What Went Wrong at National Retail Properties?
National Retail Properties (NYSE: NNN) is one of the largest net-lease real estate investment trusts (REITs) in the United States, competing with peers like Realty Income (NYSE: O) and W.P. Carey (NYSE: WPC). It has an incredible history of annual dividend increases, with over 30 years of increases under its belt. And yet the coronavirus pandemic has exposed a material weakness in its business model.
Here's what investors need to be thinking about today.
National Retail Properties owns roughly 3,100 single-tenant retail properties that it rents to companies on a net-lease basis. That means that its tenants are responsible for most of the operating costs of the properties they occupy. National Retail revenue essentially comes from the difference between its financing costs to buy properties and the rents it collects. It's a fairly low-risk approach in the real estate investment trust space used by a large number of peers.
Source Fool.com
