Going Shopping for Land and Buildings

National Retail Properties, Inc

National Retail Properties. SOURCE: https://investors.nnnreit.com/investor-information/default.aspx

Buildings and lands – can you think of many businesses that don’t need both? But many businesses don’t want to own the buildings or land. This includes warehouses, hospitals, offices, forests, and retail locations. I think real estate is a good investment for several reasons. It is not easily created so there is a somewhat limited supply in populated areas. It is strategic, in that the location of the properties has more value if it is located in areas of growth and prosperity. It can also be diversified. One REIT that fits my requirements is NNN. I just purchased 100 shares of this REIT yesterday. I may buy more this morning.

The FFO support the dividend payment. Ignore the Payout Ratio when looking at REITS.

Dividends are Delightful

FFO are an important metric for REIT investing.

Divdiend Graph SOURCE: Fidelity Investments

The yield is good, the FFO growth is good, and this is supported by growing revenues.

Geographic Diversification is Important

NNN has a nice website for investors. It is easy to see where they have their properties and the types of properties they have in the very large portfolio of 3,114 properties in 48 states. I wanted ot see that NNN is not heavily invested in California. I was pleased by what I saw. Although California is certainly an attractive state, businesses are fleeing the state due to high costs, rampant inflation, and a host of other state government policies that are making staying in California less than attractive. Businesses are moving to Colorado, Florida, and Texas.

You can see the types of businesses and the top tenants. When buying REITS, it is helpful to look at the REIT’s website.

Company Profile for National Retail Properties, Inc

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2020, the company owned 3,114 properties in 48 states with a gross leasable area of approximately 32.4 million square feet and with a weighted average remaining lease term of 10.7 years.

Fidelity’s Equity Score is a bit more conservative. However, I think that is misguided.

Full Disclosure

Cindie and I own 100 shares of NNN as a long-term investment. We used to own NNN, but I sold my shares. It is now time to bring them back into our REIT holdings. O is our largest REIT holding.

NNN website link. NNN REIT

NNN Investors website link: NNN Investors

NNN Investors portfolio properties link: NNN Portfolio