NNN REIT (CZ2) Risk Analysis
Risk Overview Q4, 2025
Source: the company's latest filing for the period ended Dec 31, 2025, filed Feb 11, 2026
Risk Change Over Time
- Accounting & Financial Operations - Risk 1NNN 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.
NNN periodically assesses its long-lived real estate assets for possible impairment whenever certain events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In such event, NNN would recognize unrealized losses through earnings and write down the carrying value of such assets to a new cost basis based on the estimated fair value of such assets on the date they are considered to be impaired. Such impairment losses reflect non-cash losses at the time of recognition; subsequent disposition or sale of such assets could further affect NNN's future losses or gains, as they are based on the difference between the sale price received and adjusted carrying value of such assets at the time of sale, which may adversely affect NNN's financial condition, liquidity and results of operations.
Risk Highlights Q4, 2025
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 33
- Share Price & Shareholder Rights - Risk 1The 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.
In order to qualify as a REIT, five or fewer individuals, as defined in the Code, may not own, actually or constructively, more than 50 percent in value of NNN's issued and outstanding shares of stock at any time during the last half of each taxable year, other than the first year for which a REIT election is made. Attribution rules in the Code determine if any individual or entity actually or constructively owns NNN's shares of stock under this requirement. Additionally, at least 100 persons must beneficially own NNN's shares of stock during at least 335 days of a taxable year for each taxable year, other than the first year for which a REIT election is made. To help ensure that NNN meets these tests, among other purposes, NNN's charter restricts the acquisition and ownership of NNN's shares of stock. NNN's charter, with certain exceptions, authorizes NNN's Board of Directors to take such actions as are necessary and desirable to preserve NNN's qualification as a REIT while NNN so qualifies. Unless exempted by the Board of Directors, for so long as NNN qualifies as a REIT, NNN's charter prohibits, among other limitations on ownership and transfer of shares of NNN's stock, any person from beneficially or constructively owning (applying certain attribution rules under the Code) more than 9.8% in value of the aggregate of NNN's outstanding shares of stock and more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of NNN's shares of stock. The Board of Directors, in its sole discretion and upon receipt of certain representations and undertakings, may exempt a person (prospectively or retrospectively) from the ownership limits. However, the Board of Directors may not, among other limitations, grant an exemption from these ownership restrictions to any proposed transferee whose ownership, direct or indirect, in excess of the 9.8% ownership limit would result in the termination of NNN's qualification as a REIT. These restrictions on transferability and ownership will not apply, however, if the Board of Directors determines that it is no longer in NNN's best interest to continue to qualify as a REIT or that compliance with the restrictions is no longer required in order for NNN to continue to so qualify as a REIT. These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for NNN's common stock or otherwise be in the best interest of NNN's stockholders.
- Share Price & Shareholder Rights - Risk 2Future issuances of NNN's equity securities could dilute the interest of NNN's common stockholders.
Raising additional capital through the issuance of common or preferred equity securities can dilute or otherwise adversely affect the interests of holders of NNN's common stock and in the case of certain series of preferred equity securities, create a priority interest for holders of such series of preferred equity securities. The interests of NNN's common stockholders could also be diluted by the issuance of shares of common stock pursuant to NNN's performance incentive plan.
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