NNN REIT (NNN) risk factors, FY2024 10-K

Risks Related to NNN's Business and Operations

1. 01Changes in financial and economic conditions, including inflation, may have an adverse impact on NNN, its tenants, and commercial real estate in general
2. 02Loss of rent from tenants would reduce NNN's cash flow
3. 03NNN may not be able to successfully execute its acquisition or development strategies
4. 04NNN may not be able to dispose of Properties consistent with its operating strategy
5. 05Certain provisions of NNN's leases or loan agreements may be unenforceable
6. 06Competition from numerous other REITs, commercial developers, real estate limited partnerships and other investors or a lack of properties for sale may impede NNN's ability to grow
7. 07A natural disaster or impacts of weather or other event resulting in an uninsured loss may adversely affect the operations of NNN's tenants and therefore the ability of NNN's tenants to pay rent, NNN's operating results and asset values of NNN's Property Portfolio
8. 08NNN's ability to fully control the management of its net-leased Properties may be limited
9. 09Bankrupt tenants or vacant Properties could adversely affect NNN's business or financial condition
10. 10As a result, tenant bankruptcies may have a material adverse effect on NNN's results of operations and financial condition. Any of these events could adversely affect NNN's cash flow from operations
11. 11NNN to incur significant expenses to address and remediate or otherwise resolve these kinds of issues
12. 12NNN relies upon cloud computing services to operate certain aspects of its business and any disruption could have an adverse effect on its financial condition and results of operations
13. 13Future investment in international markets could subject NNN to additional risks
14. 14NNN may suffer a loss in the event of a default or bankruptcy of a borrower
15. 15Property ownership through joint ventures and partnerships could limit NNN's control of those investments

Risks Related to Financing NNN's Business

1. 16NNN may be unable to obtain debt or equity capital on favorable terms, if at all
2. 17The amount of debt NNN has and the restrictions imposed by that debt could adversely affect NNN's business and financial condition
3. 18limit NNN's flexibility in conducting its business, which may place NNN at a disadvantage compared to competitors with less debt or debt with less restrictive terms
4. 19NNN is obligated to comply with financial and other covenants in its debt instruments that could restrict its operating activities, and the failure to comply with such covenants could result in defaults that accelerate the payment of such debt
5. 20NNN's ability to meet some of its debt covenants, including covenants related to the condition of the property or payment of real estate taxes, may be dependent on the performance by NNN's tenants under their leases
6. 21limit investments in certain types of assets
7. 22NNN's ability to pay dividends in the future is subject to many factors
8. 23Future issuances of NNN's equity securities could dilute the interest of NNN's common stockholders

Risks Related to – Real Estate Ownership

1. 24Owning real estate and indirect interests in real estate carries inherent risks
2. 25NNN's real estate investments are illiquid
3. 26NNN may be subject to known or unknown environmental liabilities and risks, including but not limited to liabilities and risks resulting from the existence of hazardous materials on or under Properties owned by NNN

Risks Related to – Tax Matters

1. 27NNN's failure to qualify as a REIT for federal income tax purposes could result in significant tax liability
2. 28Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and may negatively affect NNN's operating decisions
3. 29The share ownership restrictions of the Code for REITs and the 9.8% share ownership limit in NNN's charter may inhibit market activity in NNN's shares of stock and restrict NNN's business combination opportunities

Risks Related to – Governmental Laws and Regulations

1. 30Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations
2. 31Non-compliance with Title III of the Americans with Disabilities Act of 1990 and similar state and local laws could have an adverse effect on NNN's business and operating results

General Risks

1. 32NNN's loss of key management personnel could adversely affect performance and the value of its securities
2. 33NNN's failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results and the market value of NNN's securities
3. 34Acts of violence, terrorist attacks or war may affect NNN's Properties, the markets in which NNN operates and NNN's results of operations
4. 35Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial performance
5. 36The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility
6. 37Even if NNN remains qualified as a REIT, NNN faces other tax liabilities that reduce operating results and cash flow
7. 38Adverse legislative or regulatory tax changes could reduce NNN's earnings and cash flow and the market value of NNN's securities