NNN REIT (NNN) risk factors, FY2025 10-K

NNN REIT's FY2025 10-K, filed Feb 11, 2026, lists 35 risk factors in 6 groups. Against the prior year's 38: 7 new, 10 dropped, 13 substantially reworded.

Open NNN in Gloom →
NNN REIT's chart, financials and news, free in your browser.Open NNN in Gloom →
Risk factors listed
356 groups
New this year
7vs 38 last year
Dropped
10since the prior 10-K
Substantially reworded
13of those kept
Section length
7k wordsItem 1A

What the changes say

  • NNN expanded its risk disclosures to address potential artificial intelligence integration challenges, unrated tenant credit assessment methods, and franchise agreement terminations.
  • Total outstanding debt grew to 4,820,424,000 dollars as of December 31, 2025.

What changed since the prior 10-K

New

  • NewRisks Related to NNN's Business and Operations

    NNN's business is dependent upon its tenants successfully operating their businesses and their failure to do so could materially and adversely affect NNN's cash flow and results of operations

    Shifts from in-store to online shopping and changing consumer preferences could adversely impact tenant viability and market rents.

  • NewRisks Related to NNN's Business and Operations

    NNN’s business is significantly dependent on single-tenant properties

    Default by a single-tenant or master lease tenant could cause a complete rental revenue reduction and significant build-out costs.

  • NewRisks Related to NNN's Business and Operations

    NNN's real estate investments are generally illiquid, which could significantly impede its ability to respond to market conditions or adverse changes in the performance of its tenants or its Properties and which would harm NNN’s financial condition

    Real estate investments are illiquid, limiting NNN's ability to promptly sell properties or respond to market conditions.

  • NewRisks Related to NNN's Business and Operations

    A significant portion of Properties are leased to unrated tenants whose credit is evaluated through NNN's internal underwriting and credit analysis. However, the tools and methods utilized by NNN may not accurately assess the investment related credit risk

    NNN relies on internal underwriting for unrated tenants, which may inaccurately assess credit risk and lead to unexpected defaults.

  • NewRisks Related to NNN's Business and Operations

    Some of NNN's tenants operate under franchise or license agreements, which, if terminated or not renewed prior to the expiration of their leases with NNN, would likely impair their ability to pay NNN rent

    Tenant franchise or license terminations could impair their ability to pay rent without granting NNN notice or cure rights.

  • NewRisks Related to NNN's Business and Operations

    NNN may experience a decline in the fair value of its long-lived real estate assets, which may have a material impact on its financial condition, liquidity and results of operations

    Declines in fair value of long-lived real estate assets could force NNN to recognize non-cash impairment losses through earnings.

  • NewGeneral Risks

    The use of AI presents risks and challenges that may adversely impact NNN's business and operating results or that of its tenants

    The adoption of artificial intelligence by NNN or its tenants introduces risks of inaccuracy, bias, and cybersecurity vulnerabilities.

Dropped

  • DroppedRisks Related to NNN's Business and Operations

    Loss of rent from tenants would reduce NNN's cash flow

  • DroppedRisks Related to NNN's Business and Operations

    NNN may not be able to dispose of Properties consistent with its operating strategy

    Loss of rent from tenants would reduce NNN's cash flow.

  • DroppedRisks Related to NNN's Business and Operations

    Certain provisions of NNN's leases or loan agreements may be unenforceable

  • DroppedRisks Related to NNN's Business and Operations

    NNN's ability to fully control the management of its net-leased Properties may be limited

    NNN may not be able to dispose of Properties consistent with its operating strategy.

  • DroppedRisks Related to NNN's Business and Operations

    Bankrupt tenants or vacant Properties could adversely affect NNN's business or financial condition

    Certain provisions of NNN's leases or loan agreements may be unenforceable.

  • DroppedRisks Related to NNN's Business and Operations

    As 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

  • DroppedRisks Related to NNN's Business and Operations

    NNN 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

  • DroppedRisks Related to NNN's Business and Operations

    Property ownership through joint ventures and partnerships could limit NNN's control of those investments

    NNN's ability to fully control the management of its net-leased Properties may be limited.

  • DroppedRisks Related to – Real Estate Ownership

    NNN's real estate investments are illiquid

    Bankrupt tenants or vacant Properties could adversely affect NNN's business or financial condition.

  • DroppedGeneral Risks

    Adverse legislative or regulatory tax changes could reduce NNN's earnings and cash flow and the market value of NNN's securities

    Tenant bankruptcies may have a material adverse effect on NNN's results of operations and financial condition.

Reworded

  • 92% rewrittenGeneral Risks

    Terrorist attacks, other acts of violence, war, pandemics or other unexpected events may affect the markets in which NNN operates and its results of operations

    Expanded to include economic recessions, financial market volatility, and worldwide events alongside terrorist attacks and pandemics.

    Was: Acts of violence, terrorist attacks or war may affect NNN's Properties, the markets in which NNN operates and NNN's results of operations

  • 88% rewrittenGeneral Risks

    NNN'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

    Added specific consequences if internal controls fail, including impaired capital access and dropped common stock trading price.

  • 72% rewrittenRisks Related to NNN's Business and Operations

    Climate change, natural disasters and impacts of weather may adversely affect the operations of NNN's tenants and their ability to pay rent, NNN's operating results and asset values of NNN's Property Portfolio

    Updated to explicitly incorporate chronic and acute perils of climate change affecting property physical condition and demand.

    Was: A 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

  • 67% rewrittenRisks Related to NNN's Business and Operations

    Changes in financial and economic conditions, including inflation and tariffs, may have an adverse impact on NNN and its tenants

    Added tariffs, fluctuating interest rates, and lower levels of liquidity as economic risk factors.

    Was: Changes in financial and economic conditions, including inflation, may have an adverse impact on NNN, its tenants, and commercial real estate in general

  • 57% rewrittenRisks Related to NNN's Business and Operations

    NNN may not be able to successfully execute its acquisition strategies

    Changed historical references from past tense to current operating terminology regarding new markets and unverified tenants.

    Was: NNN may not be able to successfully execute its acquisition or development strategies

  • 52% rewrittenRisks Related to Financing NNN's Business

    NNN 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

    Updated outstanding debt figure to 4,820,424,000 dollars as of December 31, 2025, and added cross-default provisions.

  • 42% rewrittenRisks Related to NNN's Business and Operations

    Investments in international markets could subject NNN to additional risks

    Added host country laws and noted that NNN owned no international properties as of December 31, 2025.

    Was: Future investment in international markets could subject NNN to additional risks

  • 34% rewrittenRisks Related to Tax Matters

    Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and may negatively affect NNN's operating decisions

    Refined REIT qualification language regarding past and present organizational compliance.

  • 33% rewrittenRisks Related to Governmental Laws and Regulations

    Non-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

  • 29% rewrittenRisks Related to Financing NNN's Business

    limit 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

  • 26% rewrittenGeneral Risks

    NNN's loss of key management personnel could adversely affect performance and the value of its securities

  • 25% rewrittenRisks Related to Governmental Laws and Regulations

    NNN 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

  • 20% rewrittenGeneral Risks

    The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility

All 35 risk factors

Headings as the filing states them, in filing order.

Risks Related to NNN's Business and Operations

  1. 01Changes in financial and economic conditions, including inflation and tariffs, may have an adverse impact on NNN and its tenants67% rewritten
  2. 02Owning real estate and indirect interests in real estate carries inherent risks
  3. 03NNN's business is dependent upon its tenants successfully operating their businesses and their failure to do so could materially and adversely affect NNN's cash flow and results of operationsNew
  4. 04NNN’s business is significantly dependent on single-tenant propertiesNew
  5. 05NNN may not be able to successfully execute its acquisition strategies57% rewritten
  6. 06NNN's real estate investments are generally illiquid, which could significantly impede its ability to respond to market conditions or adverse changes in the performance of its tenants or its Properties and which would harm NNN’s financial conditionNew
  7. 07Competition from other REITs, commercial developers, real estate entities and other investors or a lack of properties for sale may impede NNN's ability to grow
  8. 08Climate change, natural disasters and impacts of weather may adversely affect the operations of NNN's tenants and their ability to pay rent, NNN's operating results and asset values of NNN's Property Portfolio72% rewritten
  9. 09A significant portion of Properties are leased to unrated tenants whose credit is evaluated through NNN's internal underwriting and credit analysis. However, the tools and methods utilized by NNN may not accurately assess the investment related credit riskNew
  10. 10Some of NNN's tenants operate under franchise or license agreements, which, if terminated or not renewed prior to the expiration of their leases with NNN, would likely impair their ability to pay NNN rentNew
  11. 11NNN may experience a decline in the fair value of its long-lived real estate assets, which may have a material impact on its financial condition, liquidity and results of operationsNew
  12. 12Investments in international markets could subject NNN to additional risks42% rewritten
  13. 13NNN may suffer a loss in the event of a default or bankruptcy of a borrower

Risks Related to Financing NNN's Business

  1. 14NNN may be unable to obtain debt or equity capital on favorable terms, if at all
  2. 15The amount of debt NNN has and the restrictions imposed by that debt could adversely affect NNN's business and financial condition
  3. 16limit 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 terms29% rewritten
  4. 17NNN 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 debt52% rewritten
  5. 18NNN'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. 19limit investments in certain types of assets

Risks Related to NNN's Common Stock

  1. 20NNN's ability to pay dividends in the future is subject to many factors
  2. 21Future issuances of NNN's equity securities could dilute the interest of NNN's common stockholders
  3. 22The 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 Tax Matters

  1. 23NNN's failure to qualify as a REIT for federal income tax purposes could result in significant tax liability
  2. 24Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and may negatively affect NNN's operating decisions34% rewritten
  3. 25Even if NNN remains qualified as a REIT, NNN may face other tax liabilities that could reduce operating results and cash flow

Risks Related to Governmental Laws and Regulations

  1. 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 NNN25% rewritten
  2. 27Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations
  3. 28Non-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 results33% rewritten

General Risks

  1. 29NNN to incur significant expenses to address and remediate or otherwise resolve these kinds of issues
  2. 30The use of AI presents risks and challenges that may adversely impact NNN's business and operating results or that of its tenantsNew
  3. 31NNN's loss of key management personnel could adversely affect performance and the value of its securities26% rewritten
  4. 32NNN'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 securities88% rewritten
  5. 33Terrorist attacks, other acts of violence, war, pandemics or other unexpected events may affect the markets in which NNN operates and its results of operations92% rewritten
  6. 34Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial performance
  7. 35The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility20% rewritten

Other NNN REIT 10-Ks

  • FY2024 10-K risk factors
    38 risks

    NNN REIT faces substantial debt obligations with $4,373,803,000 in unsecured notes and upcoming maturity balloon payments. Tenant credit risks and bankruptcies threaten rental income, with three tenants currently in Chapter 11. Strict REIT compliance and debt covenants restrict operating flexibility.

    Filed Feb 11, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.