S-4/A 1 nt10004781x4_s4a.htm S-4/A

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As filed with the Securities and Exchange Commission on October 18, 2019

Registration No. 333-233923

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

RW HOLDINGS NNN REIT, INC.
(Exact Name of Registrant as Specified in its Governing Instruments)

Maryland
6798
47-4156046
(State or other jurisdiction
of incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)

3090 Bristol Street, Suite 550
Costa Mesa, California 92626
(855) 742-4862
(Address, Including Zip Codes and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)

Aaron S. Halfacre
President and Chief Executive Officer
RW Holdings NNN REIT, Inc.
3090 Bristol Street, Suite 550
Costa Mesa, California 92626
(855) 742-4862
(Name, Address, Including Zip Codes and Telephone Number,
Including Area Code, of Agent for Service)

With copies to:

Lauren B. Prevost, Esq.
Seth K. Weiner, Esq.
Morris, Manning & Martin, LLP
3343 Peachtree Road, NE
1600 Atlanta Financial Center
Atlanta, Georgia 30326
(404) 504-7744
Shelly A. Heyduk, Esq.
O’Melveny & Myers LLP
610 Newport Center Drive
Suite 1700
Newport Beach, California 92660
(949) 823-7968
Gregory W. Preston, Esq.
Corporate Law Solutions, P.C.
907 Sandcastle Drive
Corona del Mar, California 92625
(949) 760-0107

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable following effectiveness of this Registration Statement and the satisfaction or waiver of all other conditions to the merger described in the Joint Proxy Statement and Prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer
o
Accelerated filer
o
Smaller reporting company
Non-accelerated filer
 
 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) o

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) o

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant files a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement becomes effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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The information in this Joint Proxy Statement and Prospectus is not complete and may be changed. A registration statement relating to the securities has been filed with the Securities and Exchange Commission. RW Holdings NNN REIT, Inc. may not sell any of the securities described in this Joint Proxy Statement and Prospectus until the registration statement is effective. This Joint Proxy Statement and Prospectus is not an offer to sell or exchange the securities, and it is not soliciting an offer to buy these securities, in any state where an offer or sale of the securities is not permitted.

PRELIMINARY - SUBJECT TO COMPLETION, DATED OCTOBER 18, 2019

JOINT PROXY STATEMENT AND PROSPECTUS

RW HOLDINGS NNN REIT, INC.
RICH UNCLES REAL ESTATE INVESTMENT TRUST I

The board of directors of RW Holdings NNN REIT, Inc. (“NNN REIT”) and the board of trust managers of Rich Uncles Real Estate Investment Trust I (“REIT I”) have each unanimously approved an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which REIT I will merge with and into Katana Merger Sub, LP (“Merger Sub”), a wholly owned subsidiary of NNN REIT (the “Merger”). The company following the Merger, which we refer to as the Combined Company, will retain the name “RW Holdings NNN REIT, Inc.” The board of directors of NNN REIT immediately prior to the effective time of the Merger will continue to serve as the board of directors of the Combined Company.

In addition, NNN REIT intends to enter into a series of transactions to become self-managed, as further described herein (the “Self-Management Transaction”).

This Joint Proxy Statement and Prospectus contains important information about NNN REIT, REIT I, the Merger, the Merger Agreement, the Self-Management Transaction and certain other proposals described herein, including a proposed amendment to the declaration of trust for REIT I and proposed amendments to the charter and bylaws for NNN REIT. You should read this entire Joint Proxy Statement and Prospectus carefully because it contains important information about the Merger. In particular, you should read carefully the information under the section entitled “Risk Factors,” beginning on page 38.

NNN REIT is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

If the Merger is approved by the stockholders of NNN REIT and the shareholders of REIT I and the Merger is subsequently completed, each outstanding common share and excess share of REIT I (other than REIT I common shares owned by NNN REIT or any of its wholly owned subsidiaries) will be converted into the right to receive one share of NNN REIT Class C common stock. The ratio of one share of NNN REIT Class C common stock for every one outstanding common share and excess share of REIT I is referred to herein as the “Exchange Ratio.” The exact number of shares of common stock NNN REIT will issue in the Merger will not be determined until the closing of the Merger. Following completion of the Merger, REIT I shareholders will own approximately 33% of the common equity of the Combined Company. Following completion of the Self-Management Transaction, REIT I shareholders will own approximately 29% of the Combined Company on a fully-diluted basis before consideration of the earnout payment associated with the Self-Management Transaction. If all of the earnout milestones associated with the Self-Management Transaction are achieved, REIT I shareholders would own approximately 26% of the Combined Company on a fully diluted basis. As of the date of this filing, there are no outstanding excess shares of REIT I.

The common stock of NNN REIT is not currently listed or traded on any securities exchange or quotation system. The common shares of REIT I are not listed or traded on any securities exchange or quotation system.

We cannot complete the Merger unless the common stockholders of NNN REIT and the common shareholders of REIT I approve their respective Merger proposals described herein. Each of us is asking our stockholders and shareholders to consider and vote on a Merger proposal at NNN REIT’s annual meeting of stockholders and at REIT I’s special meeting of shareholders, as well as the other proposals described in this Joint Proxy Statement and Prospectus. The board of directors of NNN REIT and the board of trust managers of REIT I each unanimously support the Merger and recommends that you vote in favor of their respective Merger proposals.

Your vote is very important. Whether or not you plan to attend your annual stockholders’ or shareholders’ meeting, please take the time to vote as soon as possible.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the Merger or the securities to be issued under this Joint Proxy Statement and Prospectus or determined if this Joint Proxy Statement and Prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

This Joint Proxy Statement and Prospectus is dated October 22, 2019 and is first
being mailed to stockholders of NNN REIT and shareholders of REIT I on or about October 22, 2019.

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Sources of Information

NNN REIT has supplied all information contained in this Joint Proxy Statement and Prospectus relating to NNN REIT, and REIT I has supplied all information contained in this Joint Proxy Statement and Prospectus relating to REIT I.

WHERE YOU CAN FIND MORE INFORMATION

NNN REIT has filed a registration statement on Form S-4 to register the issuance of NNN REIT Class C common stock to REIT I shareholders in the Merger. This Joint Proxy Statement and Prospectus is a part of that registration statement and constitutes a prospectus of NNN REIT and a proxy statement of each of NNN REIT and REIT I for their annual meeting and special meeting, respectively. As allowed by SEC rules, this Joint Proxy Statement and Prospectus does not contain all the information you can find in the registration statement or the exhibits to the registration statement.

NNN REIT and REIT I each file annual, quarterly and current reports and proxy statements and other information with the SEC. All of these filings with the SEC are available to the public free of charge over the Internet at the SEC’s web site at www.sec.gov. Investors may also obtain information about each of NNN REIT and REIT I at www.richuncles.com. The website addresses included herein are not intended to function as hyperlinks, and the information contained on the SEC’s website and on our website is not intended to be a part of this Joint Proxy Statement and Prospectus.

In addition, you may also obtain additional copies of this Joint Proxy Statement and Prospectus by contacting Broadridge Financial Solutions, Inc., our proxy solicitor, at the address and telephone number listed below. You will not be charged for any of these documents that you request.

51 Mercedes Way
Edgewood, New York
Tel: (833) 814-9449 (toll free)

If you would like to request copies of any documents, please do so by December 6, 2019 in order to receive them before the meetings.

When deciding how to cast your vote, you should rely only on the information contained in this Joint Proxy Statement and Prospectus and any related supplemental filings regarding the Joint Proxy Statement and Prospectus. We have not authorized anyone to provide you with information that is different from what is contained in this Joint Proxy Statement and Prospectus. This Joint Proxy Statement and Prospectus is dated October 22, 2019. You should not assume that the information contained in this Joint Proxy Statement and Prospectus is accurate as of any date other than such date, and neither the furnishing of the Joint Proxy Statement and Prospectus to stockholders of NNN REIT and shareholders of REIT I nor the issuance of NNN REIT Class C common stock in connection with the Merger shall create any implication to the contrary.

This Joint Proxy Statement and Prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this Joint Proxy Statement and Prospectus, or the solicitation of a proxy, in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer, solicitation of an offer or proxy solicitation in such jurisdiction.

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RW HOLDINGS NNN REIT, INC.
3090 Bristol Street, Suite 550
Costa Mesa, California 92626

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 17, 2019

To the Stockholders of RW Holdings NNN REIT, Inc.:

You are cordially invited to the annual meeting of stockholders of RW Holdings NNN REIT, Inc. (“NNN REIT”). The annual meeting will be held on December 17, 2019 at 11:00 A.M. (PST), at the offices of RW Holdings NNN REIT, Inc., 3090 Bristol Street, Suite 550, Costa Mesa, California 92626, for the following purposes:

1.Approval of NNN REIT Merger Proposal. To consider and vote on a proposal to approve the merger of Rich Uncles Real Estate Investment Trust I (“REIT I”) with and into Katana Merger Sub, LP (“Merger Sub”) pursuant to the Agreement and Plan of Merger dated as of September 19, 2019 (the “Merger Agreement”), by and among NNN REIT, Rich Uncles NNN REIT Operating Partnership, LP (“NNN REIT OP”), REIT I and Merger Sub (the “NNN REIT Merger Proposal”). A copy of the Merger Agreement is attached to the accompanying Joint Proxy Statement and Prospectus as Annex A.
2.Approval of NNN REIT Charter and Bylaws Amendment Proposals. To consider and vote upon the approval of the following proposals to amend and restate the NNN REIT charter (the “NNN REIT Charter”) and the amended and restated bylaws of NNN REIT (“the NNN REIT Bylaws”) as set forth in Annex D and Annex F, respectively, to the accompanying Joint Proxy Statement and Prospectus:
revisions to conform the provisions of the NNN REIT Charter and the NNN REIT Bylaws to the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association (the “NASAA REIT Guidelines”);
revisions to conform the NNN REIT Charter and the NNN REIT Bylaws to the charter and bylaws of other publicly registered non-traded REITs incorporated in Maryland, including updating and modernizing certain governance and other provisions and ministerial changes; and
revisions to update and modernize the restrictions on ownership and transfer that are intended to assist NNN REIT in maintaining its qualification as a REIT under the Internal Revenue Code of 1986, as amended.
3.Election of Directors. To consider and vote on the election to the NNN REIT board of directors of each of the seven director nominees named in the accompanying Joint Proxy Statement and Prospectus, each to serve until NNN REIT’s 2020 annual meeting of stockholders and until his respective successor is duly elected and qualifies.
4.Ratification of Auditors. To consider and vote on the ratification of the appointment of Squar Milner LLP (“Squar Milner”) as NNN REIT’s independent registered public accounting firm for the year ending December 31, 2019.
5.Adjournment. To consider and vote on a proposal to approve one or more adjournments of the NNN REIT annual meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to approve the proposals at the NNN REIT annual meeting, including to approve the NNN REIT Merger Proposal or any of the NNN REIT Charter and Bylaws Amendment Proposals.
6. Other Business. To transact any other business as may properly come before the NNN REIT annual meeting or any postponement or adjournment of the annual meeting. At the present time, NNN REIT’s board of directors is unaware of any other business that might properly come before the annual meeting.

NNN REIT’s board of directors has fixed October 21, 2019 as the record date for the determination of stockholders entitled to notice of and to vote at the annual meeting or any adjournment or postponement thereof. Only record holders of common stock, including shares of Class C and Class S common stock, as of the close of business on the record date are entitled to notice of and to vote at the annual meeting.

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NNN REIT’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT NNN REIT’S STOCKHOLDERS VOTE “FOR” EACH OF THE ABOVE PROPOSALS AND “FOR” EACH OF THE DIRECTOR NOMINEES NAMED PURSUANT TO PROPOSAL 3.

For further information regarding the matters to be acted upon at the annual meeting, NNN REIT urges you to carefully read the accompanying Joint Proxy Statement and Prospectus. If you have questions about these proposals or would like additional copies of the Joint Proxy Statement and Prospectus, please contact NNN REIT’s proxy solicitor, Broadridge Financial Solutions, Inc., at (833) 814-9449.

Whether you own a few or many shares and whether you plan to attend in person or not, it is important that your shares be voted on matters that come before the annual meeting. None of NNN REIT’s stockholders own more than 10% of NNN REIT’s outstanding shares, so every stockholder’s vote is important to NNN REIT. To make voting easier for you, you may authorize a proxy to vote your shares in one of three ways: (1) by marking your votes on the enclosed proxy card, signing and dating it, and mailing it in the envelope provided; (2) by visiting www.proxyvote.com/rwholdingsnnn and entering the control number that appears on the proxy card; or (3) by telephone at 800-690-6903 and following the recorded instructions, including providing the control number that appears on the proxy card. If you sign and return your proxy card without specifying your choices, it will be understood that you wish to have your shares voted in accordance with the recommendations of NNN REIT’s board of directors.

You are cordially invited to attend the annual meeting. Your vote is very important.

By Order of the Board of Directors,

/s/ Raymond J. Pacini
Raymond J. Pacini
Chief Financial Officer and Secretary of NNN REIT

Costa Mesa, California
October 22, 2019

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RICH UNCLES REAL ESTATE INVESTMENT TRUST I
3090 Bristol Street, Suite 550
Costa Mesa, California 92626

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held December December 17, 2019

To the Shareholders of Rich Uncles Real Estate Investment Trust I:

You are cordially invited to the special meeting of shareholders of Rich Uncles Real Estate Investment Trust I (“REIT I”). The special meeting will be held on December 17, 2019 at 10:00 A.M. (PST), at the offices of REIT I, 3090 Bristol Street, Suite 550, Costa Mesa, California 92626, for the following purposes:

1.Merger. To consider and vote on a proposal to approve the merger of REIT I with and into Katana Merger Sub, LP (“Merger Sub”) pursuant to the Agreement and Plan of Merger dated as of September 19, 2019 (the “Merger Agreement”), by and among REIT I, RW Holdings NNN REIT, Inc. (“NNN REIT”), Rich Uncles NNN Operating Partnership, LP (“NNN REIT OP”) and Merger Sub (the “REIT I Merger Proposal”). A copy of the Merger Agreement is attached to the accompanying Joint Proxy Statement and Prospectus as Annex A.
2. Approval of Amendment to Declaration of Trust. To approve the amendment to REIT I’s Amended and Restated Declaration of Trust, as amended (“Declaration of Trust”), as set forth in Annex H to the accompanying Joint Proxy Statement and Prospectus.
3.Adjournment. To consider and vote on a proposal to authorize one or more adjournments of the special meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes at the special meeting to approve the REIT I Merger Proposal and the proposal to approve the amendment to the Declaration of Trust.
4. Other Business. To transact any other business as may properly come before the meeting or any adjournment or postponement thereof. At the present time, REIT I’s board of trust managers is unaware of any other business that might properly come before the special meeting.

REIT I’s board of trust managers has fixed October 21, 2019 as the record date for the determination of shareholders entitled to notice of and to vote at the special meeting or any adjournment or postponement thereof. Only record holders of common shares as of the close of business on the record date are entitled to notice of and to vote at the special meeting.

REIT I’s BOARD OF TRUST MANAGERS UNANIMOUSLY RECOMMENDS THAT REIT I’S SHAREHOLDERS VOTE “FOR” THE ABOVE PROPOSALS.

For further information regarding the matters to be acted upon at the special meeting, REIT I urges you to carefully read the accompanying Joint Proxy Statement and Prospectus. If you have questions about these proposals or would like additional copies of the Joint Proxy Statement and Prospectus, please contact REIT I’s proxy solicitor, Broadridge Financial Solutions, Inc. at (833) 786-5514.

Whether you own a few or many shares and whether you plan to attend in person or not, it is important that your shares be voted on matters that come before the special meeting. None of REIT I’s shareholders own more than 10% of REIT I’s outstanding shares, so every shareholder’s vote is important to REIT I. To make voting easier for you, you may authorize a proxy to vote your shares in one of three ways: (1) by marking your votes on the enclosed proxy card, signing and dating it, and mailing it in the envelope provided; (2) by visiting www.proxyvote.com/richuncles1 and entering the control number that appears on the proxy card; or (3) by telephone at 800-690-6903 and following the recorded instructions, including providing the control number that appears on the proxy card. If you sign and return your proxy card without specifying your choices, it will be understood that you wish to have your shares voted in accordance with the recommendations of REIT I’s board of trust managers.

You are cordially invited to attend the special meeting. Your vote is very important.

 
By Order of the Board of Trust Managers,
 
/s/ Raymond J. Pacini
 
Raymond J. Pacini
 
Chief Financial Officer and Secretary of REIT I

Costa Mesa, California
October 22, 2019

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE MEETINGS

The following are some questions that NNN REIT stockholders and REIT I shareholders may have regarding the proposed transaction between NNN REIT and REIT I and about each company’s meeting and brief answers to those questions. NNN REIT and REIT I urge you to read carefully this entire Joint Proxy Statement and Prospectus, including the Annexes, Appendices and the other documents to which this Joint Proxy Statement and Prospectus refers, because the information in this section does not provide all the information that might be important to you. Unless stated otherwise, all references in this Joint Proxy Statement and Prospectus to REIT I are to Rich Uncles Real Estate Investment Trust I, a California real estate investment trust; all references to NNN REIT are to RW Holdings NNN REIT, Inc., a Maryland corporation; all references to NNN REIT OP are to Rich Uncles NNN Operating Partnership, LP, a Delaware limited partnership; all references to Merger Sub are to Katana Merger Sub, LP, a Delaware limited partnership and a wholly owned subsidiary of NNN REIT; all references to the Merger Agreement are to the Agreement and Plan of Merger, dated as of September 19, 2019, by and among NNN REIT, REIT I, NNN REIT OP and Merger Sub, as it may be amended from time to time, a copy of which is attached as Annex A to this Joint Proxy Statement and Prospectus; all references to the Merger are to the merger of REIT I with and into Merger Sub pursuant to the terms of the Merger Agreement.

Q:What is the proposed Merger?
A: The board of directors of NNN REIT (the “NNN REIT Board”) and the board of trust managers of REIT I (the “REIT I Board”) are recommending the Merger to combine into a single company. The Merger will be voted upon by the stockholders of NNN REIT and by the shareholders of REIT I. If approved, REIT I will merge with and into Merger Sub, with Merger Sub surviving the Merger as a wholly owned subsidiary of NNN REIT. At that time, in accordance with the applicable provisions of the Delaware Revised Uniform Limited Partnership Act (“DRULPA”), the separate existence of REIT I shall cease.
Q:Why is NNN REIT contemplating the proposed Merger?
A:The NNN REIT Board believes that by combining NNN REIT and REIT I, the Combined Company will achieve on behalf of investors the following:
Strategic and Financial Benefits. The Combined Company is expected to have a pro forma enterprise value of approximately $455 million (based on the estimated net asset value (“NAV”) per share of NNN REIT of $10.16 and the total estimated pro forma outstanding indebtedness of $180 million) and a total market capitalization of approximately $275 million (based on the number of issued and outstanding shares of NNN REIT common stock as of June 30, 2019 and the consideration for the Merger), and is expected to experience lower costs of operation than the two companies experience on a stand-alone basis.
Improvement to Portfolio Characteristics. As a result of the Merger, NNN REIT’s portfolio of properties would improve, among others, in the following respects:
Increase in the number of unique tenants;
Enhanced tenant, industry, and geographic diversification;
Lower weighted average interest rate on property financings;
Reduced aggregate leverage ratio; and
Increased presence in California.
Economies of Scale. The increased size, scale, and diversification of the Combined Company should better position the Combined Company to attract new and additional financing sources, potentially on more favorable terms than are available to NNN REIT. The Merger should also allow for enhanced pricing power with service providers in certain markets and better access to key decision makers with certain tenants and greater presence in the real estate acquisitions market.
Integrated Structure. The integrated organizational structure of the Combined Company should further increase cost and operating efficiencies by simplifying the current business models of the two companies particularly as it relates to eliminating the need for duplicate financial filings.

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Familiarity with Businesses. Because NNN REIT’s management team is the same as REIT I’s management team, the NNN REIT management team has knowledge of the business, operations, financial condition, earnings and prospects of each of NNN REIT and REIT I, as well as of the current and prospective environment in which NNN REIT and REIT I operate, including economic and market conditions.
Improved Optionality. The Combined Company will have an active securities offering registration, enabling it to continue to raise equity and further diversify its portfolio. The Combined Company’s increased size and diversification is expected to be more attractive to new equity investors.

See “The Merger - Recommendation of the Board of Directors of NNN REIT and Its Reasons for the Merger” for additional information.

Q:Why is REIT I contemplating the proposed Merger?
A:The REIT I Board believes that by combining REIT I and NNN REIT, the Combined Company will achieve on behalf of investors the following:
Increased Liquidity Provisions. The Combined Company intends to offer REIT I investors improved liquidity provisions via a monthly, rather than quarterly, share repurchase program as well as the tangential benefits of an ongoing offering that has the potential to continuously increase the count of investors and the total shares outstanding, thereby increasing each individual investor’s diversification as measured by the relative percentage ownership of the Combined Company. Providing for long-term liquidity via a sustainable share repurchase program was a primary goal of the REIT I Board’s strategic alternatives review process that began in January 2019.
More Frequent Distributions. The Combined Company will offer REIT I investors monthly, rather than quarterly, distributions and the ability to reinvest via a monthly distribution reinvestment program, thereby providing REIT I investors a greater opportunity to benefit from more frequent compounding.
Strategic Benefits and Opportunities. The Combined Company will be better positioned to achieve a successful strategic transaction as a result of increased scale. The Combined Company will maintain REIT I’s strategy of focusing on high quality office, industrial and retail properties with creditworthy tenants and long-term leases that are essential to the business operations of the tenant.
Improvement of Portfolio Characteristics. As a result of the Merger, REIT I’s portfolio of properties would improve, among others, in the following respects:
Increased average lease term;
Enhanced tenant, industry and geographic diversification; and
Increased occupancy.
Increased Scale. The enhanced size, scale, and financials of the Combined Company will likely improve access to the capital markets, which can be used to support strategic investments to drive growth opportunities. Following the Merger, the Combined Company’s enterprise value will increase by approximately 184% over REIT I’s enterprise value as of June 30, 2019.
Continued Ownership in a Public Company. The receipt of shares of NNN REIT Class C common stock as Merger Consideration provides REIT I shareholders the opportunity to continue ownership in the Combined Company, which will continue to provide the benefits of an investment in a public company, such as publicly filed quarterly and annual financial statements and periodic reports.

See “The Merger - Recommendation of the Board of Trust Managers of REIT I and Its Reasons for the Merger” for additional information.

Q:What will happen in the proposed Merger?
A:At the effective time of the Merger, each issued and outstanding common share of REIT I (other than REIT I common shares owned by NNN REIT or any of its wholly owned subsidiaries (the “Excluded Holders”) will be converted into the right to receive one share of NNN REIT Class C common stock (with fractional shares receiving a corresponding number of fractional shares of NNN REIT) (the “Merger

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Consideration”). This ratio of one share of NNN REIT Class C common stock for every one outstanding common share and excess share of REIT I is referred to herein as the “Exchange Ratio.” As of the date of this filing, there are no outstanding excess shares of REIT I.

Q:How will NNN REIT stockholders be affected by the Merger and the issuance of shares of NNN REIT Class C common stock in connection with the Merger?
A: After the Merger, each NNN REIT stockholder will continue to own the shares of NNN REIT common stock that such stockholder held immediately prior to the effective time of the Merger. As a result of the Merger, each NNN REIT stockholder will own shares of common stock in a larger company with more assets. However, because NNN REIT will be issuing shares of NNN REIT Class C common stock to REIT I shareholders in exchange for shares of REIT I common shares in the Merger, each outstanding share of NNN REIT common stock immediately prior to the effective time of the Merger will represent a smaller percentage of the aggregate number of shares of the Combined Company common stock outstanding after the Merger. Upon completion of the Merger, we estimate that continuing NNN REIT stockholders will own approximately 67% of the issued and outstanding common stock of the Combined Company (or 58% following the Self-Management Transaction, on a fully diluted basis before consideration of the earnout payment associated with the Self-Management Transaction), and former REIT I shareholders will own approximately 33% of the issued and outstanding common stock of the Combined Company (or approximately 29% following the Self-Management Transaction, on a fully diluted basis before consideration of the earnout payment associated with the Self-Management Transaction). The foregoing calculation is based on the number of shares of NNN REIT common stock held by NNN REIT stockholders and the number of REIT I common shares held by REIT I shareholders as of the record date and does not exclude shareholders who may hold shares of both NNN REIT and REIT I prior to the Merger.
Q:Will my rights as a stockholder of NNN REIT or shareholder of REIT I change as a result of the Merger?
A: The rights of NNN REIT stockholders will be unchanged as a result of the Merger except that each NNN REIT stockholders’ interest in the Combined Company will be diluted due to the issuance of NNN REIT common stock in the Merger and the issuance of Class M OP Units (defined below) in the Self-Management Transaction, as described above. REIT I shareholders will have different rights following the effective time of the Merger due to the differences between the governing documents of NNN REIT and REIT I. For more information regarding the differences in stockholder rights, see “Comparison of Rights of the NNN REIT Stockholders and the REIT I Shareholders” beginning on page 253, including the impact of such rights if REIT I shareholders approve the proposal to amend REIT I’s amended and restated declaration of trust (the “Declaration of Trust”) and the NNN REIT Charter and Bylaws Amendment Proposals.
Q:What is the difference between the Class C shares of common stock and the Class S shares of common stock of NNN REIT?
A:NNN REIT currently has two classes of common stock: Class S shares and Class C shares. The difference between the share classes is that Class S shares are being sold exclusively to non-U.S. Persons as defined under Rule 903 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to an exemption from the registration requirements of the Securities Act under and in accordance with Regulation S promulgated thereunder. In connection with the Merger, NNN REIT will issue Class C shares of its common stock to REIT I shareholders at the Exchange Ratio. The NNN REIT Charter authorizes the NNN REIT Board to issue one or more classes or series of preferred stock, but there are currently no issued and outstanding shares of preferred stock of NNN REIT.
Q:What are the anticipated U.S. federal income tax consequences of the proposed Merger?
A:It is intended that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986 (the “Code”). The closing of the Merger is conditioned on the receipt by NNN REIT of an opinion from counsel to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Assuming that the Merger qualifies as a reorganization, U.S. holders of REIT I common shares generally will not recognize gain or loss for U.S. federal income tax purposes upon the receipt of NNN REIT common stock in exchange for REIT I common shares in connection with the Merger. Holders of REIT I common shares should read the discussion under the

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heading “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 234 and consult their tax advisors to determine the tax consequences to them (including the application and effect of any state, local or non-U.S. income and other tax laws) of the Merger.

Q:Will NNN REIT and REIT I continue to pay distributions prior to the closing of the Merger?
A:Yes. The Merger Agreement permits the authorization and payment by NNN REIT and REIT I of cash distributions in the ordinary course of business and any distribution that is reasonably necessary to maintain its real estate investment trust (“REIT”) qualification and/or to avoid the imposition of U.S. federal income or excise tax.
Q:Will the shares of NNN REIT common stock be publicly traded?
A:No. Like REIT I, NNN REIT’s common stock is currently not listed on a national securities exchange or quoted on an over-the-counter market and, as such, is not publicly traded. NNN REIT may list its shares of common stock in the future; however, it has no present plans to do so, and there is no guarantee that it will do so in the future.
Q:Do any of NNN REIT’s executive officers or directors and any of REIT I’s executive officers and trust managers have interests in the Merger that may differ from those of their stockholders and shareholders?
A:No. None of the executive officers, directors or trust managers is party to an arrangement with NNN REIT or REIT I, or participates in any NNN REIT or REIT I plan, program or arrangement, that provides such executive officer, director or trust manager with financial incentives that are contingent upon the consummation of the Merger.

As of September 30, 2019, Messrs. Vipe Desai, David Feinleib and Jonathan Platt, independent trust managers of REIT I, Jeff Randolph, an independent director of NNN REIT and former trust manager of REIT I, and Raymond Wirta, chairman of the NNN REIT Board and the REIT I Board, beneficially owned 9,661, 10,168, 24,780, 10,827 and 18,864 common shares of REIT I, respectively. Upon the consummation of the Merger, they will each receive a number of shares of NNN REIT common stock consistent with the Exchange Ratio.

Q:Why am I receiving this Joint Proxy Statement and Prospectus?
A:The REIT I Board and NNN REIT Board are using this Joint Proxy Statement and Prospectus to solicit proxies from their respective shareholders or stockholders in connection with the Merger, and NNN REIT is also using it as a prospectus for REIT I shareholders in connection with the issuance of shares of NNN REIT Class C common stock in exchange for shares of REIT I common shares and excess shares in the Merger. This Joint Proxy Statement and Prospectus provides a detailed description of the proposed Merger and information about NNN REIT, REIT I and the Combined Company following the Merger, and you should read these materials carefully. In order for the Merger recommended by the NNN REIT Board and the REIT I Board to proceed, the holders of both NNN REIT common stock and REIT I common shares must vote to approve their respective Merger proposals.

Each of NNN REIT and REIT I will hold separate meetings of their respective stockholders and shareholders to consider and vote on the Merger proposal and to consider and vote on other proposals as described elsewhere in this Joint Proxy Statement and Prospectus. See “Am I being asked to vote on any other proposals at the meeting in addition to the Merger proposal?” below for a description of these other proposals. The enclosed proxy materials allow you to submit a proxy to instruct how your shares are voted at the respective annual or special meetings of NNN REIT or REIT I without attending the applicable meeting in person.

Q:What rights do REIT I shareholders have if they oppose the Merger?
A:REIT I shareholders can vote against the Merger by (i) indicating a vote against the Merger on your proxy card and signing and mailing your proxy card in accordance with the instructions provided, (ii) authorizing your proxy by telephone or the Internet and indicating a vote against the Merger, or (iii) voting against the

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Merger in person at the REIT I special meeting. If the proposal is approved, REIT I shareholders that object to the Merger are not, and will not be, entitled to appraisal rights with respect to determining payment for the fair value of their REIT I common shares. See “The Merger Agreement - No Appraisal Rights” beginning on page 211.

Q:If a REIT I shareholder opposes the Merger, can they redeem their REIT I common shares at the existing REIT I NAV per share of $10.57?
A:No. If the Merger proposal is not approved, the REIT I Board will need to reevaluate all strategic options to determine an alternative recommendation to present to the REIT I shareholders. These alternatives could include, but are not limited to, accepting a lower offer price from a competing bidder, implementing an orderly liquidation of individual assets at prevailing market prices, ending distributions in excess of the minimum required amount to maintain REIT status, ordering new appraisals for REIT I’s real property that could result in a revised lower NAV per share or any combination of these alternatives. If the Merger proposal is approved, REIT I shareholders that oppose the Merger are not, and will not be, entitled to appraisal rights with respect to determining payment for the fair value of their REIT I common shares and would be required to submit a repurchase request of their newly issued shares of NNN REIT Class C common stock in accordance with rules set forth in NNN REIT’s share repurchase program. See “The Merger Agreement - No Appraisal Rights” on page 211.
Q:How did the REIT I Board determine to recommend an offer of $10.16 a share?
A: As detailed in the section entitled, “The Merger - Background of the Merger,” the REIT I Board, through its financial advisor, Cushman & Wakefield, ran an extensive marketing process to determine broad interest in the real estate portfolio. This process resulted in over 9,000 real estate broker companies and over 6,500 investor groups receiving information about REIT I’s assets. From this list, 103 investor groups signed confidentiality agreements enabling them to review detailed property due diligence materials. Of the 103 investor groups, seven formal, yet conditional bids were received with bid amounts ranging from $94 million to $122 million - these bids were all taxable transactions to REIT I shareholders and many were contingent on the bidder obtaining financing. In a successive offer round, the highest bidder increased their bid to $124 million. Following a period of exclusive negotiations, NNN REIT and REIT I agreed to a non-taxable, stock-for-stock transaction at $10.16 per share (which estimates the value of the real estate portfolio at $142.2 million). As the highest nominal and relative offer made, the REIT I Board then engaged SunTrust Robinson Humphrey to determine the fairness of the exchange ratio offered by NNN REIT from a financial point of view to the holders of REIT I common shares (other than the holders of excluded shares). The culmination of these activities resulted in the REIT I Board recommending that investors vote in favor of the Merger.
Q:If I decide to redeem all or a portion of my shares of REIT I or NNN REIT common stock, when can I do so?
A: The share repurchase programs of both REIT I and NNN REIT have been temporarily suspended by each company’s board as a result of the potential Merger, and will remain suspended until such time, if any, as each company’s board approves the resumption of that company’s share repurchase program. If the Merger proposal is approved, then the board of directors of the Combined Company shall determine when, if ever, it is in the best interest of the Combined Company to resume the share repurchase program. However, it is presently anticipated to resume following the closing of the Merger, which is expected to occur in late December 2019 or early January 2020. If the Merger proposal is not approved, both the REIT I Board and the NNN REIT Board will need to determine when and under what conditions lifting the suspensions of the share repurchase programs could be made, if any.
Q:As a REIT I shareholder, will I be subject to a new share repurchase discount with my new NNN REIT shares?
A:No. Existing REIT I shareholders receiving shares of NNN REIT Class C common stock in connection with the Merger are not expected to be subject to any share repurchase discount that is greater than what they would currently be subject to at the time of the closing of the Merger.

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Q:Am I being asked to vote on any other proposals at the meeting in addition to the Merger proposal?
A:NNN REIT. Yes. At the NNN REIT annual meeting, NNN REIT stockholders will be asked to consider and vote upon the following additional proposals:
To approve the following proposals to amend and restate the NNN REIT Charter and the NNN REIT Bylaws (collectively, the “NNN REIT Charter and Bylaws Amendment Proposals”):
revisions to conform the provisions of the NNN REIT Charter and the NNN REIT Bylaws to the NASAA REIT Guidelines;
revisions to conform the NNN REIT Charter and NNN REIT Bylaws to the charter and bylaws of other publicly registered non-traded REITs incorporated in Maryland, including updating and modernizing certain governance and other provisions and ministerial changes; and
revisions to update and modernize the restrictions on ownership and transfer that are intended to assist NNN REIT in maintaining its qualification as a REIT under the Code.
To elect to the NNN REIT Board the seven director nominees named in this Joint Proxy Statement and Prospectus, each to serve until NNN REIT’s 2020 annual meeting of stockholders and until their respective successors are duly elected and qualify.
To ratify the appointment of Squar Milner as NNN REIT’s independent registered public accounting firm for the year ending December 31, 2019.
To approve one or more adjournments of the NNN REIT annual meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to approve the proposals at the NNN REIT annual meeting, including to approve the NNN REIT Merger Proposal or the NNN REIT Charter and Bylaws Amendment Proposals.

See the section entitled “NNN REIT Annual Meeting” for additional information about the NNN REIT annual meeting.

REIT I. Yes. At the REIT I special meeting, REIT I shareholders will be asked to consider and vote upon the following additional proposals:

To approve an amendment to REIT I’s Declaration of Trust.
To approve one or more adjournments of the REIT I special meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes at the REIT I special meeting to approve the REIT I Merger Proposal and the proposal to approve the amendment to the Declaration of Trust.

See the section entitled “REIT I Special Meeting” for additional information about the REIT I special meeting.

Q:Are there risks associated with the Merger that I should consider in deciding how to vote?
A:Yes. There are a number of risks related to the Merger that are discussed in this Joint Proxy Statement and Prospectus. In evaluating the Merger, you should read carefully the detailed description of the risks associated with the Merger described in the section entitled “Risk Factors” and other information included in this Joint Proxy Statement and Prospectus.
Q:Is my vote as a NNN REIT stockholder required to approve the Merger proposal?
A: While there is technically no legal requirement under Maryland law to submit the Merger proposal to the NNN REIT stockholders for approval, NNN REIT believes that a transaction of this size and the transformative nature of increasing NNN REIT's outstanding equity by 51% warrants the approval of NNN REIT's stockholders. For these reasons, NNN REIT has made the NNN REIT’s stockholders’ approval of the Merger a condition to closing the Merger.

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Q:Why is NNN REIT seeking approval of the proposals to amend and restate NNN REIT’s charter and bylaws?
A: NNN REIT is currently offering shares of its Class C common stock pursuant to an offering that is publicly registered with the SEC but is not listed on a national securities exchange. Accordingly, the offering must be registered in every state in which NNN REIT seeks to sell its securities in the offering. Many states require that the charter and bylaws of companies that offer their securities pursuant to a publicly registered offering that is not listed on a national securities exchange must comply with the NASAA REIT Guidelines. NNN REIT’s charter and bylaws currently do not contain all of the NASAA REIT Guideline provisions required to be included by certain state securities administrators, and certain provisions of NNN REIT’s charter and bylaws do not conform to the NASAA REIT Guidelines, which limits the states in which NNN REIT is currently authorized to sell shares of NNN REIT common stock. In order to register the offering in additional states, the NNN REIT Board has approved and recommended that NNN REIT’s stockholders approve the amendment and restatement of NNN REIT’s charter and bylaws to conform to the requirements of the NASAA REIT Guidelines. The NNN REIT Board has also approved amendments to NNN REIT’s charter and bylaws to conform its charter and bylaws to those of other non-traded REITs, which will give the NNN REIT Board and NNN REIT’s management greater flexibility and clarity in overseeing and managing the operations of NNN REIT. Finally, the NNN REIT Board has proposed amendments to the restrictions on stock ownership and transfer included in NNN REIT’s charter to assist NNN REIT in complying with the requirements under the Code related to NNN REIT’s qualifications as a REIT. At the NNN REIT annual meeting, the NNN REIT Board is asking stockholders to approve the NNN REIT Charter and Bylaws Amendment Proposals.

For more information on the proposed amendment and restatement of the NNN REIT Charter and bylaws, see “NNN REIT Annual Meeting – Proposals Submitted to NNN REIT Stockholders – NNN REIT Charter and Bylaws Amendment Proposals” beginning on page 66.

Q:If the NNN REIT Charter and Bylaws Amendment proposals are approved, what will happen?
A:If the proposals to amend and restate NNN REIT’s charter are approved, the NNN REIT Board intends to file the Articles of Amendment and Restatement (the “Articles”), in the form attached hereto as Annex D, with the State Department of Assessments and Taxation of Maryland (“SDAT”) following the NNN REIT annual meeting. Concurrently with acceptance for record of the Articles by SDAT, the second amended and restated bylaws (the “Second Bylaws”) in the form attached hereto as Annex F, will become effective.
Q:What would be the consequences of a failure to approve the NNN REIT Charter and Bylaws Amendment Proposals?
A:If less than all of the proposals to amend and restate the NNN REIT Charter and the NNN REIT Bylaws are approved, the NNN REIT Charter and the NNN REIT Bylaws will be amended and restated to reflect only those amendments which have been approved by NNN REIT stockholders. If the proposals to amend and restate the NNN REIT Charter and the NNN REIT Bylaws are not approved, NNN REIT’s current charter and bylaws will remain in effect, which will likely make it more difficult to implement certain corporate strategies, including expanding the offering of NNN REIT’s shares of Class C common stock into jurisdictions where the offering is not currently registered.

Please note that approval of the NNN REIT Charter and Bylaws Amendment Proposals is not a condition to closing the Merger and, similarly, approval of the NNN REIT Merger Proposal is not a condition to amending and restating the NNN REIT Charter and the NNN REIT Bylaws. If the NNN REIT Charter and Bylaws Amendment Proposals are not approved, there will be no impact on the NNN REIT Merger Proposal, and vice versa.

Q:Why is REIT I seeking approval of the proposal to amend REIT I’s Declaration of Trust?
A:REIT I is seeking REIT I shareholder approval of an amendment to its Declaration of Trust (the “Declaration of Trust Amendment”) in order to exclude the Merger from the substantive and procedural requirements of the REIT I Declaration of Trust applicable to “Roll-Up Transactions” (as defined in the REIT I Declaration of Trust). Pursuant to the Merger Agreement, approval of the Declaration of Trust Amendment is a condition to completing the Merger, and if the Declaration of Trust Amendment is not approved, the Merger will not be completed even if the Merger is approved.

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Under the REIT I Declaration of Trust, a merger involving the issuance of securities of a “Roll-Up Entity” is a Roll-Up Transaction. NNN REIT is considered a “Roll-Up Entity,” therefore the Merger would be a Roll-Up Transaction. One of the substantive requirements of the REIT I Declaration of Trust applicable to Roll-Up Transactions is that REIT I must obtain an appraisal of its assets from a competent independent appraiser as of a date immediately prior to the announcement of the proposed Roll-Up Transaction. The Roll-Up Transaction requirements also would require NNN REIT to either allow REIT I shareholders to elect to retain their interests in REIT I or allow them to receive cash for their shares of REIT I. NNN REIT has not agreed to complete the Merger if REIT I is required to comply with these provisions, and the Merger is specifically conditioned on the approval of the Declaration of Trust Amendment. For more information, see “The REIT I Declaration of Trust Amendment Proposal” beginning on page 82.

Q:What would be the consequences of a failure to approve the proposal to amend REIT I’s Declaration of Trust?
A:Pursuant to the Merger Agreement, approval of the Declaration of Trust Amendment is a condition to completing the Merger, and if the Declaration of Trust Amendment is not approved, the Merger will not be completed even if the Merger is approved.
Q:If I do not want to receive shares of NNN REIT common stock, can I elect to receive cash in connection with the consummation of the Merger?
A.No. REIT I shareholders do not have the option to elect to receive cash in connection with the consummation of the Merger.
Q:When and where are the meetings of the NNN REIT stockholders and the REIT I shareholders?
A: The NNN REIT annual meeting will be held on December 17, 2019 at 11:00 A.M. (PST) at the offices of NNN REIT, 3090 Bristol Street, Suite 550, Costa Mesa, California 92626. If you need directions to the location of the NNN REIT annual meeting, please contact NNN REIT at (855) 742-4862.

The REIT I special meeting will be held on December 17, 2019 at 10:00 A.M. (PST) at the offices of REIT I, 3090 Bristol Street, Suite 550, Costa Mesa, California 92626. If you need directions to the location of the REIT I special meeting, please contact REIT I at (855) 742-4862.

Q:Who can vote at the meetings?
A: NNN REIT Annual Meeting. All holders of NNN REIT Class C common stock or Class S common stock of record as of the close of business on October 21, 2019, the record date for determining stockholders entitled to notice of and to vote at the NNN REIT annual meeting, are entitled to receive notice of and to vote at the NNN REIT annual meeting. As of the record date, there were [15,843,629] shares of NNN REIT common stock outstanding and entitled to vote at the NNN REIT annual meeting, held by approximately [7,000] holders of record, including [15,657,369] shares of NNN REIT Class C common stock and [186,260] shares of NNN REIT Class S common stock. The shares of Class C common stock and Class S common stock vote together as a single class on all matters to be voted on by NNN REIT stockholders at the NNN REIT annual meeting. Each share of NNN REIT common stock is entitled to one vote on each proposal presented at the NNN REIT annual meeting.

REIT I Special Meeting. All holders of REIT I common shares of record as of the close of business on October 21, 2019, the record date for determining shareholders entitled to notice of and to vote at the REIT I special meeting, are entitled to receive notice of and to vote at the REIT I special meeting. As of the record date, there were 7,877,276 common shares of REIT I outstanding and entitled to vote at the REIT I special meeting, held by approximately 2,824 holders of record. Each common share of REIT I is entitled to one vote on each proposal presented at the REIT I special meeting.

Q:Why is my vote important?
A:If you do not submit a proxy or vote in person at the meetings, it may be difficult for us to obtain the necessary quorum to hold the meetings and get the required vote for approval of the Merger, the Declaration of Trust Amendment and the NNN REIT Charter and Bylaws Amendments. NNN REIT’s charter provides that the presence at the meeting, in person or represented by proxy, of stockholders of NNN REIT Class C

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common stock and Class S common stock entitled to cast a majority of all the votes entitled to be cast at the meeting constitutes a quorum. REIT I’s bylaws provide that the presence, in person or by proxy, of REIT I shareholders entitled to cast a majority of all of the votes entitled to be cast at such meeting will constitute a quorum. Abstentions and broker non-votes, if any, are treated as being present at a meeting for purposes of determining whether a quorum is present; however, abstentions and broker non-votes will not be counted as votes cast. A broker non-vote is a vote that is not cast on a non-routine matter because the shares entitled to cast the vote are held in street name, the broker lacks discretionary authority to vote the shares and the broker has not received voting instructions from the beneficial owner. We do not expect any broker non-votes to occur at the NNN REIT annual meeting or the REIT I special meeting because no shares of NNN REIT common stock or REIT I common shares are held by their respective stockholders or shareholders in “street name” through brokerage accounts.

In addition, while abstentions will be counted as “present” for purposes of establishing a quorum at the meetings, they will not be counted as votes cast. In connection with NNN REIT’s annual meeting, an abstention with respect to the NNN REIT Merger Proposal or the NNN REIT Charter and Bylaws Amendment Proposals will have the same effect as a vote AGAINST the proposals and an abstention with respect to any of the seven nominees for election to the NNN REIT Board will have the same effect as a vote AGAINST the nominee. In connection with REIT I’s annual meeting, an abstention with respect to the REIT I Merger Proposal and the proposal to amend the REIT I Declaration of Trust will have the same effect as a vote AGAINST those proposals. Further, if an NNN REIT stockholder or REIT I shareholder does not properly authorize a proxy by Internet, telephone or mail to instruct how to vote his, her or its shares of common stock at the respective annual or special meeting or otherwise does not vote in person at the meeting, such failure will have the effect of a vote AGAINST each of the NNN REIT Charter and Bylaws Amendment Proposals (with respect to the NNN REIT annual meeting) and a vote AGAINST each of the REIT I Merger Proposal and the proposal to amend the REIT I Declaration of Trust (with respect to the REIT I special meeting).

Your vote is very important. To ensure your shares are voted at the NNN REIT annual meeting or the REIT I special meeting, as applicable, you are encouraged to authorize your proxy as promptly as possible.

Q:How does the NNN REIT Board recommend NNN REIT stockholders vote?
A:The NNN REIT Board (including all of its disinterested and independent directors), based on the unanimous recommendation of the NNN REIT special committee of the proposal set forth in the following clause (i), and the NNN REIT Board's independent consideration of the proposals set forth in clauses (ii) through (v), unanimously recommends that NNN REIT stockholders vote (i) FOR the NNN REIT Merger Proposal, (ii) FOR each of the NNN REIT Charter and Bylaws Amendment Proposals, (iii) FOR each of the seven nominees for election to the NNN REIT Board, (iv) FOR the ratification of the appointment of Squar Milner as NNN REIT’s independent registered public accounting firm for the year ending December 31, 2019, and (v) FOR the proposal to approve one or more adjournments of the NNN REIT annual meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to approve the proposals at the NNN REIT annual meeting, including to approve the NNN REIT Merger Proposal or any of the NNN REIT Charter and Bylaws Amendment Proposals.
Q:How does the REIT I Board recommend REIT I shareholders vote?
A:The REIT I Board, based on the unanimous recommendation of the REIT I special committee of the proposal set forth in the following clause (i), and the REIT I Board’s independent consideration of the proposals set forth in clauses (ii) and (iii), unanimously recommends that the REIT I shareholders vote (i) FOR the REIT I Merger Proposal, (ii) FOR the REIT I Declaration of Trust Amendment, and (iii) FOR the proposal to approve one or more adjournments of the REIT I special meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes at the REIT I special meeting to approve the REIT I Merger Proposal and the proposal to approve the amendment to the Declaration of Trust.
Q:What vote is required to approve each item?
A:NNN REIT. Approval of the NNN REIT Merger Proposal requires the affirmative vote of a majority of the shares of Class C common stock and Class S common stock who are present in person or by proxy at the NNN REIT annual meeting. Abstentions and broker non-votes will have the effect of a vote against this proposal.

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Approval of each of the three proposals to amend and restate the NNN REIT Charter and the NNN REIT Bylaws requires the affirmative vote of NNN REIT stockholders entitled to cast a majority of the votes entitled to be cast on the proposal. Abstentions and broker non-votes will have the same effect as a vote against the proposal.

The election of each of the nominees for director requires the affirmative vote of the holders of a majority of the shares of Class C common stock and Class S common stock entitled to vote who are present in person or by proxy at the NNN REIT annual meeting. There is no cumulative voting in the election of NNN REIT's directors. Abstentions and broker non-votes will have the same effect as a vote against this proposal.

Approval of the proposal to ratify the appointment of Squar Milner as NNN REIT’s independent registered public accounting firm for the year ending December 31, 2019 requires the affirmative vote of a majority of the shares of Class C common stock and Class S common stock entitled to vote on, and voted for or against, the proposal. Abstentions and broker non-votes will have no impact on the vote on this proposal.

Approval of the proposal to approve adjournment of the NNN REIT annual meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes at the NNN REIT annual meeting to approve the NNN REIT Merger Proposal or any of the NNN REIT Charter and Bylaws Amendment Proposals requires the affirmative vote of a majority of the shares of Class C common stock and Class S common stock entitled to vote on, and voted for or against, the proposal. Abstentions and broker non-votes will have no impact on the vote on this proposal.

REIT I. Approval of the proposal to approve the REIT I Merger Proposal requires the affirmative vote of a majority of all the votes entitled to be cast on such proposal. Abstentions and broker non-votes will have the same effect as a vote against this proposal.

Approval of the proposal to amend the REIT I Declaration of Trust requires the affirmative vote of a majority of all the votes entitled to be cast on such proposal. Abstentions and broker non-votes will have the same effect as a vote against this proposal.

Approval of the proposal to approve adjournment of the REIT I special meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes at the REIT I special meeting to approve the REIT I Merger Proposal and the proposal to approve the Declaration of Trust Amendment requires the affirmative vote of a majority of all of the votes cast on such proposal. Abstentions and broker non-votes will have no impact on the vote on this proposal.

Q:When is the Merger expected to be completed?
A:NNN REIT and REIT I expect to complete the Merger as soon as reasonably practicable following satisfaction of all of the required conditions set forth in the Merger Agreement. If both REIT I’s shareholders and NNN REIT’s stockholders approve the Merger and REIT I shareholders approve the Declaration of Trust Amendment, and if the other conditions to closing the Merger are satisfied or waived, it is currently expected that the Merger will be completed in late December 2019 or early January 2020. However, there is no guarantee that the conditions to the Merger will be satisfied or that the Merger will close. The above contemplated date cannot be achieved unless NNN REIT stockholders and REIT I shareholders submit their respective votes in a timely manner.
Q:If I am a REIT I shareholder and the Merger is consummated, how will my receipt of NNN REIT common stock in exchange for my REIT I common shares be recorded? Will I have to take any action in connection with the recording of such ownership of NNN REIT Class C common stock? Will such shares of NNN REIT Class C common stock be certificated or in book-entry form?
A: Pursuant to the Merger Agreement, as soon as practicable following the effective time of the Merger, NNN REIT will cause DST Asset Manager Solutions, Inc., its transfer agent, to record the issuance on the stock records of NNN REIT of the amount of NNN REIT Class C common stock equal to the Merger Consideration which is issuable to each holder of REIT I common shares (with fractional shares receiving a corresponding number of fractional shares of NNN REIT) pursuant to the Merger Agreement. If the Merger is consummated, you will not have to take any action in connection with the recording of your ownership of NNN REIT Class C common stock. Shares of NNN REIT Class C common stock issued as Merger Consideration to you will not be certificated and will be in book-entry form and will be recorded in the

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books and records of NNN REIT. If the Merger is consummated, each investor’s client portal, accessed individually at www.richuncles.com, will reflect the change in stock ownership.

Q:Are there other transactions that stockholders should be aware of?
A: Yes. On September 19, 2019, NNN REIT and NNN REIT OP entered into a Contribution Agreement (the “Contribution Agreement”) with BrixInvest, LLC (“BrixInvest”) and Daisho OP Holdings, LLC (“Daisho”), a subsidiary of BrixInvest, pursuant to which, at the closing, Daisho will contribute to NNN REIT OP all of the membership interests in modiv, LLC (“modiv”), which includes substantially all of the assets related to the business of BrixInvest, in exchange for 657,949.5 units of Class M limited partnership interest (“Class M OP Units”) in NNN REIT OP, as further described under “Self-Management Transaction” beginning on page 229. The Self-Management Transaction is expected to close immediately following the consummation of the Merger. The closing of the Self-Management Transaction is subject to the satisfaction or waiver of various closing conditions, and therefore we cannot assure you that closing of the Self-Management Transaction is guaranteed. Following the consummation of the Self-Management Transaction, NNN REIT will be self-managed and acquire the advisory and asset management business of BrixInvest, along with its employees and intellectual property, among other items. Following the consummation of the Self-Management Transaction, we expect that we or an affiliate of ours will serve as the sponsor and advisor of BRIX REIT, Inc. (“BRIX REIT”). Additionally, in the event that the Merger is not consummated but the Self-Management Transaction is consummated, we would expect that we or an affiliate of ours will serve as the sponsor and advisor of REIT I.
Q:Do any of NNN REIT’s executive officers or directors and any of REIT I’s executive officers and trust managers have interests in the Self-Management Transaction that may differ from those of their stockholders and shareholders?
A:None of the executive officers, directors or trust managers is party to an arrangement or participates in any plan, program or arrangement, that provides such executive officer, director or trust manager with financial incentives that are contingent upon the consummation of the Self-Management Transaction. However, certain of the NNN REIT directors and executive officers and REIT I trust managers and executive officers have interests in the Self-Management Transaction that are different from, and may potentially conflict with, the interests of the Combined Company and its stockholders, as further described under “Risk Factors – Risks Related to the Self-Management Transaction – Certain of the NNN REIT directors and executive officers and REIT I trust managers and executive officers have interests in the Self-Management Transaction that are different from, and may potentially conflict with, the interests of the Combined Company and its stockholders.”
Q:What fees will the REIT I and NNN REIT advisors receive in connection with the Merger?
A: All allowable fees have been waived as part of the negotiations for the Self-Management Transaction. Although the REIT I advisor is technically entitled to receive a disposition fee and a subordinated participation fee from REIT I and the NNN REIT advisor is technically entitled to receive an acquisition fee from NNN REIT (“Waived Advisor Fees”), the REIT I advisor and the NNN REIT advisor will waive all rights to receive any and all disposition fees, subordinated participation fees and acquisition fees otherwise due upon a change of control event, disposition of assets or acquisition of assets that would otherwise be due under their respective advisory agreements; provided, however, if the Merger Agreement is terminated as a result of a Superior Competing Transaction (defined below), the REIT I advisor and its affiliate would be entitled to receive the Waived Advisor Fees and may also be entitled to receive a termination fee. See “The Merger Agreement” section beginning on page 210 for more information. In addition, certain fees incurred in connection with the Merger will be reimbursed upon consummation of the Merger. See “Certain Fees and Expense Reimbursements Payable in Connection with the Merger” section on page 26 for more information.
Q:What do I need to do now?
A:After you have carefully read this Joint Proxy Statement and Prospectus, please respond by completing, signing and dating your proxy card and returning it in the enclosed pre-addressed postage-paid envelope or, if available, by submitting your proxy by one of the other methods specified in your proxy card as promptly as possible so that your shares of NNN REIT common stock and/or your shares of REIT I common stock will be represented and voted at the NNN REIT annual meeting or the REIT I special meeting, as applicable.

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If you hold shares of NNN REIT common stock and/or REIT I common shares in an individual retirement account (“IRA”) or 401(k) plan account, you are entitled to direct the custodian or plan trustee of your account on how to vote your shares at the NNN REIT annual meeting or the REIT I special meeting, as applicable. Please follow the voting instructions provided by the custodian or plan trustee of your account. If you do not submit voting instructions to the custodian or plan trustee of your account, your shares may not be voted at the applicable meeting.

The method by which you submit a proxy will in no way limit your right to vote at the NNN REIT annual meeting or the REIT I special meeting, as applicable, if you later decide to attend the meeting in person.

However, if your shares of NNN REIT common stock or your common shares of REIT I are held in the name of a nominee, you must obtain a legal proxy, executed in your favor, from the nominee, to be able to vote in person at the NNN REIT annual meeting or the REIT I special meeting, as applicable. Obtaining a legal proxy may take several days.

Q:Can I revoke my proxy or change my vote after I have delivered my proxy?
A: Yes. You may revoke your proxy or change your vote at any time before your proxy is voted at the NNN REIT annual meeting or the REIT I special meeting, as applicable. For information on how to revoke your proxy or change your vote, see “The NNN REIT Annual Meeting – Revocation of Proxies or Voting Instructions” beginning on page 64 and “The REIT I Special Meeting – Revocation of Proxies or Voting Instructions” beginning on page 80.
Q:What does it mean if I receive more than one set of voting materials for the NNN REIT annual meeting or the REIT I special meeting?
A:You may receive more than one set of voting materials for the NNN REIT annual meeting and/or the REIT I special meeting, as applicable, including multiple copies of this Joint Proxy Statement and Prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares of NNN REIT common stock or your common shares of REIT I both directly and through a self-directed individual retirement account (such as a 401(k) or IRA account), you will receive a separate proxy card or voting instructions for each account in which you hold your shares of NNN REIT common stock or your common shares of REIT I. Please complete, sign, date and return each proxy card and voting instruction card that you receive or, if available, please submit your proxy by telephone or over the Internet.
Q:What happens if I am a stockholder of both NNN REIT and a shareholder of REIT I?
A:You will receive separate proxy cards for each entity and must complete, sign and date each proxy card and return each proxy card in the appropriate pre-addressed postage-paid envelope or, if available, by submitting a proxy by one of the other methods specified in your proxy card or voting instruction card for each entity.
Q:Do I need identification to attend the NNN REIT annual meeting or REIT I special meeting in person?
A:Yes, each NNN REIT stockholder or REIT I shareholder may be asked to present a valid government-issued photo identification, such as a driver’s license or passport, before being admitted to their respective annual or special meeting. Any holder of a proxy from a stockholder must also present the proxy, properly executed, and a valid government-issued photo identification. Each NNN REIT stockholder or REIT I shareholder that holds shares through an IRA or 401(k) plan may also attend the applicable NNN REIT annual meeting or REIT I special meeting but should provide proof of beneficial ownership as of the close of business on the record date for the meeting, such as an account statement reflecting ownership of NNN REIT common stock or REIT common stock (as applicable) as of the close of business on the record date, a copy of the proxy or voting instruction card provided with respect to the IRA or 401(k) account shares, or other similar evidence of ownership.
Q:Will a proxy solicitor be used?
A:Yes. Each of NNN REIT and REIT I has contracted with Broadridge Financial Solutions, Inc. (“Broadridge”) to assist the applicable company in the distribution of proxy materials and the solicitation of proxies. NNN REIT and REIT I expect to pay Broadridge fees of approximately $22,000 and $16,000,

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respectively, to solicit proxies plus other fees and expenses for other services related to this proxy solicitation, including the review of proxy materials, distribution of proxy materials, operating online and telephone voting systems and receipt of executed proxies. NNN REIT and REIT I will also reimburse custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to NNN REIT stockholders and REIT I shareholders, respectively.

Q:Who can answer my questions?
A:If you have any questions about the Merger or any of the proposals to be considered and voted on at each of the NNN REIT annual meeting and the REIT I special meeting or how to submit your proxy or need additional copies of this Joint Proxy Statement and Prospectus, the enclosed proxy card or voting instructions, you should contact:
If you are a NNN REIT stockholder:
If you are a REIT I shareholder:
   
 
RW Holdings NNN REIT, Inc.
Attn: Investor Relations
3090 Bristol Street, Suite 550
Costa Mesa, California 92626
(855) 742-4862
www.richuncles.com
Rich Uncles Real Estate Investment Trust I
Attn: Investor Relations
3090 Bristol Street, Suite 550
Costa Mesa, California 92626
(855) 742-4862
www.richuncles.com
   
 
Broadridge:
Broadridge:
   
 
Broadridge Financial Solutions, Inc.
51 Mercedes Way
Edgewood, New York 11717
(833) 814-9449
Broadridge Financial Solutions, Inc.
51 Mercedes Way
Edgewood, New York 11717
(833) 786-5514

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SUMMARY

The following summary highlights some of the information contained in this Joint Proxy Statement and Prospectus. This summary may not contain all of the information that is important to you. For a more complete description of the Merger, the Merger Agreement and the other transactions contemplated thereby, NNN REIT and REIT I encourage you to read carefully this entire Joint Proxy Statement and Prospectus, including the attached Annexes and Appendices. NNN REIT and REIT I encourage you to read the information about NNN REIT and REIT I that has been filed with the SEC. You may obtain the information filed with the SEC without charge by following the instructions in the section entitled “Where You Can Find More Information.”

The Companies

RW Holdings NNN REIT, Inc.

RW Holdings NNN REIT, Inc. (“NNN REIT”) was incorporated on May 15, 2015 as a Maryland corporation. NNN REIT has the authority to issue 450,000,000 shares of stock, consisting of 50,000,000 shares of preferred stock, $0.001 par value per share, 300,000,000 shares of Class C common stock, $0.001 par value per share, and 100,000,000 shares of Class S common stock, $0.001 par value per share. NNN REIT was formed to primarily invest, directly or indirectly through investments in real estate owning entities, in single-tenant income-producing properties located in the United States, which are leased to creditworthy tenants under long-term net leases. NNN REIT’s goal is to generate current income for investors and long-term capital appreciation in the value of its properties.

NNN REIT holds its investments in real property through special purpose, wholly-owned limited liability companies, which are wholly-owned subsidiaries of Rich Uncles NNN Operating Partnership, LP, a Delaware limited partnership (the “NNN REIT OP”) or through NNN REIT OP. NNN REIT OP was formed on January 28, 2016. NNN REIT is the sole general partner of, and owns a 99% partnership interest in, NNN REIT OP. Rich Uncles NNN LP, LLC, a Delaware limited liability company formed on May 13, 2016 (“NNN LP”), owns the remaining 1% partnership interest in NNN REIT OP and is the sole limited partner. NNN LP is wholly-owned by NNN REIT. NNN REIT owns substantially all of its assets and conducts its operations through the NNN REIT OP. Because NNN REIT conducts substantially all of its operations through the NNN REIT OP, NNN REIT is considered an Umbrella Partnership Real Estate Investment Trust, or UPREIT. Using an UPREIT structure gives NNN REIT an advantage in acquiring properties from persons who might not otherwise sell their properties because of unfavorable tax results. Generally, a sale of property directly to a REIT, or a contribution in exchange for REIT shares, is a taxable transaction to the selling property owner. However, in an UPREIT structure, a seller of a property who desires to defer taxable gain on the sale of property may transfer the property to the operating partnership in exchange for limited partnership units in NNN REIT OP without recognizing gain for tax purposes.

NNN REIT is externally managed by its advisor, Rich Uncles NNN REIT Operator, LLC (the “NNN REIT Advisor”), a Delaware limited liability company, pursuant to an advisory agreement, as amended (the “NNN REIT Advisory Agreement”). The NNN REIT Advisor is wholly-owned by NNN REIT’s sponsor, BrixInvest, whose members include Aaron S. Halfacre and Raymond Wirta, NNN REIT’s Chief Executive Officer and Chairman of the NNN REIT Board, respectively. On each of June 24, 2015 and December 31, 2015, NNN REIT issued 10,000 shares of its Class C common stock to BrixInvest, for a total of 20,000 shares of Class C common stock, at a purchase price of $10.00 per share. As of June 30, 2019 and December 31, 2018, BrixInvest held 10,740 shares of NNN REIT’s Class C common stock.

On July 15, 2015, NNN REIT filed a registration statement on Form S-11 with the U.S. Securities and Exchange Commission (the “SEC”) to register an initial public offering of a maximum of 90,000,000 shares of common stock for sale to the public (the “NNN REIT Primary Offering”). NNN REIT also registered a maximum of 10,000,000 shares of common stock pursuant to NNN REIT’s distribution reinvestment plan (the “NNN REIT Registered DRP Offering” and, together with the NNN REIT Primary Offering, the “NNN REIT Registered Offering”). The SEC declared NNN REIT’s registration statement effective on June 1, 2016 and on July 20, 2016, NNN REIT began offering shares of common stock to the public. Pursuant to its securities offering registered with the SEC, NNN REIT sells shares of its Class C common stock directly to investors, with a minimum investment in shares of $500. Commencing in August 2017, NNN REIT began selling shares of its Class C common stock only to U.S. persons as defined under Rule 903 promulgated under the Securities Act. Under applicable SEC rules, the current registration statement for the NNN REIT Registered Offering was

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scheduled to terminate on June 1, 2019, unless NNN REIT filed a new registration statement on Form S-11 with the SEC prior to such date to extend the NNN REIT Registered Offering in accordance with Rule 415 of the Securities Act. On May 24, 2019, NNN REIT filed a new registration statement on Form S-11 with the SEC so that NNN REIT may continue to offer shares of its Class C common stock. NNN REIT’s current registration statement on Form S-11 will terminate when the new registration statement is declared effective by the SEC. As required by some states, NNN REIT is also required to renew the registration statement for the NNN REIT Registered Offering annually or file a new registration statement to continue the NNN REIT Registered Offering.

On August 11, 2017, NNN REIT began offering up to 100,000,000 shares of its Class S common stock exclusively to non-U.S. Persons as defined under Rule 903 promulgated under the Securities Act pursuant to an exemption from the registration requirements of the Securities Act and in accordance with Regulation S of the Securities Act (the “NNN REIT Class S Offering” and, together with the NNN REIT Registered Offering, the “NNN REIT Offerings”). The Class S common stock has similar features and rights as the Class C common stock with respect to voting and liquidation except that the Class S common stock offered in the NNN REIT Class S offering may be sold through brokers or other persons who may be paid upfront and/or deferred selling commissions and fees.

On January 11, 2019, the NNN REIT Board approved and established an estimated net asset value (“NAV”) per share of NNN REIT’s common stock of $10.16 (unaudited). Effective January 14, 2019, the purchase price per share of NNN REIT’s common stock in the NNN REIT Offerings and share repurchase program increased from $10.05 (unaudited) to $10.16 (unaudited). Through June 30, 2019, NNN REIT had sold 16,834,959 shares of Class C common stock in the NNN REIT Registered Offering, including 1,263,675 shares of Class C common stock sold under its NNN REIT Registered DRP Offering, for aggregate gross offering proceeds of $169,200,530, and 166,448 shares of Class S common stock in the NNN REIT Class S Offering, including 1,154 shares of Class S common stock sold under its dividend reinvestment plan applicable to Class S common stock, for aggregate gross offering proceeds of $1,689,029.

On September 18, 2019, the NNN REIT Board approved the temporary suspension of the NNN REIT Offerings, effective as of the close of business on September 18, 2019. The NNN REIT Offerings will remain suspended until such time, if any, as the NNN REIT Board, in its discretion, may approve resuming the NNN REIT Offerings. In addition, on September 18, 2019, NNN REIT temporarily suspended its distribution reinvestment plan, and all future distributions by NNN REIT will be paid in cash until such time, if any, that the NNN REIT Board approves the resumption of the distribution reinvestment plan.

As of August 31, 2019, NNN REIT had invested in (i) 24 operating properties, comprised of: nine retail properties, 10 office properties and five industrial properties; (ii) one parcel of land, which currently serves as an easement to one of NNN REIT’s office properties; (iii) an approximate 72.7% tenant-in-common interest in a Santa Clara office property (the “TIC Interest”); and (iv) an approximate 4.8% interest in REIT I.

NNN REIT’s principal executive offices are located at 3090 Bristol Street, Suite 550, Costa Mesa, California 92626, and NNN REIT’s phone number is 1-855-742-4862.

Merger Sub is a Delaware limited partnership and a wholly owned subsidiary of NNN REIT that was formed for the purpose of entering into the Merger Agreement and completing the Merger.

Rich Uncles Real Estate Investment Trust I

REIT I, together with its consolidated subsidiaries, is an externally managed, publicly owned non-traded REIT that invests primarily in single tenant income-producing commercial properties which are leased to creditworthy tenants under long-term net leases. While its focus is on single tenant net leased properties, REIT I diversified its portfolio by geography, primarily within California, and by investment size and investment risk with the goal of acquiring a portfolio of income-producing real estate investments that provides attractive and stable returns to its shareholders. The investment objectives and policies may be amended or changed at any time by the REIT I Board if it believes such changes are in the best interests of its shareholders. As of August 31, 2019 REIT I owned an investment portfolio that included ownership of 20 net leased properties, 17 of which are in California, with an occupancy rate of 100% and a weighted average lease term of 4.8 years. At present, REIT I can only acquire additional properties through the proceeds from the sale or refinancing of existing properties.

From April 2012 until July 20, 2016 REIT I was engaged in an initial offering of its common shares that was made to California-only investors and was, therefore exempt from registration under the Securities Act of

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1933, as amended. REIT I continued to sell its common stock to existing shareholders under the REIT I DRIP until reinvestments were suspended on April 23, 2019 pending completion of the strategic alternatives process that preceded the Merger Agreement and the REIT I special meeting. The purchase price was $10.00 per share during the initial offering and, prior to suspension of the REIT I DRIP, reinvestment shares were issued at a purchase price of $10.57 per share (unaudited), which is the estimated NAV per share established by the REIT I Board for REIT I common shares on January 11, 2019, compared with an estimated NAV of $10.66 per share during the previous 12 months and $10.00 per share during all prior years. As of August 31, 2019, an aggregate of $95,018,996 of REIT I common shares had been sold through the prior offering and under the REIT I DRIP.

Subject to certain restrictions and limitations, REIT I’s business is externally managed by BrixInvest (“REIT I Advisor”), which manages its operations and manages its portfolio of core real estate properties and real estate related assets. REIT I’s Advisor is responsible for the management of REIT I, subject to the supervision of the REIT I Board. As a result, REIT I does not have any employees. REIT I pays asset management fees and certain transactional fees to its advisor and also reimburses the REIT I Advisor for certain expenses incurred in providing the advisory services, including those fees associated with personnel provided for administration of REIT I's operations, including reimbursing the advisor for rent and overhead.

REIT I has invested primarily in single tenant income-producing properties which are leased to creditworthy tenants under long-term net leases. REIT I has diversified its portfolio by geography, investment size, and investment risk with the goal of owning a portfolio of income-producing real estate investments that provides attractive and stable returns to its shareholders. REIT I’s investment objectives and policies may be amended or changed at any time by the REIT I Board.

REIT I’s principal executive offices are located at 3090 Bristol Street, Suite 550, Costa Mesa, California 92626, and REIT I’s phone number is 1-855-742-4862.

The Combined Company

On a pro forma basis as of June 30, 2019, the Combined Company will have a total capitalization of approximately $455 million (calculated based on the current estimated net asset value per share of NNN REIT of $10.16 and total estimated pro forma outstanding indebtedness of $180 million). In addition, based on the real estate investments of each of NNN REIT and REIT I as of June 30, 2019, the real estate portfolio of the Combined Company will consist of (i) 44 properties (comprising 19 retail properties, 14 office properties and 11 industrial properties) located in 14 states and having approximately 2.2 million square feet of aggregate leasing space, (ii) one parcel of land, which currently serves as an easement to one of NNN REIT’s office properties; and (iii) the 72.7% TIC Interest. On a pro forma basis, the Combined Company’s portfolio will be 100% occupied, with a weighted average remaining lease term of 6.2 years as of June 30, 2019. Approximately 67% of the aggregate rental income of the Combined Company, calculated on a pro forma basis as of June 30, 2019, will come from properties leased to or guaranteed by an investment grade company or by a company that is a subsidiary of a non-guarantor parent company that is investment grade (or what management believes are generally equivalent ratings). In addition, on a pro forma basis as of June 30, 2019, no tenant will represent more than 8.1% of the aggregate rental income of the Combined Company, with the top five tenants comprising a collective 32.0% of the aggregate rental income of the Combined Company. The top 10 tenants, based on net rent, are as follows, on a pro forma basis:

Sutter Health Corporation
AvAir Inc.
Costco Wholesale Corporation
Cummins, Inc.
3M Company
Northrop Grumann Systems Corporation
Wyndham Destinations
Calculated Risk Bedford, LP (Harley)
Accredo Health
FujiFilm Dimatix

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Summary of NNN REIT’s Business After the Transaction

Following the consummation of the Merger, absent any change in NNN REIT’s investment strategy, NNN REIT expects to continue to invest primarily in single tenant income-producing properties which are leased to creditworthy tenants under long-term net leases. While its focus is on single tenant net leased properties, NNN REIT plans to diversify its portfolio by geography, investment size and investment risk with the goal of acquiring a portfolio of income-producing real estate investments that provides attractive and stable returns to its stockholders. NNN REIT intends to acquire assets consistent with its single-tenant acquisition philosophy by focusing primarily on properties:

where construction is substantially complete to reduce risks associated with construction of new buildings;
leased on a “net” basis, where the tenant is responsible for the payment, and fluctuations in costs, of real estate and other taxes, insurance, utilities, and property maintenance;
located in primary, secondary and certain select tertiary markets;
leased to tenants, at the time we acquire them, with strong financial statements, including investment grade credit quality; and
subject to long-term leases with defined rental rate increases.

NNN REIT will also seek to realize growth in the value of its investment by timing the sale of the properties to maximize asset value.

In addition, the amendment and restatement of NNN REIT’s Charter and NNN REIT’s Bylaws, when it resumes its public common stock offering, may allow NNN REIT to offer and sell shares of common stock in many of the 26 states where the external management requirements of Blue Sky laws have presently disallowed such sales.

The Merger and the Merger Agreement

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, REIT I will merge with and into Merger Sub, with Merger Sub surviving the Merger as a wholly owned subsidiary of NNN REIT.

In the Merger, each common share of REIT I issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive one share of NNN REIT Class C common stock (with fractional shares receiving a corresponding number of fractional shares of NNN REIT). Based on the number of outstanding common shares of REIT I plus the 3,784 shares expected to be issued in December 2019 to the independent trust managers for their service during the fourth quarter of 2019, NNN REIT expects to issue 7,944,533 shares of NNN REIT Class C common stock in the Merger. There will be no payments of cash in lieu of fractional shares.

A copy of the Merger Agreement is attached as Annex A to this Joint Proxy Statement and Prospectus. NNN REIT and REIT I encourage you to carefully read the Merger Agreement in its entirety because it is the principal document governing the Merger.

Reasons for the Merger (See page 185)

At a meeting on September 18, 2019, the NNN REIT Board (with the unanimous vote of the disinterested and independent directors) and the NNN REIT special committee adopted resolutions declaring that the Merger and the transactions contemplated by the Merger Agreement, including the issuance of the shares of NNN REIT Class C common stock in the Merger (the “Merger Transactions”) are fair and reasonable to NNN REIT and on terms and conditions not less favorable to NNN REIT than those available from unaffiliated third parties and are advisable and in the best interest of NNN REIT and its stockholders, and directing that the Merger be submitted for consideration at an annual meeting of the NNN REIT stockholders. The NNN REIT Board has determined that the Merger, including the stock issuance in connection therewith, satisfies many objectives of NNN REIT for its growth and future return to its stockholders. Some of the material factors considered by the NNN REIT Board include:

Strategic Benefits

the Merger accelerates NNN REIT's strategy to focus exclusively on net-lease investing for its balance sheet;
the Merger improves NNN REIT's revenue quality by increasing stable, higher-value real estate rental income from REIT I’s diversified portfolio of assets;

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the Merger is expected to be immediately accretive to the value of the real estate portfolio of the Combined Company and increase the percentage of its dividend covered by real estate rental income;
the Merger will have limited integration risk due to BrixInvest's experience in managing REIT I's assets and operations;
the Merger, through the Self-Management Transaction and the amendment and restatement of NNN REIT’s Charter, may allow NNN REIT to commence the sales of its ongoing public common stock offering in many of the 26 states where the external management requirements of Blue Sky laws have presently disallowed such sales;

Portfolio Benefits

REIT I owns a high-quality real estate portfolio that is aligned with NNN REIT's existing portfolio based on asset type and tenant industries;
the Merger will geographically diversify NNN REIT’s portfolio by providing a significant number of California real estate properties;

Size and Scale Benefits

the Merger will improve operational efficiency by spreading NNN REIT's general and administrative expenses over a larger owned real estate asset base;

Balance Sheet Benefits

the Merger enhances the overall credit profile of NNN REIT and is expected to reduce its ratio of debt to gross assets;
the Merger is expected to improve NNN REIT's overall cost of capital; and

Fairness Opinion

the opinion, dated September 18, 2019, of NNN REIT's financial advisor, UBS Securities LLC (“UBS”), to the NNN REIT Board as to the fairness, from a financial point of view, as of such date, of the aggregate consideration to be paid by NNN REIT in the Merger and the Self-Management Transaction, which opinion was based on and subject to the assumptions made, procedures followed, factors considered and limitations on the review undertaken as more fully described in the section entitled “Opinion of NNN REIT's Financial Advisor.”

The NNN REIT Board also considered a number of potentially negative factors about pursuing the Merger, including:

the average lease maturity of the Combined Company's portfolio will be approximately 6.0 years on a pro forma basis as of August 31, 2019, which is lower than NNN REIT's current average lease maturity of 6.7 years and may increase risks related to re-leasing or dispositions;
the possibility that the Merger may not be completed, or that completion may be unduly delayed, for reasons beyond the control of NNN REIT or REIT I;
the risk that failure to complete the Merger could negatively affect the financial results of NNN REIT and the net asset value of its common stock;
the substantial costs expected to be incurred in connection with the Merger;
the temporary increase in the ratio of secured debt to gross assets as a result of the Merger;
the increased exposure from acquiring REIT I and assets located primarily in California that are not currently part of NNN REIT's existing owned real estate portfolio;
certain REIT I assets have higher risk profiles or may not be aligned with NNN REIT's long-term investment strategy;
the obligation of NNN REIT to pay certain expenses if the Merger is terminated under certain conditions;

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the risk that the efforts necessary to complete the Merger could result in a disruption in the operations of NNN REIT by, among other things, diverting management focus and other resources of NNN REIT from operational matters, strategic opportunities and its day-to-day business; and
the other relevant factors to NNN REIT described under the section titled “Risk Factors.”

At a meeting on September 19, 2019, the REIT I Board (with the unanimous vote of the independent trust managers) and the REIT I special committee adopted resolutions declaring that each of the Merger and the REIT I Declaration of Trust Amendment is advisable and in the best interests of REIT I and the REIT I shareholders, and that the Merger is fair and reasonable to REIT I and the REIT I shareholders and on terms and conditions at least as favorable as those available from unaffiliated third parties, and directing that the Merger and the REIT I Declaration of Trust Amendment be submitted for consideration at a special meeting of the REIT I shareholders. In making their determination, the REIT I Board and the REIT I special committee considered a variety of factors, as described under “The Merger – Recommendation of the Board of Trust Managers of REIT I and Its Reasons for the Merger” beginning on page 186. Some of those factors are:

the average lease maturity of the Combined Company's portfolio will be approximately 6.0 years on a pro forma basis as of August 31, 2019, which is higher than REIT I's current average lease maturity of 4.8 years and may decrease risks related to re-leasing or dispositions;
the greater geographic diversification of the Combined Company's portfolio which will only be 40% California properties as opposed to 80% in the existing REIT I portfolio;
the expectation that the proposed transaction with NNN REIT will provide greater liquidity to REIT I's shareholders by delivering to them shares in a non-traded public company with a substantially greater capacity for annual share repurchases, and with no lock-ups or other restrictions on transfer;
the expectation that the Combined Company will have an expected enterprise value of approximately $455 million and total market capitalization of approximately $275 million, and a more diversified national portfolio of approximately 45 properties (including the TIC Interest) with 2.2 million square feet of commercial real estate leased to approximately 37 companies in 14 states and, as a result of its larger size and enhanced balance sheet, the Combined Company is expected to have greater operating and financial flexibility and better access to capital markets with a lower cost of capital than REIT I on a standalone basis;
the expectation that the Combined Company will acquire a significant number of additional properties through the ongoing sale of NNN REIT common stock in the NNN REIT Registered Offering, as opposed to REIT I’s static 20 property portfolio that, absent capital infusion, prevents REIT I from acquiring additional properties other than with the proceeds from the sale or refinancing of existing properties;
the receipt of shares of NNN REIT common stock in the Merger will be tax-deferred to REIT I shareholders, until such time as the shares of NNN REIT received in the Merger are sold by REIT I shareholders;
the Merger will avoid the $682,560 disposition fee that would be payable to REIT I’s advisor in a similarly valued transaction with a third party;
the REIT I Board and the REIT I special committee each concluded, after consideration and review with its legal and financial advisors, that the transaction with NNN REIT was superior to other possible liquidity alternatives;
REIT I shareholders will have pro forma ownership of approximately 33% of the Combined Company (or approximately 29% following the Self-Management Transaction, on a fully diluted basis before consideration of the earnout payment associated with the Self-Managment Transaction), and continued ownership of shares in the Combined Company will provide the opportunity for REIT I shareholders to benefit from potential increases in the value of the combined portfolio after the closing date through the continuing sale of shares in the NNN REIT Registered Offering, which will allow for significantly more portfolio properties to be acquired, assuming suitable market conditions;

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the Exchange Ratio and the other terms of the Merger Agreement resulted from arm's length negotiations between the REIT I and NNN REIT special committees, with the assistance of their respective advisors;
the ability of REIT I under the Merger Agreement to accept any acquisition proposals from third parties that are considered financially superior to the Merger, after payment of the termination fee;
if approved by REIT I shareholders at the REIT I special meeting, the REIT I Declaration of Trust Amendment will permit the Merger to occur without having to comply with the procedural and substantive requirements of the REIT I Declaration of Trust applicable to “Roll-Up Transactions,” which the REIT I Board and the REIT I special committee believe are impractical; and
the financial analyses reviewed and discussed with the REIT I special committee by representatives of SunTrust Robinson Humphrey, Inc. (“SunTrust Robinson Humphrey”) as well as the oral opinion of SunTrust Robinson Humphrey rendered to the REIT I special committee on September 19, 2019 (which was subsequently confirmed in writing by delivery of SunTrust Robinson Humphrey’s written opinion dated the same date) as to, as of September 19, 2019, the fairness, from a financial point of view, to the holders of REIT I common shares other than the Excluded Holders of the Merger Consideration to be received by such holders (other than the Excluded Holders) in the Merger pursuant to the Merger Agreement after giving effect to the Self-Management Transaction;

The REIT I Board and the REIT I special committee also considered a number of potentially negative factors about the Merger, including:

the dividend that the REIT I shareholders will receive based on the Exchange Ratio and NNN REIT's existing dividend rate will be slightly decreased;
the Exchange Ratio implies a discount of 3.9% to REIT I's estimated net asset value (“NAV”) per share of $10.57 at December 31, 2018, based on NNN REIT’s common stock NAV per share of $10.16 on December 31, 2018;
the challenges inherent in the combination of two business enterprises that are the size of REIT I and NNN REIT and the risks and costs to REIT I if the Merger does not close;
the possibility that the transaction with NNN REIT would not be completed or may be delayed, and the possible adverse effects on the future liquidity options for REIT I that might result if the proposed transaction with NNN REIT were announced and not completed;
the risk that a different liquidity alternative or a decision not to enter into a current liquidity transaction could ultimately have been more beneficial to REIT I shareholders than the proposed transaction with NNN REIT;
the restrictions in the Merger Agreement on the solicitation of a competing transaction and the requirement under the Merger Agreement that REIT I pay NNN REIT a termination fee of $2,540,000 if an unsolicited Superior Competing Transaction offer is accepted, which may deter third parties from making a competing offer for REIT I prior to completion of the Merger;
the fact that the Exchange Ratio is fixed, meaning that there is no walk-away/termination right as a result of declines in NNN REIT's NAV per share before the closing of the Merger;
the risk that the anticipated strategic and financial benefits of the Merger may not be fully realized; and
the other relevant factors to REIT I described under the section titled “Risk Factors.”

For a discussion of the material factors considered by the REIT I Board and the REIT I special committee in reaching their conclusion and the reasons why the REIT I Board and the REIT I special committee determined that the Merger is advisable and in the best interests of REIT I and the REIT I shareholders, please see “The Merger – Recommendation of the Board of Trust Managers of REIT I and Its Reasons for the Merger” beginning on page 186.

Recommendation of the NNN REIT Board (See page 61)

On September 18, 2019, after careful consideration, the NNN REIT Board (including all of the disinterested and independent directors), based on the unanimous recommendation of the NNN REIT special committee, unanimously (i) determined that the Merger and Merger Transactions are fair and reasonable to NNN REIT and

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on terms and conditions not less favorable to NNN REIT than those available from unaffiliated third parties and are advisable and in the best interests of NNN REIT and its stockholders; and (ii) authorized and approved the Merger Agreement, and (iii) authorized and approved the Merger Transactions. Certain factors considered by the NNN REIT special committee and the NNN REIT Board in reaching their decisions to approve the transactions contemplated by the Merger Agreement can be found in the section entitled “The Merger – Recommendation of the Board of Directors of NNN REIT and Its Reasons for the Merger” beginning on page 185.

The NNN REIT Board (including all of its disinterested and independent directors), based on the unanimous recommendation of the NNN REIT special committee of the proposal set forth in the following clause (i), and the NNN REIT Board's independent consideration of the proposals set forth in clauses (ii) through (v), unanimously recommends that NNN REIT stockholders vote (i) FOR the NNN REIT Merger Proposal, (ii) FOR each of the NNN REIT Charter and Bylaws Amendment Proposals, (iii) FOR each of the seven nominees for election to the NNN REIT Board, (iv) FOR the ratification of the appointment of Squar Milner as NNN REIT’s independent registered public accounting firm for the year ending December 31, 2019, and (v) FOR the proposal to approve one or more adjournments of the NNN REIT annual meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to approve the proposals at the NNN REIT annual meeting, including to approve the NNN REIT Merger Proposal or any of the NNN REIT Charter and Bylaws Amendment Proposals.

Recommendation of the REIT I Board (See page 78)

On September 19, 2019, after careful consideration, the REIT I Board (including all the disinterested and independent trust managers), based on the unanimous recommendation of the REIT I special committee, (i) unanimously determined that the transactions contemplated by the Merger Agreement are advisable and in the best interests of REIT I and its shareholders; (ii) authorized and approved the transactions contemplated by the Merger Agreement, (iii) authorized and approved the REIT I Declaration of Trust Amendment and (iv) authorized and approved the Merger Agreement. Certain factors considered by the REIT I special committee and the REIT I Board in reaching their decisions to approve the Merger Agreement and the transactions contemplated by the Merger Agreement can be found in the section entitled “The Merger – Recommendation of the Board of Trust Managers of REIT I and Its Reasons for the Merger” beginning on page 186.

The REIT I Board (including all of its disinterested and independent trust managers), based on the unanimous recommendation of the REIT I special committee of the proposal set forth in the following clause (i), and the REIT I Board’s independent consideration of the proposals set forth in clauses (ii) and (iii), unanimously recommends that the REIT I shareholders vote (i) FOR the REIT I Merger Proposal, (ii) FOR the proposal to amend the REIT I Declaration of Trust, and (iii) FOR the proposal to approve one or more adjournments of the REIT I special meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes at the REIT I special meeting to approve the REIT I Merger Proposal and the proposal to approve the amendment to the Declaration of Trust.

The NNN REIT Annual Meeting (See page 61)

The annual meeting of the NNN REIT stockholders will be held at the offices of NNN REIT, 3090 Bristol Street, Suite 550, Costa Mesa, California 92626 on December 17, 2019, commencing at 11:00 A.M. (PST) for the following purposes:

1.to consider and vote on the NNN REIT Merger Proposal;
2.to consider and vote upon the approval of the following proposals to amend and restate the NNN REIT Charter and the NNN REIT Bylaws:
revisions to conform the provisions of the NNN REIT Charter and the NNN REIT Bylaws to the NASAA REIT Guidelines;
revisions to conform the NNN REIT Charter and the NNN REIT Bylaws to the charter and bylaws of other publicly registered non-traded REITs incorporated in Maryland, including updating and modernizing certain governance and other provisions and ministerial changes; and
revisions to update and modernize the restrictions on ownership and transfer that are intended to assist NNN REIT in maintaining its qualification as a REIT under the Code.

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3.to consider and vote on the election to the NNN REIT Board of each of the seven director nominees named in this Joint Proxy Statement and Prospectus, each to serve until NNN REIT’s 2020 annual meeting of stockholders and until his respective successor is duly elected and qualifies;
4.to consider and vote on the ratification of the appointment of Squar Milner as NNN REIT’s independent registered public accounting firm for the year ending December 31, 2019;
5.to consider and vote on a proposal to approve one or more adjournments of the NNN REIT annual meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes to approve the propsals at the NNN REIT annual meeting, including to approve the NNN REIT Merger Proposal or any of the NNN REIT Charter and Bylaws Amendment Proposals; and
6.to transact such other business as may properly come before the meeting and any adjournment or postponement thereof.

This Joint Proxy Statement and Prospectus also contains information regarding the REIT I special meeting, including the items of business for that special meeting. NNN REIT stockholders are not voting on the proposals to be voted on at the REIT I special meeting.

Approval of the NNN REIT Merger Proposal requires the affirmative vote of a majority of the shares of Class C common stock and Class S common stock who are present in person or by proxy at the NNN REIT annual meeting. Abstentions will have the effect of a vote against this proposal.

Approval of each of the NNN REIT Charter and Bylaws Amendment Proposals requires the affirmative vote of NNN REIT stockholders entitled to cast a majority of the votes entitled to be cast on such proposal. Abstentions will have the same effect as a vote against the proposals.

The election of each of the seven nominees for director to the NNN REIT Board requires the affirmative vote of the holders of a majority of the shares of Class C common stock and Class S common stock entitled to vote who are present in person or by proxy at the NNN REIT annual meeting, if a quorum is present. There is no cumulative voting in the election of NNN REIT's directors. Abstentions with respect to a director nominee will have the same effect as a vote against the nominee.

The ratification of the appointment of Squar Milner as NNN REIT’s independent registered public accounting firm for the year ending December 31, 2019 requires the affirmative vote of a majority of the shares of Class C common stock and Class S common stock entitled to vote on, and voted for or against, such proposal. Abstentions will have no impact on the vote on this proposal.

Approval of the proposal to approve one or more adjournments of the NNN REIT annual meeting to a later date or time, if necessary and appropriate, if there are insufficient votes to approve the proposals at the NNN REIT annual meeting, including to approve the NNN REIT Merger Proposal or any of the NNN REIT Charter and Bylaws Amendment Proposals requires the affirmative vote of a majority of the shares of Class C common stock and Class S common stock entitled to vote on, and voted for or against, such proposal. Abstentions will have no impact on the vote on this proposal.

At the close of business on the record date, directors and executive officers of NNN REIT and their affiliates were entitled to vote [38,034] shares of NNN REIT common stock, or less than 1% of the shares of NNN REIT common stock issued and outstanding on that date. NNN REIT currently expects that all NNN REIT directors and executive officers will vote their shares of NNN REIT common stock in favor of all the proposals to be considered at the NNN REIT annual meeting; provided, however, there is no agreement between NNN REIT and any of its directors or executive officers that they vote in favor of any of the proposals.

Your vote as a NNN REIT stockholder is very important. Accordingly, please sign and return the enclosed proxy card, or submit your proxy over the Internet or telephone, whether or not you plan to attend the NNN REIT annual meeting in person.

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The REIT I Special Meeting (See page 78)

The special meeting of the REIT I shareholders will be held at the offices of REIT I, located at 3090 Bristol Street, Suite 550, Costa Mesa, California 92626 on December 17, 2019, commencing at 10:00 A.M. (PST) for the following purposes:

1.to consider and vote on the REIT I Merger Proposal;
2.to consider and vote on a proposal to amend the REIT I Declaration of Trust; and
3.to consider and vote on a proposal to approve one or more adjournments of the REIT I special meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes at the REIT I special meeting to approve the REIT I Merger Proposal and the proposal to approve the amendment to the Declaration of Trust; and
4.to attend to such other business as may properly come before the meeting and any adjournment or postponement thereof.

This Joint Proxy Statement and Prospectus also contains information regarding the NNN REIT annual meeting, including the items of business for that annual meeting. REIT I shareholders are not voting on the proposals to be voted on at the NNN REIT annual meeting.

Approval of the REIT I Merger Proposal requires the affirmative vote of a majority of all the votes entitled to be cast on such proposal. Abstentions and broker non-votes will have the same effect as a vote against this proposal.

Approval of the proposal to approve the REIT I Declaration of Trust Amendment requires the affirmative vote of a majority of all the votes entitled to be cast on such proposal. Abstentions and broker non-votes will have the same effect as a vote against this proposal.

Approval of the proposal to approve one or more adjournments of the REIT I special meeting to a later date or time, if necessary and appropriate, to solicit additional proxies if there are insufficient votes at the REIT I special meeting to approve the REIT I Merger Proposal and the proposal to approve the amendment to the Declaration of Trust requires the affirmative vote of a majority of all of the votes cast on such proposal. Abstentions and broker non-votes will have no impact on the vote on this proposal.

At the close of business on the record date, trust managers and executive officers of REIT I and their affiliates owned 63,473 common shares of REIT I, or less than 1% of the common shares of REIT I issued and outstanding on that date, and NNN REIT owned 403,980 common shares of REIT I. Pursuant to REIT I's Declaration of Trust, its trust managers or executive officers, NNN REIT and any of their affiliates owning REIT I common shares may not vote on or consent to the REIT I Merger Proposal. Accordingly, the REIT I common shares owned by any REIT I trust manager or executive officer, NNN REIT and any of their affiliates will not be taken into account in determining whether the REIT I Merger Proposal receives the requisite approval. REIT I currently expects that all REIT I trust managers and executive officers and NNN REIT will vote their common shares of REIT I in favor of the Declaration of Trust Amendment and the adjournment proposals to be considered at the REIT I special meeting; provided, however, there is no agreement that they vote in favor of any of those proposals.

Your vote as a REIT I shareholder is very important. Accordingly, please sign and return the enclosed proxy card, or submit your proxy over the Internet or telephone, whether or not you plan to attend the REIT I special meeting in person.

Summary of Risk Factors Related to the Merger

You should consider carefully all the risk factors together with all of the other information included in this Joint Proxy Statement and Prospectus before deciding how to vote. The risks related to the Merger and the related transactions are described under the caption “Risk Factors - Risks Related to the Merger” beginning on page 38. The principal risks relating to the Merger include the following:

The Exchange Ratio is fixed and will not be adjusted in the event of any change in the relative values of NNN REIT or REIT I.
Completion of the Merger is subject to many conditions and if these conditions are not satisfied or waived, the Merger will not be completed, which could result in the requirement that REIT I pay certain termination fees or, in certain circumstances, that NNN REIT or REIT I pay expenses to the other party.

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The pendency of the Merger could adversely affect the business and operations of REIT I and NNN REIT.
The Merger Agreement contains provisions that could discourage a potential competing acquirer of REIT I or could result in any competing proposal being at a lower price than it might otherwise be.
The Merger Agreement includes restrictions on the ability of each of REIT I and NNN REIT to make excess distributions to its stockholders, even if it would otherwise have net income and net cash available to make such distributions.
The shares of NNN REIT Class C common stock to be received by REIT I common shareholders as a result of the Merger will have rights different from the common shares of REIT I.
The Merger and the transactions related thereto are subject to approval by common stockholders of NNN REIT and common shareholders of REIT I.
The Merger Agreement contains provisions that grant the REIT I Board the ability to terminate the Merger Agreement in certain circumstances based on the exercise of the REIT I trust managers’ duties.
If the Combined Company completes a subsequent strategic corporate transaction, the market value ascribed to the shares of common stock of the Combined Company upon the subsequent strategic corporate transaction may be significantly lower than the estimated NAV per share of REIT I and NNN REIT I considered by their respective boards in approving and recommending the Merger.
NNN REIT common stockholders and REIT I common shareholders will own a smaller percentage of a larger company.
There may be unexpected delays in the consummation of the Merger.

Opinion of Financial Advisor to the NNN REIT Special Committee

On September 18, 2019, at a meeting of the NNN REIT special committee held to evaluate the proposed transactions, UBS delivered to the NNN REIT special committee an oral opinion, which opinion was confirmed by delivery of a written opinion, dated September 18, 2019, to the effect that, as of that date and based on and subject to various procedures, assumptions, matters considered and qualifications and limitations described in its opinion, the aggregate consideration to be paid by NNN REIT in the transactions was fair, from a financial point of view, to NNN REIT.

The full text of UBS’ opinion describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken by UBS. UBS’ opinion is attached as Annex B to this Joint Proxy Statement and Prospectus and is incorporated herein by reference. Holders of NNN REIT common stock are encouraged to read UBS’ opinion carefully in its entirety. UBS’ opinion was provided for the benefit of the NNN REIT special committee (in its capacity as such) in connection with, and for the purpose of, its evaluation of the aggregate consideration to be paid by NNN REIT in the transactions, and does not address any other aspect of the transactions or any related transaction. UBS’ opinion does not address the relative merits of the transactions or any related transaction as compared to other business strategies or transactions that might be available to NNN REIT or NNN REIT’s underlying business decision to effect the transactions or any related transaction. UBS’ opinion does not constitute a recommendation to any shareholder as to how such shareholder should vote or act with respect to the transactions or any related transaction.

See “The Merger – Opinion of NNN REIT special committee’s Financial Advisor” beginning on page 188.

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Opinion of Financial Advisor to the REIT I special committee

On September 19, 2019, SunTrust Robinson Humphrey rendered its oral opinion to the REIT I special committee (which was subsequently confirmed in writing by delivery of SunTrust Robinson Humphrey’s written opinion dated September 19, 2019) as to, as of September 19, 2019, the fairness, from a financial point of view, to the holders of REIT I common shares other than the Excluded Holders of the Merger Consideration to be received by such holders (other than the Excluded Holders) in the Merger pursuant to the Merger Agreement after giving effect to the Self-Management Transaction.

SunTrust Robinson Humphrey’s opinion was directed to the REIT I special committee (in its capacity as such) and only addressed the fairness, from a financial point of view, to the holders of REIT I common shares other than the Excluded Holders of the Merger Consideration to be received by such holders (other than the Excluded Holders) in the Merger pursuant to the Merger Agreement after giving effect to the Self-Management Transaction and did not address any other aspect or implication of the Merger or any agreement, arrangement or understanding entered into in connection therewith or otherwise. The summary of SunTrust Robinson Humphrey’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex C to this proxy statement/prospectus and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by SunTrust Robinson Humphrey in preparing its opinion. However, neither SunTrust Robinson Humphrey’s written opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus is intended to be, and they do not constitute, advice or a recommendation as to, or otherwise address, how the REIT I special committee, the REIT I Board or any security holder of REIT I should act or vote with respect to any matter relating to the Merger or otherwise. See “The Merger – Opinion of REIT I’s Special Committee Financial Advisor” beginning on page 199.

Stock Ownership of NNN REIT Directors and Executive Officers

At the close of business on September 30, 2019, the directors and the executive officers of NNN REIT and their affiliates held 38,034 shares of NNN REIT common stock, which represents less than 1% of the outstanding NNN REIT common stock. See “The Companies – RW Holdings NNN REIT, Inc. – Security Ownership of Certain Beneficial Owners and Management.”

Stock Ownership of REIT I Trust Managers and Executive Officers

At the close of business on September 30, 2019, the trust managers and the executive officers of REIT I and their affiliates held an aggregate of 63,473 common shares of REIT I, which represents less than 1% of the outstanding REIT I common shares. See “The Companies – Rich Uncles Real Estate Investment Trust I – Security Ownership of Certain Beneficial Owners and Management.”

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Certain Fees and Expense Reimbursements Payable in Connection with the Merger

As of the date of this Joint Proxy Statement and Prospectus, the following fees and expense reimbursements are payable or have been paid in connection with the Merger:

Payee
Description
Amount
Non-Affiliated Business and Financial Advisors of NNN REIT (various)
Fees and expenses incurred in connection with the Merger, pursuant to service agreements with such non-affiliated business and financial advisors of NNN REIT, which service agreements were negotiated at arm’s length and on market terms.
Approximately $1,750,000 (aggregate)
Non-Affiliated Business and Financial Advisors of REIT I (various)
Fees and expenses incurred in connection with the Merger, pursuant to service agreements with such non-affiliated business and financial advisors of REIT I, which service agreements were negotiated at arm’s length and on market terms.
Approximately $1,182,560 (aggregate)

Directors and Executive Officers of the Combined Company (See page 208)

The NNN REIT Board and its executive officers immediately prior to the effective time of the Merger will continue to serve as the directors and executive officers of the Combined Company. For a complete list of the directors and executive officers of the Combined Company, see “The Merger-Directors and Executive Officers of the Combined Company.”

No Shareholder Appraisal Rights in the Merger

No dissenters’ or appraisal rights, or rights of objecting stockholders under Title 3 Subtitle 2 of the MGCL will be available to holders of NNN REIT common stock with respect to the Merger or other transactions contemplated by the Merger Agreement.

No dissenters’ or appraisal rights, or rights of objecting shareholders under California law will be available to holders of REIT I common shares with respect to the Merger or the other transactions contemplated by the Merger Agreement.

Conditions to Completion of the Merger

A number of conditions must be satisfied or waived, where legally permissible, before the Merger can be consummated. These include, among others:

the approval of the Merger by NNN REIT’s stockholders;
the approval of the Merger by REIT I’s shareholders;
receipt of regulatory approvals;
the absence of an injunction or law prohibiting the Merger;
the truth and correctness of the representations and warranties of the parties, subject to the materiality standards contained in the Merger Agreement;
the effectiveness of the registration statement on Form S-4, of which this Joint Proxy Statement and Prospectus is a part; and
the absence of a material adverse effect with respect to either NNN REIT or REIT I.

Neither NNN REIT nor REIT I can give any assurance as to when, or if, all of the conditions to the consummation of the Merger will be satisfied or waived or that the Merger will occur.

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Regulatory Approvals in Connection with the Merger

The Merger may implicate certain regulatory requirements of municipal, state and federal, domestic or foreign, governmental agencies and authorities, including those relating to the offer and sale of securities. Neither NNN REIT nor REIT I is aware of any regulatory approvals that are expected to prevent the consummation of the Merger. Under the Merger Agreement, NNN REIT and REIT I have each agreed to use its reasonable best efforts to take all actions necessary, proper or advisable to complete the Merger and the other transactions contemplated by the Merger Agreement.

No Solicitation and Change in Recommendation with Competing Proposal

Under the terms of the Merger Agreement, NNN REIT is prohibited from soliciting competing proposals to acquire all, or a significant part, of NNN REIT. However, prior to receiving approval of the Merger by the stockholders of NNN REIT, NNN REIT may negotiate with a third party after receiving an unsolicited written proposal if the NNN REIT Board determines in good faith that the unsolicited proposal constitutes or is reasonably likely to result in a Superior Proposal (as defined in the Merger Agreement) and the NNN REIT Board determines that failure to negotiate would be inconsistent with the duties of the NNN REIT directors. Once a third party proposal is received, NNN REIT must notify REIT I within 24 hours following receipt of the proposal and keep REIT I informed of the status and terms of the proposal and associated negotiations.

NNN REIT may withdraw or modify its recommendation to the NNN REIT stockholders with respect to the Merger, and enter into an agreement to consummate a competing transaction with a third party if the NNN REIT Board determines in good faith that the competing proposal is a Superior Proposal and if NNN REIT, in connection with terminating the Merger Agreement, pays a $2,540,000 termination fee to REIT I. Prior to any such termination, NNN REIT generally must provide REIT I with notice at least five business days prior to such termination and an opportunity to revise the terms of the Merger Agreement to make the competing proposal no longer a Superior Proposal.

Under the terms of the Merger Agreement, REIT I is prohibited from soliciting competing bids. However, prior to receiving approval of the Merger by the shareholders of REIT I, REIT I may negotiate with a third party after receiving an unsolicited written proposal if the REIT I Board determines in good faith that the unsolicited proposal constitutes or is reasonably likely to result in a Superior Proposal (as defined in the Merger Agreement) and the REIT I Board determines that failure to negotiate would be inconsistent with the duties of the REIT I directors. Once a third party proposal is received, REIT I must notify NNN REIT within 24 hours following receipt of the proposal and keep NNN REIT informed of the status and terms of the proposal and associated negotiations.

REIT I may withdraw or modify its recommendation to the REIT I shareholders with respect to the Merger, and enter into an agreement to consummate a competing transaction with a third party if the REIT I Board determines in good faith that the competing proposal is a Superior Proposal and if REIT I, in connection with terminating the Merger Agreement, pays a $2,540,000 termination fee to NNN REIT. Prior to any such termination, REIT I generally must provide NNN REIT with notice at least five business days prior to such termination and an opportunity to revise the terms of the Merger Agreement to make the competing proposal no longer a Superior Proposal.

For more information regarding the limitations on the REIT I and NNN REIT Boards to consider other proposals, see “The Merger Agreement - Covenants and Agreements - No Solicitation and Change in Recommendation with Competing Proposal or Intervening Event” beginning on page 218.

Termination

The Merger Agreement may be terminated under certain circumstances, including, but not limited to, by either NNN REIT or REIT I (in each case, with the prior approval of the NNN REIT and REIT I special committees) if the Merger has not been consummated on or before 11:59 p.m. Pacific time on March 31, 2020, if a final and non-appealable order is entered permanently restraining or otherwise prohibiting the Merger, if the approval of the Merger by the stockholders of NNN REIT or the shareholders of REIT I (each, a “Stockholder Approval”) has not been obtained or upon a material uncured breach by the other party that would cause the closing conditions in the Merger Agreement not to be satisfied. In addition, REIT I may terminate the Merger Agreement upon written notice to NNN REIT (i) if REIT I has properly accepted a Superior Proposal at any time prior to receipt by REIT I of the Stockholder Approval pursuant to the terms of the Merger Agreement,

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(ii) upon an Adverse Recommendation Change (as defined in the Merger Agreement) by NNN REIT, (iii) upon the NNN REIT Board approving, adopting or publicly endorsing a Competing Proposal (as defined in the Merger Agreement), (iv) upon the failure of the NNN REIT Board to recommend against acceptance of any tender offer for shares of NNN REIT’s common stock that constitutes a Competing Proposal, or (v) upon NNN REIT’s material violation of certain provisions of the Merger Agreement that has not been or cannot be cured.

NNN REIT may terminate the Merger Agreement upon written notice to REIT I (i) if NNN REIT has properly accepted a Superior Proposal at any time prior to receipt by NNN REIT of the Stockholder Approval pursuant to the terms of the Merger Agreement, (ii) upon an Adverse Recommendation Change by REIT I, (iii) upon the REIT I Board approving, adopting or publicly endorsing a Competing Proposal, (iv) upon the failure of the REIT I Board to recommend against acceptance of any tender offer for REIT I common shares that constitutes a Competing Proposal, (v) upon the failure of the REIT I Board to include its recommendation in favor of the Merger in the Joint Proxy Statement and Prospectus to be distributed to REIT I’s shareholders or (vi) upon REIT I’s material violation of certain provisions of the Merger Agreement that has not been or cannot be cured.

For more information regarding the rights of NNN REIT and REIT I to terminate the Merger Agreement, see “The Merger Agreement - Termination of the Merger Agreement” beginning on page 225.

Termination Fee and Expense Reimbursements

Generally, all fees and expenses incurred in connection with the Merger and the transactions contemplated by the Merger Agreement will be paid by the party incurring those expenses. However, each of NNN REIT and REIT I may be obligated to pay the other party an amount up to $1,000,000 in expense reimbursement if the Merger Agreement is terminated under certain circumstances.

If the Merger Agreement is terminated in connection with REIT I’s acceptance of a Superior Proposal, approval of a Competing Proposal or making an Adverse Recommendation Change prior to approval of the Merger by the REIT I shareholders, then REIT I must pay to NNN REIT a termination payment of $2,540,000. If the Merger Agreement is terminated in connection with NNN REIT’s acceptance of a Superior Proposal, approval of a Competing Proposal or making an Adverse Recommendation Change prior to approval of the Merger by the NNN REIT stockholders, then NNN REIT must pay to REIT I a termination payment of $2,540,000.

For more information regarding the termination fee and the expense reimbursement, see “The Merger Agreement - Termination of the Merger Agreement - Termination Fee and Expense Reimbursement” beginning on page 227.

Self-Management Transaction

On September 19, 2019, NNN REIT and NNN REIT OP entered into a Contribution Agreement with BrixInvest and Daisho, pursuant to which Daisho will contribute to NNN REIT OP all of the membership interests in modiv and certain assets related to the business of BrixInvest, in exchange for 657,949.5 Class M OP Units of NNN REIT OP. As part of the Self-Management Transaction, NNN REIT will enter into a series of agreements and amendments to existing agreements as further described below.

BrixInvest is the parent company of Daisho, which is in turn, prior to the Self-Management Transaction, the parent company of modiv. Prior to the closing of the Self-Management Transaction, (i) substantially all of BrixInvest’s assets and liabilities will be contributed to modiv and (ii) BrixInvest will spin off Daisho to the BrixInvest members. Pursuant to the Self-Management Transaction, Daisho will contribute to NNN REIT OP all of the membership interests in modiv in exchange for the Class M OP Units. As a result of these transactions and the Self-Management Transaction, BrixInvest, through its subsidiary, Daisho, will transfer all of its operating assets, including but not limited to (a) all personal property used in or necessary for the conduct of BrixInvest’s business, (b) all intellectual property, goodwill, licenses and sublicenses granted and obtained with respect thereto and certain domain names, (c) certain continuing employees, and (d) certain other assets and liabilities, to modiv, and will distribute 100% of the ownership interests in Daisho to the members of BrixInvest. It is anticipated that the closing of the Self-Management Transaction will occur after the closing of the Merger; however the closing of the Self-Management Transaction is not contingent on the closing of the Merger.

As a result of the Self-Management Transaction, NNN REIT will become self-managed and will acquire the advisory and asset management business of BrixInvest. Accordingly, upon closing the Self-Management

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Transaction, we anticipate that we or an affiliate of ours will become the sponsor and advisor of BRIX REIT. Additionally, in the event that the Merger is not consummated but the Self-Management Transaction is consummated, we would expect that we or an affiliate of ours will serve as the sponsor and advisor of REIT I.

For more information regarding the Self-Management Transaction, see “Self-Management Transaction” beginning on page 229.

Material U.S. Federal Income Tax Consequences of the Merger

NNN REIT and REIT I intend that the Merger of REIT I with and into Merger Sub, a wholly owned subsidiary of NNN REIT, will qualify as a reorganization within the meaning of Section 368(a) of the Code. The closing of the Merger is conditioned on the receipt of a legal opinion from NNN REIT’s legal counsel that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Assuming that the Merger qualifies as a reorganization, U.S. holders of REIT I common shares generally will not recognize gain or loss for U.S. federal income tax purposes upon the receipt of NNN REIT common stock in exchange for REIT I common shares in connection with the Merger.

For further discussion of the material U.S. federal income tax consequences of the Merger and the ownership of common stock of the Combined Company, see “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 234.

Holders of REIT I common shares should consult their tax advisors to determine the tax consequences to them (including the application and effect of any state, local or non-U.S. income and other tax laws) of the Merger.

Accounting Treatment of the Merger

The Merger is expected to be accounted for as an asset acquisition in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 with NNN REIT treated as the accounting acquirer. The assets (including identifiable intangible assets) and liabilities (including executory contracts and other commitments) of REIT I as of the effective time of the Merger will be recorded at their respective fair values and added to those of NNN REIT. Transaction costs incurred by NNN REIT will be capitalized and transaction costs incurred by REIT I will be expensed in the periods in which the costs are incurred and services are received. Any excess of purchase price over the fair values will be recorded as goodwill, and any deficiency is considered negative goodwill and recorded as a gain on the Combined Company’s results of operations on the date of acquisition. Consolidated financial statements of the Combined Company issued after the consummation of the Merger will reflect such fair values, but will not be restated retroactively to reflect the historical consolidated financial position or results of operations of REIT I.

Comparison of Rights of NNN REIT Stockholders and REIT I Shareholders

If the Merger is consummated, shareholders of REIT I will become stockholders of the Combined Company. The rights of REIT I shareholders are currently governed by and subject to the provisions of the California General Corporation Law and the Declaration of Trust and bylaws of REIT I. Upon consummation of the Merger, the rights of the former REIT I shareholders who receive shares of NNN REIT Class C common stock in the Merger will be governed by the MGCL and NNN REIT’s charter and bylaws, rather than the California General Corporation Law and the amended and restated declaration of trust and bylaws of REIT I. Additionally, at the NNN REIT annual meeting, NNN REIT stockholders are voting on three proposals to approve an amended and restated charter and amended and restated bylaws of NNN REIT. See “Amendment and Restatement of the NNN REIT Charter and the NNN REIT Bylaws” on page 30 for additional information on the proposed amendment and restatement of the NNN REIT Charter and the NNN REIT Bylaws.

For a summary of certain differences between the rights of NNN REIT stockholders and REIT I shareholders, see “Comparison of Rights of NNN REIT Stockholders and REIT I Shareholders” beginning on page 253.

Amendment of the REIT I Declaration of Trust

If the proposal related to the REIT I Declaration of Trust Amendment is approved, the REIT I Declaration of Trust Amendment in the form attached hereto as Annex H to this Joint Proxy Statement and Prospectus will remove the provisions governing Roll-Up Transactions that otherwise would have applied to the Merger. For more information on the proposed amendment of the REIT I Declaration of Trust, see “REIT I Declaration of Trust Amendment Proposal” beginning on page 82.

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Amendment and Restatement of the NNN REIT Charter and the NNN REIT Bylaws

If each of the NNN REIT Charter and Bylaws Amendment Proposals are approved, the NNN REIT Board intends to file the Articles, in the form attached as Annex D to this Joint Proxy Statement and Prospectus, with the SDAT following the NNN REIT annual meeting. Concurrently with acceptance for record of the Articles by SDAT, the Second Bylaws, in the form attached as Annex F to this Joint Proxy Statement and Prospectus, will become effective. If less than all of the NNN REIT Charter and Bylaws Amendment Proposals are approved, the NNN REIT Charter and the NNN REIT Bylaws will be amended and restated to reflect only those amendments which have been approved by NNN REIT stockholders. If the NNN REIT Charter and Bylaws Amendments Proposals are not approved, NNN REIT’s current charter and bylaws will remain in effect. For more information on the proposed amendment and restatement of the NNN REIT Charter and the NNN REIT Bylaws, see “Proposals Submitted to NNN REIT Stockholders – NNN REIT Charter and Bylaw Amendment Proposals” beginning on page 66.

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Selected Historical Financial Information of NNN REIT

The following selected historical financial information for each of the years during the four-year period ended December 31, 2018 and the selected balance sheet data as of December 31, 2018, 2017, 2016 and 2015 have been derived from NNN REIT’s audited consolidated financial statements as of and for the years during the four-year period ended December 31, 2018, including those contained in Appendix I to this Joint Proxy Statement and Prospectus. The selected historical financial information as of June 30, 2019 and for the six months ended June 30, 2019 and June 30, 2018 has been derived from NNN REIT’s unaudited condensed consolidated financial statements contained in Appendix I to this Joint Proxy Statement and Prospectus. Interim results for the six months ended and as of June 30, 2019 are not necessarily indicative of, and are not projections for, the results to be expected for the fiscal year ending December 31, 2019.

You should read this selected historical financial information together with the financial statements that are included in Appendix I to this Joint Proxy Statement and Prospectus and their accompanying notes and management’s discussion and analysis of operations and financial condition of NNN REIT contained in the section entitled “The Companies – RW Holdings NNN REIT, Inc. – Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 
June 30,
2019
December 31,
Balance sheet data
2018
2017
2016
2015
Total real estate investment, net
$
233,852,427
 
$
238,924,160
 
$
149,759,638
 
$
36,275,665
 
$
 
Total assets
 
250,107,646
 
 
252,425,902
 
 
157,073,447
 
 
41,302,560
 
 
200,815
 
Mortgage notes payable, net
 
115,032,981
 
 
122,709,308
 
 
60,487,303
 
 
7,113,701
 
 
 
Unsecured credit facility, net
 
 
 
8,998,000
 
 
12,000,000
 
 
10,156,685
 
 
 
Total liabilities
 
123,532,240
 
 
143,332,182
 
 
77,777,232
 
 
18,874,794
 
 
7,000
 
Redeemable common stock(1)
 
5,762,798
 
 
6,000,951
 
 
46,349
 
 
196,660
 
 
 
Total stockholders’ equity
 
120,812,608
 
 
103,092,769
 
 
79,249,866
 
 
22,231,106
 
 
193,815
 
(1)Redeemable common stock as of June 30, 2019 and December 31, 2018 is a contingent obligation which reflects the maximum amount of common stock that could be repurchased during the third and first quarter of 2019, respectively.   
 
Six Months Ended June 30,
Years Ended December 31,
Operating Data
2019
2018
2018
2017
2016
2015
Total revenues
$
11,781,711
 
$
7,841,944
 
$
17,984,625
 
$
7,390,206
 
$
861,744
 
$
 
Net loss
 
(2,053,174
)
 
(246,454
)
 
(1,801,724
)
 
(868,484
)
 
(1,237,441
)
 
(6,185
)
Other data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows provided by (used in) operations
 
2,886,131
 
 
1,318,015
 
 
5,881,889
 
 
3,790,837
 
 
(672,132
)
 
815
 
Cash flows used in investing activities
 
(3,487,699
)
 
(33,032,691
)
 
(92,019,684
)
 
(115,593,935
)
 
(37,155,065
)
 
 
Cash flows provided by financing activities
 
2,636,940
 
 
31,813,510
 
 
90,710,968
 
 
112,308,480
 
 
41,303,755
 
 
200,000
 
Per share data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributions declared per common share per the period:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class C
 
0.352
 
 
0.410
 
 
0.7035
 
 
0.700
 
 
0.320
 
 
 
Class S
 
0.352
 
 
0.410
 
 
0.7035
(1) 
 
0.175
(1) 
 
 
 
 
Net loss per common share- basic and diluted
 
(0.14
)
 
(0.02
)
 
(0.16
)
 
(0.15
)
 
(2.89
)
 
(4.95
)
Weighted-average number of common shares outstanding, basic and diluted
 
14,218,770
 
 
10,054,089
 
 
11,069,864
 
 
5,982,930
 
 
428,255
 
 
1,250
 
(1)The distribution paid per share of Class S common stock is net of deferred selling commissions.

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Selected Historical Financial Information of REIT I

The following selected historical financial information for each of the years during the five-year period ended December 31, 2018 and the selected balance sheet data as of December 31, 2018, 2017, 2016, 2015 and 2014 have been derived from REIT I’s audited consolidated financial statements as of and for the years during the five-year period ended December 31, 2018, including those contained in Appendix II to this Joint Proxy Statement and Prospectus. The selected historical financial information as of June 30, 2019 and for the six months ended June 30, 2019 and June 30, 2018 has been derived from REIT I’s unaudited condensed consolidated financial statements contained in Appendix II to this Joint Proxy Statement and Prospectus. Interim results for the six months ended and as of June 30, 2019 are not necessarily indicative of, and are not projections for, the results to be expected for the fiscal year ending December 31, 2019.

You should read this selected historical financial information together with the financial statements that are included in Appendix II to this Joint Proxy Statement and Prospectus and their accompanying notes and management’s discussion and analysis of operations and financial condition of REIT I contained in the section entitled “The Companies – Rich Uncles Real Estate Investment Trust I – Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 
June 30,
2019
December 31,
Balance sheet data
2018
2017
2016
2015
2014
Total real estate investment, net
$
120,644,631
 
$
125,075,537
 
$
131,166,670
 
$
105,462,499
 
$
40,633,288
 
$
3,769,401
 
Total assets
 
126,551,282
 
 
131,522,157
 
 
139,853,254
 
 
121,407,570
 
 
48,919,355
 
 
4,845,513
 
Mortgage notes payable, net
 
62,033,836
 
 
61,446,068
 
 
62,277,387
 
 
38,705,103
 
 
6,197,946
 
 
1,991,881
 
Unsecured credit facility, net
 
 
 
 
 
 
 
 
 
8,032,181
 
 
 
Total liabilities
 
66,245,461
 
 
67,911,529
 
 
69,180,642
 
 
46,813,735
 
 
16,038,616
 
 
2,409,158
 
Redeemable common stock(1)
 
 
 
163,572
 
 
586,242
 
 
1,229,644
 
 
 
 
 
Total shareholders’ equity
 
60,305,821
 
 
63,447,056
 
 
70,086,370
 
 
73,364,189
 
 
32,880,739
 
 
2,436,355
 
 
Six Months Ended June 30,
Years Ended December 31,
Operating Data
2019
2018
2018
2017
2016
2015
2014
Total revenues
$
6,566,354
 
$
6,596,381
 
$
13,166,631
 
$
12,837,754
 
$
6,414,592
 
$
978,187
 
$
113,171
 
Net loss
 
(455,575
)
 
(626,777
)
 
(896,595
)
 
1,395,046
 
 
(1,8891,388
)
 
(842,181
)
 
(275,293
)
Other data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows provided by operating activities
 
2,731,685
 
 
2,473,841
 
 
5,293,591
 
 
5,161,616
 
 
3,328,927
 
 
600,734
 
 
125,464
 
Cash flows used in investing activities
 
(1,297,293
)
 
(423,631
)
 
(554,770
)
 
(30,126,826
)
 
(64,031,855
)
 
(37,295,999
)
 
(3,868,618
)
Cash flows (used in) provided by financing activities
 
(1,551,603
)
 
(3,471,735
)
 
(7,390,553
)
 
17,527,865
 
 
72,065,212
 
 
38,597,730
 
 
3,943,457
 
Per share data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributions declared per common share per the period
 
0.375
 
 
0.375
 
 
0.75
 
 
0.75
 
 
0.75
 
 
0.75
 
 
0.57
 
Net loss (income) per common share - basic and diluted
 
(0.05
)
 
(0.07
)
 
(0.11
)
 
0.17
 
 
(0.28
)
 
(0.59
)
 
(2.95
)
Weighted-average number of common shares outstanding, basic and diluted
 
8,383,124
 
 
8,410,840
 
 
8,404,346
 
 
8,359,108
 
 
6,692,800
 
 
1,435,926
 
 
93,411
 
(1) Represents the maximum amount of common shares redeemable based on the 5% quarterly limitation in REIT I’s share repurchase program.

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Selected Unaudited Pro Forma Consolidated Financial Information

The following table shows summary unaudited pro forma condensed consolidated financial information about the combined financial condition and operating results of REIT I and NNN REIT after giving effect to the transactions contemplated by the Merger Agreement and the Self-Management Transaction. The Merger with NNN REIT and the transactions contemplated by the Self-Management Transaction are expected to be accounted for as an asset acquisition and a business combination, respectively, in accordance with FASB ASC 805 with NNN REIT treated as the accounting acquirer.

The unaudited pro forma condensed consolidated balance sheet data gives effect to the Merger, and the Self-Management Transaction as if they each occurred on June 30, 2019. The unaudited pro forma consolidated statements of operations give effect to the Merger and the Self-Management Transaction during the period from January 1, 2018 to December 31, 2018 as if they each had occurred on January 1, 2018, in each case based on the most recent data available. The summary unaudited pro forma condensed consolidated financial information below has been derived from and should be read in conjunction with (1) the more detailed unaudited pro forma condensed consolidated financial information, including the notes thereto, included in Annex I to this Joint Proxy Statement and Prospectus, and (2) the historical consolidated financial statements and related notes of both NNN REIT and REIT I included in the Appendices to this Joint Proxy Statement and Prospectus.

PRO FORMA CONSOLIDATED BALANCE SHEET
June 30, 2019
(Unaudited)

 
Historical
Historical
Merger
Pro Forma
Historical
Self -
Management
Pro Forma
 
NNN REIT
REIT I
Merged
BrixInvest
Combined
Company
Real estate investments, net
$
233,852,427
 
$
120,644,631
 
$
28,100,337
 
$
382,597,395
 
$
112,400
 
$
(107,400
)
$
382,602,395
 
Cash and cash equivalents
 
10,635,254
 
 
3,081,847
 
 
(2,030,000
)
 
11,687,101
 
 
259,910
 
 
(5,602,691
)
 
6,344,320
 
Tenant receivables
 
4,146,339
 
 
1,711,239
 
 
(1,471,395
)
 
4,386,183
 
 
 
 
 
 
4,386,183
 
Above-market lease intangibles, net
 
535,725
 
 
764,202
 
 
180,949
 
 
1,480,876
 
 
 
 
 
 
1,480,876
 
Other assets
 
937,901
 
 
349,363
 
 
 
 
1,287,264
 
 
1,455,930
 
 
(84,518
)
 
2,658,676
 
Intangible assets, net
 
 
 
 
 
 
 
 
 
1,188,702
 
 
5,511,298
 
 
6,700,000
 
Goodwill
 
 
 
 
 
 
 
 
 
 
 
37,664,846
 
 
37,664,846
 
Total assets
$
250,107,646
 
$
126,551,282
 
$
24,779,891
 
$
401,438,819
 
$
3,016,942
 
$
37,381,535
 
$
441,837,296
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage notes payable, net
$
115,032,981
 
$
62,033,836
 
$
1,407,507
 
$
178,474,324
 
$
 
$
 
$
178,474,324
 
Unsecured credit facility
 
 
 
 
 
 
 
 
 
584,604
 
 
 
 
584,604
 
Secured notes payable
 
 
 
 
 
 
 
 
 
948,686
 
 
 
 
948,686
 
Other liabilities
 
8,499,259
 
 
4,211,625
 
 
3,077,089
 
 
15,787,970
 
 
6,660,074
 
 
(5,094,887
)
 
17,353,157
 
Total liabilities
 
123,532,240
 
 
66,245,461
 
 
4,484,593
 
 
194,262,294
 
 
8,193,364
 
 
(5,094,887
)
 
197,360,771
 
Total stockholders’ equity
 
120,812,608
 
 
60,305,821
 
 
20,295,298
 
 
201,413,727
 
 
(5,176,422
)
 
42,476,422
 
 
238,713,727
 
Total liabilities and equity
$
250,107,646
 
$
126,551,282
 
$
24,779,891
 
$
401,438,819
 
$
3,016,942
 
$
37,381,535
 
$
441,837,296
 
Book value per common share
$
7.80
 
$
7.23
 
 
 
 
$
8.60
 
$
(7.56
)
 
 
 
$
8.90
 

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PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2018
(Unaudited)

 
Historical
Historical
Merger
Pro Forma
Historical
Self-
Management
Transaction
Pro Forma
 
NNN REIT
REIT I
Merger
BrixInvest
Combined
Company
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental income
$
17,984,625
 
$
13,166,631
 
$
1,582,211
 
$
32,733,467
 
$
9,682,501
 
$
(9,287,720
)
$
33,128,248
 
Net (loss) income
$
(1,801,724
)
$
(896,595
)
$
1,519,703
 
$
(1,178,616
)
$
110,010
 
$
(6,945,355
)
$
(8,013,961
)
Net (loss) income per common share, basic
$
(0.16
)
$
(0.11
)
 
 
 
$
(0.06
)
$
0.16
 
 
 
 
$
(0.36
)
Dividends declared per common share
$
.70
 
$
.75
 
 
 
 
$
.70
 
$
 
 
 
 
$
.70
 

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Six Months Ended June 30, 2019
(Unaudited)

 
Historical
Historical
Merger
Pro Forma
Historical
Self-
Management
Transaction
Pro Forma
 
NNN REIT
REIT I
Merger
BrixInvest
Combined
Company
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental income
$
11,781,711
 
$
6,566,354
 
$
794,076
 
$
19,142,141
 
$
4,100,217
 
$
(3,792,467
)
$
19,449,891
 
Net loss
$
(2,053,174
)
$
(455,575
)
$
811,962
 
$
(1,696,787
)
$
(1,391,093
)
$
(1,890,041
)
$
(4,977,921
)
Net loss per common share, basic
$
(0.14
)
$
(0.05
)
 
 
 
$
(0.08
)
$
(2.03
)
 
 
 
$
(0.19
)
Dividends declared per common share
$
.35
 
$
.38
 
 
 
 
$
.35
 
$
 
 
 
 
$
.35
 

The pro forma consolidated NNN REIT equivalent information shows the effect of the Merger from the perspective of an owner of NNN REIT common stock. You should not rely on the pro forma per share amounts above as being indicative of the financial position or results of operations of the Combined Company that actually would have occurred had the Merger or the Self-Management Transaction been completed as of the dates indicated above, nor is it necessarily indicative of the financial position or future operating results of the Combined Company.

The pro forma income from continuing operations per share includes the combined income (loss) from continuing operations of NNN REIT and REIT I on a pro forma basis as if the transactions were consummated on January 1, 2018. Refer to “Pro Forma Financial Information” included in Annex I to this Joint Proxy Statement and Prospectus for further information.

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Comparative Market Price Data and Dividend Data

NNN REIT’s Market Price Data and Dividend Data

NNN REIT’s common stock is not listed on an exchange and there is no established public trading market for shares of NNN REIT common stock.

The following table shows the distributions NNN REIT has declared and paid in the last two fiscal years through December 31, 2018 and the first two quarters of 2019:

Quarter
Total
Distributions
Declared and
Paid to
Stockholders(1)
Distributions
Declared per
Share of
Common
Stock
1st Quarter 2017
$
486,862
 
$
0.175
 
2nd Quarter 2017
$
824,641