National Retail Properties Focuses on Tenants for Acquisitions
11/13/2012 | by Allen Kenney

Craig Macnab, chairman and CEO of National Retail Properties (NYSE: NNN) joined for a video interview at REITWorld 2012: NAREIT's Annual Convention at the Manchester Grand Hyatt in San Diego.

National Retail Properties invests in single-tenant retail properties generally subject to long-term, net leases. The company owns a diversified portfolio of 1,506 freestanding retail properties in 47 states with a total gross leasable area of approximately 17.8 million square feet. The properties are leased to more than 300 tenants in 36 industry classifications.

National Retail Properties has had an active 2012 on the transactions front, acquiring $450 million in new properties. Macnab discussed how the company has sourced the acquisitions.

"Obviously, the net lease retail market is large and vibrant. We think it's bigger than the mall space combined. And yet, as a pretty small company, we've got a meaningful market share in a very large market," he said. "In this most recent quarter, all of the $140 million of properties we acquired were directly from retailers, each one of which is what we call a 'relationship tenant,' somebody we've bought a property from in the last 90 to 120 days."

Macnab also discussed National Retail Properties' emphasis on growing its dividend. The company has raised its dividend every year for 23 consecutive years.

"If we continue to keep our portfolio well-occupied, keep our cost of capital low and continue to expand our portfolio through acquisitions, I think there's a reasonable chance we can continue to grow our dividend," Macnab said.

Macnab offered his thoughts on the state of consumer confidence and other factors impacting retail sales heading into 2013. Macnab said he keeps an eye on employment and income trends.

"Whether we like it or not, we're in an environment where the consumers shop 'til they drop. Even though employment is not stellar and saving is less than it should be, consumers seem to find a way to keep spending," he said. "I'm cautiously optimistic that next year employment will improve a little bit. There's always population growth. So, I think retail is going to be solid next year, not stellar."