com
paris
on w
ith s
imila
r sto
res
Rem
aini
ng le
ase
term
New
est p
roto
type
Cap
ital m
arke
ts e
nviro
nmen
tC
urre
nt c
ondi
tions
in
tena
nts’
indu
stry
/ m
arke
t(s)
Loca
l and
nat
iona
l eco
nom
yN
NN
cos
t of c
apita
lC
ap ra
te tr
ends
Legi
slat
ive
risk
Tran
sact
ion
P
roce
eds
&
Term
s
NN
N A
ppro
ach
to N
et L
ease
Acq
uisi
tions
Ass
et-L
evel
P
erfo
rman
ceM
arke
t C
on
dit
ion
s
Due Diligence and Determination of Proceeds & Terms
10
1111
NN
N’s
Str
ateg
y R
esul
ts in
Hig
her O
ccup
ancy
NN
N’s
stra
tegy
del
iver
s m
ater
ially
hig
her o
ccup
ancy
and
less
vol
atili
ty th
an it
s R
EIT
pe
ers.
Thi
s ad
vant
age
has
been
mag
nifie
d in
the
curr
ent c
halle
ngin
g en
viro
nmen
t.
Sour
ce:
SNL
Fina
ncia
l
1212
Hig
hly
prod
uctiv
e pr
oprie
tary
ww
w.n
nn10
31.c
omw
ebsi
te e
nabl
es p
rope
rty s
ales
at
prem
ium
reta
il pr
icin
g, a
t vol
umes
far a
bove
oth
er tr
iple
-net
sel
lers
:S
tand
ardi
zes
dow
nloa
dabl
e du
e di
ligen
ce in
form
atio
n an
d co
ntra
cts
Tech
nolo
gica
lly s
ophi
stic
ated
but
use
r frie
ndly
Low
cos
t to
mai
ntai
n
Sin
ce 2
005,
sol
d 30
5 pr
oper
ties
gene
ratin
g ne
t pro
ceed
s ov
er $
1.1
billi
on
Dis
posi
tion
expe
rtise
pro
vide
s ab
ility
to s
ell p
rope
rties
:Th
at d
o no
t mee
t hol
d cr
iteria
To b
ette
r con
trol t
enan
t and
line
of t
rade
con
cent
ratio
ns
Mak
ing
NN
N a
mor
e at
tract
ive
buye
r
Enh
ance
s ac
quis
ition
s re
turn
s vi
a hi
gher
effe
ctiv
e ca
p ra
te o
n re
tain
ed p
rope
rties
Cap
ital r
ecyc
ling
enha
nces
retu
rns:
Ove
r pas
t 4 y
ears
, ret
ail d
ispo
sitio
ns o
f 118
pro
perti
es o
ut o
f 7 a
cqui
sitio
n po
rtfol
ios
incr
ease
d ca
p ra
te o
n $2
39 m
illio
n ne
t acq
uisi
tions
by
near
ly 1
00 b
ps fr
om7.
95%
to 8
.9%
Pro
per
ties
NO
I C
ost
/ (P
roce
eds)
C
ap R
ate
Acq
uisi
tions
223
39,5
97
498,
354
7.95
%D
ispo
sitio
ns(1
18)
(18,
323)
(259
,352
)
7.06
%N
et A
cqui
sitio
ns10
521
,274
23
9,00
2
8.
90%
NN
N’s
Pro
ven
Dis
posi
tion
Plat
form
–St
reng
then
s Po
rtfo
lio Q
ualit
y an
d Lo
ng-T
erm
Ear
ning
s by
Rei
nves
ting
at H
ighe
r Ret
urns
1313
Trip
le N
et v
s. G
ross
Lea
se R
etur
n Pr
ofile
Year
NN
N p
rodu
ces
high
er in
itial
retu
rn w
ith lo
wer
vol
atili
ty th
an ty
pica
l gro
ss
leas
e in
vest
men
ts
5.00%
6.00%
7.00%
8.00%
9.00%
10.00
%
11.00
%
12.00
%
13.00
%
12
34
56
78
910
1112
1314
15
Net L
ease
(1.5%
NOI
Grow
th)
Gros
s Lea
se (2
.5% N
OI G
rowth)
Gros
s Lea
se (w
/volat
ility)
Cap Rate (Return)
1414
Long
-Ter
m T
rack
Rec
ord
Sum
mar
y
Stro
ng B
alan
ce S
heet
Uni
que
Stra
tegy
1515
Stro
ng B
alan
ce S
heet
–R
isk
Man
agem
ent i
s a
Cor
e C
ompe
tenc
yIn
vest
men
t-gra
de d
ebt r
atin
g (B
BB
/ B
BB
-/ B
aa2)
sup
porte
d by
sec
tor
lead
ing
leve
rage
ratio
s
99%
of a
sset
s un
encu
mbe
red
-onl
y $3
0 m
illion
of s
ecur
ed d
ebt
Wel
l-lad
dere
d de
bt m
atur
ities
with
onl
y:$2
1 m
illion
mat
urin
g in
201
0;$2
30 m
illion
mat
urin
g th
roug
h 20
12; a
ndN
o m
ore
than
$25
0 m
illion
mat
urin
g in
any
one
yea
r.$4
00 m
illion
cre
dit l
ine
-$0
draw
nM
atur
es N
ovem
ber 2
012
Pric
ed a
t LIB
OR
+ 2
80 b
ps$1
00 m
illion
acc
ordi
on fe
atur
e
Sour
ce fo
r REI
T In
dust
ry:
Citi
Inve
stm
ent R
esea
rch;
NN
N
1616
Wel
l-Lad
dere
d D
ebt M
atur
ities
($ in millions)
Not
e: A
ssum
es P
ut O
ptio
ns E
xerc
ised
on
Con
vert
ible
Not
es in
201
1 an
d 20
13
2010
2011
2
012
20
13
201
4
2015
2
016
20
17
201
820
19
17
Cre
dit M
etric
s Su
mm
ary
2005
2006
2007
2008
2009
March
2010
Total liabilities / Total assets (gross book)
49.2%
40.6%
42.5%
39.5%
36.8%
37.1%
Market Cap Leverage
43.0%
35.2%
38.6%
43.4%
35.7%
34.3%
Debt / EBITDA
6.21
4.69
5.62
4.64
4.80
4.89
EBITDA / Interest expense (cash)
3.38
3.08
3.28
3.37
3.35
3.19
EBITDA / Fixed charges (cash)
2.72
2.67
2.86
3.00
2.97
2.83
Unencum
bered assets / Total assets (gross book)
80%
94%
97%
98%
98%
98%
Bank line usage (millions)
162
$
28$
130
$
27$
‐$
‐$
Bank line availability (millions)
138
$
272
$
270
$
374
$
400
$
400
$
Capital Raised:
Common equity (millions), net
52$
91$
298
$
123
$
67$
10$
Preferred equity (millions), net
‐$
89$
‐$
‐$
‐$
‐$
Unsecured notes (millions), gross
171
$
173
$
250
$
234
$
‐$
‐$
Secured debt (millions), gross
33$
‐$
‐$
‐$
‐$
‐$
Property dispositions net proceeds
119
$
434
$
306
$
213
$
22$
8$
18
Sour
ce:
SNL
Fina
ncia
l 18
REI
T In
dust
ry D
ebt t
o To
tal M
arke
t Cap
italiz
atio
n(As of March 31, 2010)
1919
REI
T In
dust
ry F
ixed
Cha
rge
Cov
erag
e(As of Q4 2009)
Sour
ce:
Citi
grou
p G
loba
l Mar
kets
2020
Long
-Ter
m T
rack
Rec
ord
Sum
mar
y
Stro
ng B
alan
ce S
heet
Uni
que
Stra
tegy
2121
Long
-Ter
m D
ivid
end
His
tory
20 c
onse
cutiv
e ye
ars
of d
ivid
end
incr
ease
s –
Long
er th
an 9
7% o
f all
publ
ic R
EIT
s an
d 98
% o
f all
publ
ic c
ompa
nies
Dividends Per Share
Payout Ratio
2222
NN
N C
onsi
sten
tly O
utpe
rfor
ms
the
REI
T In
dust
ry a
nd th
e M
ajor
Indi
ces
NN
N O
utpe
rfor
ms
1 Ye
ar3
Year
s5
Year
s10
Ye
ars
15
Year
s
(NN
N =
$22
.83
at 0
3/31
/10)
Nat
iona
l Ret
ail P
rope
rtie
s (N
NN
)55
.0%
5.3%
11.6
%16
.7%
13.0
%
Indi
ces
NAR
EIT
Equi
ty R
EIT
Inde
x (F
NER
TR)
106.
7%-1
0.6%
3.8%
11.4
%10
.5%
Mor
gan
Stan
ley
REI
T In
dex
(RM
S G
)11
0.5%
-10.
9%3.
8%11
.2%
10.3
%
S&P
500
Inde
x (S
PX)
49.6
%-4
.2%
1.9%
-0.7
%7.
7%
Nas
daq
(CC
MP)
58.3
%0.
6%4.
6%-5
.7%
8.0%
S&P
600
(SM
L)63
.9%
-3.2
%3.
5%6.
6%10
.1%
2323
Long
-Ter
m T
rack
Rec
ord
Sum
mar
y
Stro
ng B
alan
ce S
heet
Uni
que
Stra
tegy
24
NN
N B
usin
ess
Mod
el S
umm
ary
Uni
que
Stra
tegy
Net
leas
e, s
ingl
e-te
nant
reta
il pr
oper
ties
Larg
e pr
oper
ty s
ub-s
ecto
r with
in re
tail
prop
erty
cat
egor
y –
bigg
er th
an m
all s
ecto
rLi
ttle
inst
itutio
nal i
nves
tor c
ompe
titio
n –
smal
l ind
ivid
ual a
sset
siz
e ($
2-4
mill
ion)
Hig
her i
nitia
l ret
urns
on
asse
t –ty
pica
lly 1
75 b
ps h
ighe
r tha
n co
reH
ighe
r occ
upan
cy le
vels
–na
tiona
l and
regi
onal
reta
iler t
enan
t foc
usLo
wer
pro
perty
exp
ense
risk
–tri
ple
net l
ease
sLo
wer
cap
ital e
xpen
ditu
res
and
tena
nt im
prov
emen
ts –
long
-term
leas
es
Ris
k m
anag
emen
tS
trong
acq
uisi
tion
unde
rwrit
ing
with
hig
h la
nd v
alue
sM
oder
ate
unse
cure
d de
bt le
vera
ge w
ith s
olid
cov
erag
es a
nd s
tagg
ered
deb
t mat
uriti
esA
ctiv
e as
set m
anag
emen
t and
cap
ital r
ecyc
ling
Pro
ven,
con
sist
ent l
ong-
term
resu
ltsH
ighe
r ini
tial r
etur
ns o
n as
sets
Low
er re
turn
vol
atili
ty o
ver t
ime
20 c
onse
cutiv
e ye
ars
of in
crea
sed
annu
al d
ivid
ends
Tota
l sha
reho
lder
retu
rns
exce
ed R
EIT
and
gen
eral
equ
ity a
vera
ges
over
3, 5
, 10
and
15 y
ears
2525
App
endi
x
26
NN
N’s
Mul
tiple
Doe
s N
ot R
efle
ct it
s U
niqu
e A
dvan
tage
of L
ow R
isk
/ Con
sist
ent G
row
th
Sour
ce:
SNL
Fina
ncia
l 26
2727
NN
N’s
Div
iden
d Y
ield
doe
s no
t ref
lect
its:
20 c
onse
cutiv
e ye
ars
of d
ivid
end
incr
ease
s w
ith a
fallin
gpa
yout
ratio
;S
uper
ior o
pera
ting
risk
prof
ile; a
ndIn
vest
men
t-gra
de d
ebt r
atin
g (B
BB
/ B
BB
-/ B
aa2)
and
sect
or le
adin
g le
vera
ge ra
tios.
REI
T In
dust
ry D
ivid
end
Yiel
ds
2828
NN
N A
ttrib
utes
Trip
le-n
et lo
ng-te
rm le
ase
Sm
all p
rope
rties
–ty
pica
lly $
2 to
$3.
5 m
illion
inve
stm
ent s
ize
Hig
h la
nd v
alue
per
ass
et
Net
leas
es re
duce
vol
atilit
y of
retu
rns
–re
nt g
row
th d
rops
to b
otto
m li
ne
Larg
e un
iver
se o
f inv
estm
ent o
ppor
tuni
ties
Frag
men
ted
non-
inst
itutio
nal c
ompe
titio
n; N
NN
is a
cle
ar le
ader
Stru
ctur
ed s
ale-
leas
ebac
k ac
quis
ition
s at
gre
at in
itial
cap
rate
s
Exc
elle
nt c
apita
l rec
yclin
g tra
ck re
cord
Stro
ng b
alan
ce s
heet
with
lim
ited
near
term
mat
uriti
es
Sol
id e
arni
ngs
prof
ile w
ith lo
wer
risk
20 c
onse
cutiv
e ye
ars
of in
crea
sed
divi
dend
s w
hile
redu
cing
pay
out r
atio
29
Div
ersi
ficat
ion
Red
uces
Ris
k(As a percentage of base rent –March 31, 2010)
1,01
4 Pr
oper
ties
275+
Ten
ants
43 S
tate
s
Sout
h 23
.5%
Roc
ky
Mou
ntai
n 6.
0%W
est
3.8%
Nor
thea
st
12.2
%So
uthe
ast
29.3
%
Mid
wes
t 25
.2%
30
Top
20 L
ines
of T
rade
Line
of T
rade
1.C
onve
nien
ce s
tore
s26
.5%
2.R
esta
uran
ts –
full
serv
ice
9.2%
3.Au
tom
otiv
e pa
rts6.
7%4.
Thea
ters
6.2%
5.Au
tom
otiv
e se
rvic
e5.
6%6.
Dru
g st
ores
4.4%
7.Bo
oks
4.1%
8.R
esta
uran
ts –
limite
d se
rvic
e3.
2%9.
Spor
ting
good
s3.
1%10
.G
roce
ry2.
9%11
.C
onsu
mer
ele
ctro
nics
2.7%
12.
Furn
iture
2.6%
13.
Offi
ce s
uppl
ies
2.5%
14.
Trav
el p
laza
s2.
5%15
.Be
er, w
ine
and
liquo
r2.
0%16
.H
ealth
and
fitn
ess
1.6%
17.
Equi
pmen
t ren
tal
1.4%
18.
Gen
eral
mer
chan
dise
1.3%
19.
Auto
dea
lers
hips
1.3%
20.
Fina
ncia
l ser
vice
s1.
2%O
ther
9.0%
Tota
l10
0.0%
(As a percentage of base rent –March 31, 2010)
31
Line
of T
rade
Con
cent
ratio
ns
19.5%
18.9%
16.8%
14.9%
14.1%
13.9%
11.1%
10.5%
26.7%
0.0%
5.0%
10.0
%
15.0
%
20.0
%
25.0
%
30.0
%
Con
veni
ence
Stor
esB
ooks
Res
taur
ants
Gov
ernm
ent
Dru
g St
ores
Gro
cery
Con
sum
erEl
ectr
onic
sSp
ortin
gG
oods
Off
ice
Supp
lies
(Concentrations over 10% as a percentage of base rent: 1996
–Q1 2010)
03-3
1-10
Max
imum
Min
imum
32
Con
serv
ativ
e B
alan
ce S
heet
Man
agem
ent
Secu
red
debt
-$3
0.5
milli
on
Uns
ecur
ed d
ebt -
$1,0
11.3
milli
on
Pre
ferre
d eq
uity
-$9
2.0
milli
on
Com
mon
equ
ity -
$1,6
70.7
milli
on
Tota
l Cap
italiz
atio
n: $
2,80
4.4
mill
ion
Inte
rest
cov
erag
e ra
tio:
3.2x
Fixe
d ch
arge
cov
erag
e ra
tio:
2.8x
Uns
ecur
edD
ebt
36.0
%
Secu
red
Deb
t1.
1%
Pref
erre
dEq
uity
3.3%
Com
mon
Equi
ty59
.6%
(As of March 31, 2010 ‐total gross book assets)
33
Top
Tena
nts
Ren
t Cov
erag
eRa
n ge
1.4x
-- 5
.1x
Ave
rage
2.
7xW
eigh
ted
Ave
rage
2.7x
Fixe
d C
harg
e C
over
age
Ran g
e1.
3x --
4.0
xA
vera
ge2.
1xW
eigh
ted
Ave
rage
1.9x Pr
oper
ties
% B
ase
Ren
tPa
ntr y
96
9.0%
Suss
er
868.
7%K
eras
otes
The
atre
s16
6.2%
Road
Ran
ger
343.
9%M
iste
r Car
Was
h40
3.6%
Pull-
A-P
art
203.
5%Pe
p Bo
ys16
3.1%
Best
Bu y
72.
6%Ba
rnes
& N
oble
92.
5%Lo
gans
Roa
dhou
se17
2.3%
CV
S16
2.0%
34
Leas
e Ex
pira
tions
(As a percentage of base rent –March 31, 2010)
0%5%10%
15%
20%
25%
30%
35%
40%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Thereafter
Wei
ghte
d av
erag
e re
mai
ning
leas
e te
rm o
f 12
year
s
35
= N
NN
Top
10
Trad
e C
ateg
ory
Sou
rce:
RB
C C
apita
l Mar
kets
36 36
37
Nat
iona
l Ret
ail P
rope
rtie
s, In
c.(N
YSE:
NN
N)
800-
NN
N-R
EIT
ww
w.n
nnre
it.co
m
37