10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2012

OR

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from                      to                     

Commission file number 001-11290

NATIONAL RETAIL PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland (State or other jurisdiction of incorporation or organization) 56-1431377 (I.R.S. Employer Identification No.)

450 South Orange Avenue, Suite 900

Orlando, Florida 32801

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (407) 265-7348

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x     No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x Accelerated filer  ¨ Non-accelerated filer  ¨ Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.

108,190,322 shares of common stock, $0.01 par value, outstanding as of July 27, 2012.

TABLE OF CONTENTS

		PAGE       REFERENCE
Part I - Financial Information
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31
Part II - Other Information
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	32
Signatures		36
Exhibit Index		37

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

NATIONAL RETAIL PROPERTIES, INC. and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data)
	June 30, 2012			December 31, 2011
ASSETS	(unaudited)
Real estate portfolio:
Accounted for using the operating method, net of accumulated depreciation and amortization	$	3,485,819		$	3,225,119
Accounted for using the direct financing method	24,954			26,518
Real estate held for sale	40,351			36,105
Investment in unconsolidated affiliate	4,283			4,358
Mortgages, notes and accrued interest receivable, net of allowance	36,740			33,428
Commercial mortgage residual interests	12,395			15,299
Cash and cash equivalents	2,907			2,082
Receivables, net of allowance of $1,113 and $1,403, respectively	1,456			2,149
Accrued rental income, net of allowance of $3,086 and $4,870, respectively	25,330			25,187
Debt costs, net of accumulated amortization of $16,986 and $15,332, respectively	9,148			10,802
Other assets	60,607			53,382
Total assets	$	3,703,990		$	3,434,429
LIABILITIES AND EQUITY
Liabilities:
Line of credit payable	$	142,600		$	65,600
Mortgages payable, including unamortized premium of $216 and $0, respectively	29,341			23,171
Notes payable – convertible, net of unamortized discount of $4,256 and $6,363, respectively	357,479			355,371
Notes payable, net of unamortized discount of $4,763 and $5,033, respectively	845,237			894,967
Accrued interest payable	14,440			15,108
Other liabilities	87,483			76,336
Total liabilities	1,476,580			1,430,553
Equity:
Stockholders’ equity:
Preferred stock, $0.01 par value. Authorized 15,000,000 shares
Series D, 11,500,000 depositary shares issued and outstanding, at stated liquidation value   of $25 per share	287,500			—
Series C, 3,680,000 depositary shares issued and outstanding, at stated liquidation value   of $25 per share	—			92,000
Common stock, $0.01 par value. Authorized 190,000,000 shares; 107,449,071 and   104,754,859 shares issued and outstanding, respectively	1,076			1,049
Excess stock, $0.01 par value. Authorized 205,000,000 shares; none issued or outstanding	—			—
Capital in excess of par value	2,015,121			1,958,225
Retained earnings (loss)	(74,123		)	(44,946		)
Accumulated other comprehensive income (loss)	(3,504		)	(3,830		)
Total stockholders’ equity of NNN	2,226,070			2,002,498
Noncontrolling interests	1,340			1,378
Total equity	2,227,410			2,003,876
Total liabilities and equity	$	3,703,990		$	3,434,429

See accompanying notes to consolidated financial statements.

3

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenues:
Rental income from operating leases	$	77,927		$	57,578		$	151,494		$	114,526
Earned income from direct financing leases	618			693			1,246			1,433
Percentage rent	221			132			332			247
Real estate expense reimbursement from tenants	2,505			2,142			5,337			4,422
Interest and other income from real estate transactions	764			543			1,470			1,164
Interest income on commercial mortgage residual interests	716			777			1,471			1,544
	82,751			61,865			161,350			123,336
Retail operations:
Revenues	7,784			12,450			19,008			21,300
Operating expenses	(7,481		)	(11,760		)	(18,543		)	(20,612		)
Net	303			690			465			688
Operating expenses:
General and administrative	7,024			6,568			14,627			13,226
Real estate	4,025			3,919			8,597			7,573
Depreciation and amortization	19,032			13,765			37,140			27,184
Impairment – commercial mortgage residual interests valuation	2,718			267			2,718			396
	32,799			24,519			63,082			48,379
Earnings from operations	50,255			38,036			98,733			75,645
Other expenses (revenues):
Interest and other income	(361		)	(283		)	(719		)	(625		)
Interest expense	19,394			17,512			39,039			35,174
	19,033			17,229			38,320			34,549
Earnings from continuing operations before income tax expense and equity in earnings of unconsolidated affiliate	31,222			20,807			60,413			41,096
Income tax expense	(140		)	(210		)	(236		)	(191		)
Equity in earnings of unconsolidated affiliate	155			104			305			213
Earnings from continuing operations	31,237			20,701			60,482			41,118
Earnings from discontinued operations, net of income tax expense (Note 7)	2,239			568			2,817			1,005
Earnings including noncontrolling interests	33,476			21,269			63,299			42,123
Loss (earnings) attributable to noncontrolling interests:
Continuing operations	34			67			55			93
Discontinued operations	(5		)	(33		)	(17		)	(93		)
	29			34			38			—
Net earnings attributable to NNN	$	33,505		$	21,303		$	63,337		$	42,123

See accompanying notes to consolidated financial statements.

4

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net earnings attributable to NNN	$	33,505		$	21,303		$	63,337		$	42,123
Series C preferred stock dividends	—			(1,696		)	(1,979		)	(3,392		)
Series D preferred stock dividends	(5,926		)	—			(5,926		)	—
Excess of redemption value over carrying value of preferred shares    redeemed	—			—			(3,098		)	—
Net earnings attributable to common stockholders	$	27,579		$	19,607		$	52,334		$	38,731
Net earnings per share of common stock:
Basic:
Continuing operations	$	0.24		$	0.23		$	0.47		$	0.46
Discontinued operations	0.02			—			0.02			—
Net earnings	$	0.26		$	0.23		$	0.49		$	0.46
Diluted:
Continuing operations	$	0.24		$	0.23		$	0.46		$	0.46
Discontinued operations	0.02			—			0.03			—
Net earnings	$	0.26		$	0.23		$	0.49		$	0.46
Weighted average number of common shares outstanding:
Basic	105,992,014			84,409,788			105,417,595			83,771,728
Diluted	107,458,993			84,725,968			106,844,080			84,271,352
Other comprehensive income:
Net earnings attributable to NNN	$	33,505		$	21,303		$	63,337		$	42,123
Amortization of interest rate hedges	58			(42		)	114			(85		)
Fair value treasury locks	—			(6,881		)	—			(5,218		)
Unrealized gain - commercial mortgage residual interests	213			539			213			599
Stock value adjustments	—			(7		)	(1		)	(26		)
Comprehensive income attributable to NNN	$	33,776		$	14,912		$	63,663		$	37,393

See accompanying notes to consolidated financial statements.

5

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

	Six Months Ended June 30,
	2012			2011
Cash flows from operating activities:
Earnings including noncontrolling interests	$	63,299		$	42,123
Adjustments to reconcile net earnings to net cash provided by operating activities:
Performance incentive plan expense	3,889			3,297
Depreciation and amortization	37,383			27,678
Impairment losses and other charges	380			—
Impairment – commercial mortgage residual interests valuation	2,718			396
Amortization of notes payable discount	2,378			3,335
Amortization of deferred interest rate hedges	114			(85		)
Equity in earnings of unconsolidated affiliate	(305		)	(213		)
Distributions received from unconsolidated affiliate	362			286
Gain on disposition of real estate portfolio	(2,752		)	(132		)
Gain on note receivable and property foreclosure	(198		)	—
Other	—			82
Change in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Additions to held for sale real estate	(4,472		)	(212		)
Proceeds from disposition of held for sale real estate	—			1,058
Decrease in real estate leased to others using the direct financing method	807			802
Increase in work in process	(889		)	(575		)
Increase in mortgages, notes and accrued interest receivable	(345		)	(88		)
Decrease in receivables	633			998
Decrease (increase) in commercial mortgage residual interests	399			(127		)
Decrease (increase) in accrued rental income	(218		)	149
Decrease (increase) in other assets	487			(19		)
Decrease in accrued interest payable	(668		)	(57		)
Decrease in other liabilities	(3,490		)	(1,631		)
Increase in current tax liability	255			794
Net cash provided by operating activities	99,767			77,859
Cash flows from investing activities:
Proceeds from the disposition of real estate, Investment Portfolio	12,024			807
Additions to real estate:
Accounted for using the operating method	(287,923		)	(111,673		)
Accounted for using the direct financing method	—			(1,747		)
Increase in mortgages and notes receivable	(7,861		)	(4,090		)
Principal payments on mortgages and notes receivable	3,085			2,107
Payment of lease costs	(1,154		)	(672		)
Other	557			402
Net cash used in investing activities	(281,272		)	(114,866		)

See accompanying notes to consolidated financial statements.

6

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

	Six Months Ended June 30,
	2012			2011
Cash flows from financing activities:
Proceeds from line of credit payable	$	614,400		$	328,800
Repayment of line of credit payable	(537,400		)	(270,600		)
Payment of interest rate hedge	—			(5,300		)
Repayment of notes payable	(50,000		)	—
Payment of debt costs	—			(2,920		)
Repayment of mortgages payable	(680		)	(541		)
Proceeds from issuance of common stock	60,319			56,391
Proceeds from issuance of preferred stock	287,500			—
Redemption of preferred stock	(92,000		)	—
Payment of Series C preferred stock dividends	(1,979		)	(3,392		)
Payment of Series D preferred stock dividends	(5,926		)	—
Payment of common stock dividends	(81,511		)	(63,887		)
Noncontrolling interest distributions	—			(45		)
Noncontrolling interest contributions	—			41
Stock issuance costs	(10,393		)	—
Net cash provided by financing activities	182,330			38,547
Net increase in cash and cash equivalents	825			1,540
Cash and cash equivalents at beginning of year	2,082			2,048
Cash and cash equivalents at end of year	$	2,907		$	3,588
Supplemental disclosure of cash flow information:
Interest paid, net of amount capitalized	$	38,800		$	33,230
Taxes paid (received)	$	78		$	(487	)
Supplemental disclosure of noncash investing and financing activities:
Issued 396,577 and 139,351 shares of restricted and unrestricted     common stock in 2012 and 2011, respectively, pursuant to NNN’s     performance incentive plan	$	8,576		$	3,407
Issued 8,389 and 4,623 shares of common stock in 2012 and 2011,     respectively, to directors pursuant to NNN’s performance incentive plan	$	229		$	118
Issued 10,247 and 13,879 shares of common stock in 2012 and     2011, respectively, pursuant to NNN’s Deferred Director Fee Plan	$	149		$	245
Surrender of 4,178 and of 4,494 shares of restricted common stock in 2012 and     2011, respectively	$	98		$	94
Change in other comprehensive income	$	(326	)	$	(4,730	)
Change in lease classification (direct financing lease to operating lease)	$	757		$	2,243
Mortgage payable assumed in connection with real estate transaction	$	6,634		$	—
Real estate acquired in connection with mortgage receivable foreclosure	$	490		$	—
Real estate received in note receivable foreclosure	$	1,595		$	—

See accompanying notes to consolidated financial statements.

7

NATIONAL RETAIL PROPERTIES, INC.

and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2012

(unaudited)

Note 1 – Organization and Summary of Significant Accounting Policies:

Organization and Nature of Business – National Retail Properties, Inc., a Maryland corporation, is a fully integrated real estate investment trust (“REIT”) formed in 1984. The term “NNN” or the “Company” refers to National Retail Properties, Inc. and all of its consolidated subsidiaries. NNN has elected to treat certain subsidiaries as taxable REIT subsidiaries. These taxable subsidiaries and their majority owned and controlled subsidiaries are collectively referred to as the “TRS.”

NNN's assets include: real estate assets, mortgages and notes receivable, and commercial mortgage residual interests. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and primarily held for investment (“Properties” or “Property Portfolio”).

	June 30, 2012
Property Portfolio:
Total properties	1,506
Gross leasable area (square feet)	17,798,000
States	47

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. The unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. Operating results for the quarter and six months ended June 30, 2012, may not be indicative of the results that may be expected for the year ending December 31, 2012. Amounts as of December 31, 2011, included in the condensed consolidated financial statements have been derived from the audited consolidated financial statements as of that date. The unaudited condensed consolidated financial statements, included herein, should be read in conjunction with the consolidated financial statements and notes thereto as well as Management's Discussion and Analysis of Financial Condition and Results of Operations in NNN's Form 10-K for the year ended December 31, 2011.

Principles of Consolidation – NNN’s condensed consolidated financial statements include the accounts of each of the respective majority owned and controlled affiliates, including transactions whereby NNN has been determined to be the primary beneficiary in accordance with the Financial Accounting Standards Board (“FASB”) guidance included in Consolidation. All significant intercompany account balances and transactions have been eliminated. NNN applies the equity method of accounting to investments in partnerships and joint ventures that are not subject to control by NNN due to the significance of rights held by other parties.

Real Estate Portfolio – NNN records the acquisition of real estate which is not subject to a lease at cost, including acquisition and closing costs. The cost of properties developed by NNN includes direct and indirect costs of construction, property taxes, interest and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. During the quarter and six months ended June 30, 2012, NNN recorded $436,000 and $868,000, respectively, in capitalized interest and recorded $247,000 and $569,000 in capitalized interest during the same periods in 2011, respectively.

Purchase Accounting for Acquisition of Real Estate Subject to a Lease – In accordance with the FASB guidance on business combinations, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases and value of tenant relationships, based in each case on their relative fair values. Acquisition costs incurred in connection with a business combination are expensed when incurred.

The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and tenant improvements based on the determination of the fair values of these assets. The as-if-vacant fair value of a property is provided to management by a qualified appraiser.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which

8

reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease, including the probability of renewal periods. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant would renew the option whereby the Company would amortize the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the property as-if-vacant, determined as set forth above. The value of in-place leases exclusive of the value of above-market and below-market in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

Intangible assets and liabilities consisted of the following as of (in thousands):

	June 30, 2012		December 31, 2011
Intangible lease assets (included in Other assets):
Value of above market in-place leases, net	$	6,999	$	5,907
Value of in-place leases, net	38,342		31,970
Intangible lease liabilities (included in Other liabilities):
Value of below market in-place leases, net	25,377		23,367

Investment in an Unconsolidated Affiliate – NNN accounts for its investment in an unconsolidated affiliate under the equity method of accounting. In September 2007, NNN entered into a joint venture, NNN Retail Properties Fund I LLC (the “NNN Crow JV”) with an affiliate of Crow Holdings Realty Partners IV, L.P., which is accounted for under the equity method of accounting.

Cash and Cash Equivalents - NNN considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash and money market accounts. Cash equivalents are stated at cost plus accrued interest, which approximates fair value.

Cash accounts maintained on behalf of NNN in demand deposits at commercial banks and money market funds may exceed federally insured levels; however, NNN has not experienced any losses in such accounts.

Valuation of Receivables – NNN estimates the collectibility of its accounts receivable related to rents, expense reimbursements and other revenues. NNN analyzes accounts receivable and historical bad debt levels, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims.

Earnings Per Share – Earnings per share have been computed pursuant to the FASB guidance included in Earnings Per Share. Effective January 1, 2009, the guidance requires classification of the Company’s unvested restricted share units which contain rights to receive nonforfeitable dividends, as participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period.

9

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per common share using the two-class method (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Basic and Diluted Earnings:
Net earnings attributable to NNN	$	33,505		$	21,303		$	63,337		$	42,123
Less: Series C preferred stock dividends	—			(1,696		)	(1,979		)	(3,392		)
Less: Series D preferred stock dividends	(5,926		)	—			(5,926		)	—
Less: Excess of redemption value over carrying value of preferred shares redeemed	—			—			(3,098		)	—
Net earnings available to NNN’s common stockholders	27,579			19,607			52,334			38,731
Less: Earnings attributable to unvested restricted shares	(180		)	(152		)	(312		)	(286		)
Net earnings used in basic earnings per share	27,399			19,455			52,022			38,445
Reallocated undistributed income (loss)	—			—			—			—
Net earnings used in diluted earnings per share	$	27,399		$	19,455		$	52,022		$	38,445
Basic and Diluted Weighted Average Shares Outstanding:
Weighted average number of shares outstanding	107,006,399			85,309,082			106,321,014			84,635,929
Less: Unvested restricted stock	(696,804		)	(647,468		)	(631,329		)	(612,375		)
Less: Contingent shares	(317,581		)	(251,826		)	(272,090		)	(251,826		)
Weighted average number of shares outstanding used in basic earnings    per share	105,992,014			84,409,788			105,417,595			83,771,728
Effects of dilutive securities:
Contingent shares	—			—			12,735			—
Convertible debt	1,310,445			160,006			1,259,319			346,699
Common stock options	1,419			3,162			1,855			3,305
Directors’ deferred fee plan	155,115			153,012			152,576			149,620
Weighted average number of shares outstanding used in diluted earnings    per share	107,458,993			84,725,968			106,844,080			84,271,352

For the quarter and six months ended June 30, 2011, the potential dilutive shares related to certain convertible notes payable were not included in computing earnings per common share because their effects would be antidilutive.

Fair Value Measurement – NNN’s estimates of fair value of financial and non-financial assets and liabilities are based on the framework established in the fair value accounting guidance. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The guidance describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

• Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.

• Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

New Accounting Pronouncements – In December 2011, the FASB issued Accounting Standards Update ("ASU") 2011-10 entitled Derecognition of in Substance Real Estate - a Scope Clarification. The amendments in this update clarify the scope of current U.S. generally accepted accounting principals ("GAAP"). The amendments will resolve the diversity in practice about

10

whether the guidance in subtopic 360-20 applies to the derecognition of in substance real estate when the parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate because of a default by the subsidiary on its nonrecourse debt. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. The adoption of the standard did not have a significant impact on NNN's financial position or results of operations.

In December 2011, the FASB issued ASU 2011-11 amending its guidance on offsetting assets and liabilities in financial statements. The objective of this update will require disclosure to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amendments in this update are effective for annual reporting periods beginning on or after January 1, 2013. NNN is currently evaluating the provisions to determine the potential impact, if any, the adoption will have on its financial position and results of operations.

In June 2011, the FASB issued ASU 2011-05 which amended its guidance on the presentation of comprehensive income in financial statements. The new guidance requires that all nonowner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The provisions of this new guidance were effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this guidance changed the presentation of NNN's condensed consolidated financial statements but did not have an effect on NNN's results of operations.

In December 2011, the FASB issued ASU 2011-12, which indefinitely defers certain provisions of ASU 2011-05, including a requirement for entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net earnings is presented and the statement in which other comprehensive income is presented. The effective dates and expected changes to our presentation are the same as noted in ASU 2011-05 above.

Use of Estimates – Management of NNN has made a number of estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with U.S. GAAP. Significant estimates include provision for impairment and allowances for certain assets, accruals, useful lives of assets and purchase price allocation. Actual results could differ from those estimates.

Reclassification – Certain items in the prior year’s consolidated financial statements and notes to consolidated financial statements have been reclassified to conform to the 2012 presentation.

Note 2 – Real Estate – Portfolio:

Leases – The following outlines key information for NNN’s leases:

	June 30, 2012
Lease classification:
Operating	1,493
Direct financing	14
Building portion – direct financing / land portion – operating	5
Weighted average remaining lease term	12 Years

The leases generally provide for limited increases in rent as a result of fixed increases, increases in the consumer price index, and/or increases in the tenant’s sales volume. Generally, the tenant is also required to pay all property taxes and assessments, substantially maintain the interior and exterior of the property and carry property and liability insurance coverage. Certain of NNN’s Properties are subject to leases under which NNN retains responsibility for specific costs and expenses of the property. Generally, the leases of the Properties provide the tenant with one or more multi-year renewal options subject to generally the same terms and conditions, including rent increases, consistent with the initial lease term.

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Real Estate Portfolio – Accounted for Using the Operating Method – Real estate subject to operating leases consisted of the following as of (dollars in thousands):

	June 30, 2012			December 31, 2011
Land and improvements	$	1,390,175		$	1,315,339
Buildings and improvements	2,309,079			2,118,303
Leasehold interests	1,290			1,290
	3,700,544			3,434,932
Less accumulated depreciation and amortization	(302,435		)	(270,023		)
	3,398,109			3,164,909
Work in progress	87,710			60,210
	$	3,485,819		$	3,225,119

In connection with the improvements of leased Properties, NNN has the following funding commitments (dollars in thousands):

	June 30, 2012
	# of Properties	Total Commitment(1)		Amount Funded		Remaining Commitment
Real Estate Portfolio	54	$	167,243	$	127,693	$	39,550

⁽¹⁾ Includes land and construction costs.

Note 3 – Commercial Mortgage Residual Interests:

In 2010, NNN acquired the 21.1% non-controlling interest in its majority owned and controlled subsidiary, Orange Avenue Mortgage Investments, Inc. (“OAMI”), for $1,603,000, and OAMI became a wholly owned subsidiary of NNN. NNN accounted for the transaction as an equity transaction in accordance with the FASB guidance on consolidation. OAMI holds the residual interests (“Residuals”) from seven commercial mortgage securitizations. Each of the Residuals is recorded at fair value based upon an independent valuation. Unrealized gains and losses are reported as other comprehensive income in stockholders' equity and other than temporary losses as a result of a change in the timing, or amount of estimated cash flows are recorded as an other than temporary valuation impairment.

Due to the expected timing of future cash flows relating to the Residuals, the independent valuation adjusted certain of the valuation assumptions. The following table summarizes the key assumptions used in determining the value of the Residuals as of:

	June 30, 2012		December 31, 2011
Discount rate	25	%	25	%
Average life equivalent CPR (1) speeds range	0.80% to 20.42% CPR		2.18% to 18.57% CPR
Foreclosures:
Frequency curve default model	0.1% - 3.9% range		0.2% - 4.7% range
Loss severity of loans in foreclosure	20	%	20	%
Yield:
LIBOR	Forward 3-month curve		Forward 3-month curve
Prime	Forward curve		Forward curve

⁽¹⁾ Conditional prepayment rate.

The following table summarizes the recognition of unrealized gains and/or losses recorded as other comprehensive income as well as other than temporary valuation impairments recorded in condensed consolidated statements of earnings (dollars in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Unrealized gains	$	213	$	539	$	213	$	599
Other than temporary valuation impairment	2,718		267		2,718		396

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Note 4 – Line of Credit Payable:

In May 2011, NNN amended and restated its credit agreement increasing the borrowing capacity under its unsecured revolving credit facility from $400,000,000 to $450,000,000 and amending certain other terms under the former revolving credit facility (as the context requires, the previous and new revolving credit facility, the “Credit Facility”). The Credit Facility had a weighted average outstanding balance of $52,946,000 and a weighted average interest rate of 1.8 percent during the six months ended June 30, 2012. The Credit Facility matures May 2015, with an option to extend maturity to May 2016. The Credit Facility bears interest at LIBOR plus 150 basis points; however, such interest rate may change pursuant to a tiered interest rate structure based on NNN's debt rating. The Credit Facility also includes an accordion feature to increase the facility size up to $650,000,000, subject to lender approval. As of June 30, 2012, $142,600,000 was outstanding and $307,400,000 was available for future borrowings under the Credit Facility, excluding undrawn letters of credit totaling $3,800,000.

Note 5 – Stockholders' Equity:

The following table outlines the dividends declared and paid for each issuance of NNN's stock (in thousands, except per share data):

		Six Months Ended June 30,
		2012		2011
Series C preferred stock (1):
	Dividends	$	1,979	$	3,392
	Per share	0.5378		0.9218
Series D preferred stock (2):
	Dividends	5,926		—
	Per share	0.5153		—
Common stock:
	Dividends	81,511		63,887
	Per share	0.770		0.760

¹⁾ The Series C preferred stock was redeemed in March 2012. The dividends paid during the quarter ended March 31, 2012 include accumulated and unpaid dividends through the redemption date.

²⁾ The Series D preferred stock dividends paid during the quarter ended June 30, 2012 include accumulated and unpaid dividends from the issuance date through the declaration date. The Series D preferred stock has no maturity date and will remain outstanding unless redeemed.

In February 2012, NNN filed a shelf registration statement with the Securities and Exchange Commission (the "Commission") which permits the issuance by NNN of an indeterminate amount of debt and equity securities.

In February 2012, NNN issued 11,500,000 depositary shares representing interests in our 6.625% Series D Cumulative Redeemable Preferred Stock ("Series D Preferred Stock") at a price of $25.00 per depositary share generating net proceeds of $277,645,000. In connection with this offering, NNN incurred stock issuance costs totaling approximately $9,855,000, consisting primarily of underwriters' fees and commissions, legal and accounting fees and printing expenses.

In March 2012, NNN redeemed all outstanding depositary shares (3,680,000) representing interests in its 7.375% Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”). The Series C Preferred Stock was redeemed at $25.00 per depositary share, plus accumulated and unpaid distributions through the redemption date, for an aggregate redemption price of $25.0768229 per depositary share. The excess carrying amount of preferred stock redeemed over the cash paid to redeem the preferred stock was $3,098,000 representing Series C Preferred Stock issuance costs.

In May 2012, NNN established an at-the-market (“ATM”) equity program which allows NNN to sell up to an aggregate of 9,000,000 shares of common stock from time to time over the next three years. NNN intends to use the net proceeds from this offering to repay outstanding indebtedness under the Credit Facility, to fund potential property acquisitions and for other general corporate purposes. During the quarter and six months ended June 30, 2012, NNN issued approximately 395,000 shares of common stock through the ATM at an average price of $27.30 per share generating approximately $10,527,000 in net proceeds. In connection with the ATM, NNN incurred stock issuance costs totaling approximately $253,000, consisting primarily of underwriters' fees and commissions and legal and accounting fees.

In July2012, NNN declared a dividend of $0.395 per share, which is payable in August2012 to its common stockholders of

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record as of July 31, 2012.

In February 2012, NNN filed a shelf registration statement with the Commission for its Dividend Reinvestment and Stock Purchase Plan (“DRIP”) which permits the issuance by NNN of up to 16,000,000 shares of common stock. The following outlines the common stock issuances pursuant to the DRIP (dollars in thousands):

	Six Months Ended June 30,
	2012		2011
Shares of common stock	1,881,807		2,284,335
Net proceeds	$	49,476	$	56,447

Note 6 – Income Taxes:

NNN has elected to be taxed as a REIT under the Internal Revenue Code (“Code”), commencing with its taxable year ended December 31, 1984.  To qualify as a REIT, NNN must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its REIT taxable income to its stockholders.  NNN intends to adhere to these requirements and maintain its REIT status. As a REIT, NNN generally will not be subject to corporate level federal income tax on taxable income that it distributes currently to its stockholders.  NNN may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income, if any.  The provision for federal income taxes in NNN's consolidated financial statements relates to its TRS operations and any potential taxable built-in gain.  NNN did not have significant tax provisions or deferred income tax items during the periods reported hereunder.

In June 2006, the FASB issued guidance, which clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements in accordance with FASB guidance included in Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

NNN, in accordance with FASB guidance included in Income Taxes, has analyzed its various federal and state tax filing positions. NNN believes that its income tax filing positions and deductions are well documented and supported. Additionally, NNN believes that its accruals for tax liabilities are adequate. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to the FASB guidance. In addition, NNN did not record a cumulative effect adjustment related to the adoption of the FASB guidance.

NNN has had no increases or decreases in unrecognized tax benefits for current or prior years since adopting the guidance. Further, no interest or penalties have been included since no reserves were recorded and no significant increases or decreases are expected to occur within the next 12 months. When applicable, such interest and penalties will be recorded as non-operating expenses. The periods that remain open under federal statute are 2008 through 2012. NNN also files in many states with varying open years under statute.

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Note 7 – Earnings from Discontinued Operations:

NNN classified the revenues and expenses related to properties which were sold or were held for sale as of June 30, 2012, as discontinued operations. The following is a summary of the earnings from discontinued operations (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenues:
Rental income from operating leases	$	687		$	1,273		$	1,571		$	2,163
Earned income from direct financing leases	—			20			6			40
Interest and other income from real estate transactions	110			165			262			359
	797			1,458			1,839			2,562
Operating expenses:
General and administrative	4			3			7			7
Real estate	192			346			478			621
Depreciation and amortization	35			132			95			263
Impairment losses and other charges	345			—			380			—
	576			481			960			891
Other expenses (revenues):
Interest expense	360			340			717			681
	360			340			717			681
Earnings before gain on disposition of real estate and income tax    expense	(139		)	637			162			990
Gain on disposition of real estate	2,438			1			2,752			132
Income tax expense	(60		)	(70		)	(97		)	(117		)
Earnings from discontinued operations attributable to NNN	2,239			568			2,817			1,005
Earnings attributable to noncontrolling interests	(5		)	(33		)	(17		)	(93		)
Earnings from discontinued operations attributable to NNN	$	2,234		$	535		$	2,800		$	912

Note 8 – Derivatives:

In accordance with the guidance on derivatives and hedging, NNN records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

NNN’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements or other identified risks. To accomplish this objective, NNN primarily uses treasury locks, forward swaps and interest rate swaps as part of its cash flow hedging strategy. Treasury locks and forward starting swaps are used to hedge forecasted debt issuances. Treasury locks designated as cash flow hedges lock in the yield/price of a treasury security. Forward swaps also lock the associated swap spread. Interest rate swaps designated as cash flow hedges hedging the variable cash flows associated with floating rate debt involve the receipt of variable rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings) and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings.

NNN discontinues hedge accounting prospectively when it is determined that the derivative is no longer effective in offsetting changes in the cash flows of the hedged item, the derivative expires or is sold, terminated, or exercised, the derivative is re-designated as a hedging instrument or management determines that designation of the derivative as a hedging instrument is no longer appropriate.

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When hedge accounting is discontinued, NNN continues to carry the derivative at its fair value on the balance sheet, and recognizes any changes in its fair value in earnings or may choose to cash settle the derivative at that time.

In June 2011, NNN terminated its two treasury locks with a total notional amount of $150,000,000 that were hedging the risk of changes in the interest-related cash outflows associated with the potential issuance of long-term debt. The fair value of the treasury locks, designated as cash flow hedges, when terminated was a liability of $5,300,000, of which $5,218,000 was deferred in other comprehensive income.

As of June 30, 2012, $5,811,000 remains in other comprehensive income related to the effective portion of NNN’s previous interest rate hedges. During the six months ended June 30, 2012 and 2011, NNN reclassed out of comprehensive income $114,000 as an increase to interest expense and $85,000 as a reduction to interest expense, respectively. Over the next 12 months, NNN estimates that an additional $240,000 will be reclassified as an increase in interest expense. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on NNN’s long-term debt.

NNN does not use derivatives for trading or speculative purposes or currently have any derivatives that are not designated as hedges. NNN had no derivative financial instruments outstanding at June 30, 2012.

Note 9 – Segment Information:

As a result of a continued reduction of investments in real estate acquired for the purpose of resale, the previously reported segment of inventory assets no longer meets the criteria for significance for separate segment reporting. Therefore, for the quarters and six months ended June 30, 2012 and 2011, NNN's operations are reported within one business segment in the condensed consolidated financial statements.

Note 10 – Fair Value Measurements:

NNN currently values its Residuals based upon an independent valuation which provides a discounted cash flow analysis based upon prepayment speeds, expected loan losses and yield curves. These valuation inputs are generally considered unobservable; therefore, the Residuals are considered Level 3 financial assets. The table below presents a reconciliation of the Residuals (dollars in thousands):

	Six Months Ended June 30, 2012
Balance at beginning of period	$	15,299
Total gains (losses) – realized/unrealized:
Included in earnings	(2,718		)
Included in other comprehensive income	213
Interest income on Residuals	1,471
Cash received from Residuals	(1,870		)
Purchases, sales, issuances and settlements, net	—
Transfers in and/or out of Level 3	—
Balance at end of period	$	12,395
Changes in gains (losses) included in earnings attributable to a change in unrealized gains (losses) relating to     assets still held at the end of period	$	(130	)

Note 11 – Fair Value of Financial Instruments:

NNN believes the carrying value of its Credit Facility approximates fair value based upon its nature, terms and variable interest rate. NNN believes that the carrying value of its cash and cash equivalents, mortgages, notes and other receivables, mortgages payable and other liabilities at June 30, 2012 and December 31, 2011, approximate fair value based upon current market prices of similar issues. At June 30, 2012 and December 31, 2011, the fair value of NNN’s notes payable and convertible notes payable, collectively, was 1,347,658,000 and $1,362,922,000, respectively, based upon the quoted market price, which is level one valuation.

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Note 12 – Subsequent Events:

NNN reviewed all subsequent events and transactions that have occurred after June 30, 2012, the date of the condensed consolidated balance sheet. There were no reportable subsequent events or transactions.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K of National Retail Properties, Inc. for the year ended December 31, 2011. The term “NNN” or the “Company” refers to National Retail Properties, Inc. and all of its consolidated subsidiaries. NNN has elected to treat certain subsidiaries as taxable real estate investment trust subsidiaries. These subsidiaries and their majority owned and controlled subsidiaries are collectively referred to as the “TRS.”

Forward-Looking Statements

The information herein contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 (the “Exchange Act”). These statements generally are characterized by the use of terms such as “believe,” “expect,” “intend,” “may,” or similar words or expressions. Forward-looking statements are not historical facts or guarantees of future performance and are subject to known and unknown risks. Certain factors that could cause actual results or events to differ materially from those NNN anticipates or projects include, but are not limited to, the following:

• Current financial and economic conditions may have an adverse impact on NNN, its tenants, and commercial real estate in general;

• NNN may be unable to obtain debt or equity capital on favorable terms, if at all;

• Loss of revenues from tenants would reduce NNN's cash flow;

• A significant portion of the source of NNN's Property Portfolio annual base rent is heavily concentrated in specific industry classifications, tenants and in specific geographic locations;

• Owning real estate and indirect interests in real estate carries inherent risk;

• NNN's real estate investments are illiquid;

• Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations;

• NNN may be subject to known or unknown environmental liabilities and hazardous materials on properties owned by NNN;

• NNN may not be able to successfully execute its acquisition or development strategies;

• NNN may not be able to dispose of properties consistent with its operating strategy;

• A change in the assumptions used to determine the value of commercial mortgage residual interests could adversely affect NNN's financial position;

• NNN may suffer a loss in the event of a default or bankruptcy of a borrower or a tenant;

• Certain provisions of NNN's leases or loan agreements may be unenforceable;

• Property ownership through joint ventures and partnerships could limit NNN's control of those investments;

• Competition with numerous other REITs, commercial developers, real estate limited partnerships and other investors may impede NNN's ability to grow;

• NNN's loss of key management could adversely affect performance and the value of its common stock;

• Uninsured losses may adversely affect NNN's ability to pay outstanding indebtedness;

• Acts of violence, terrorist attacks or war may adversely affect the markets in which NNN operates and NNN's results of operations;

• Vacant properties or bankrupt tenants could adversely affect NNN's business or financial condition;

• The amount of debt NNN has and the restrictions imposed by that debt could adversely affect NNN's business and financial condition;

• NNN is obligated to comply with financial and other covenants in its debt instruments that could restrict its operating activities, and the failure to comply with such covenants could result in defaults that accelerate the payment of such debt;

• The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility;

• NNN's failure to qualify as a real estate investment trust for federal income tax purposes could result in significant tax liability;

• Even if NNN remains qualified as a REIT, NNN may face other tax liabilities that reduce operating results and cash flow;

• Adverse legislative or regulatory tax changes could reduce NNN's earnings, cash flow and market price of NNN's common stock;

• Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and negatively affect NNN's operating decisions;

• Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial

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performance;

• NNN's failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results and share price;

• NNN's ability to pay dividends in the future is subject to many factors; and

• Cybersecurity risks and cyber incidents could adversely affect NNN's business and disrupt operations.

Additional information related to these risks and uncertainties are included in Item 1A. Risk Factors of NNN's Annual Report on Form 10-K for the year ended December 31, 2011, and may cause NNN's actual future results to differ materially from expected results. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. NNN undertakes no obligation to update or revise such forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

NNN, a Maryland corporation, is a fully integrated real estate investment trust (“REIT”) formed in 1984. NNN assets include: real estate assets, mortgages and notes receivable, and commercial mortgage residual interests. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and primarily held for investment (“Properties” or “Property Portfolio”).

As of June 30, 2012, NNN owned 1,506 Properties, with an aggregate gross leasable area of approximately 17,798,000 square feet, located in 47 states. Approximately 98 percent of total properties in the Property Portfolio were leased as of June 30, 2012. Effective May 1, 2012, none of NNN's Properties were operated.

NNN’s management team focuses on certain key indicators to evaluate the financial condition and operating performance of NNN. The key indicators for NNN include items such as: the composition of the Property Portfolio (such as tenant, geographic and line of trade diversification), the occupancy rate of the Property Portfolio, certain financial performance ratios and profitability measures, and industry trends and performance compared to that of NNN.

NNN continues to maintain its diversification by tenant, geography and tenant’s line of trade. NNN’s highest lines of trade concentrations are the convenience store and restaurant (including full and limited service) sectors. These sectors represent a large part of the freestanding retail property marketplace and NNN’s management believes these sectors present attractive investment opportunities. NNN’s Property Portfolio is geographically concentrated in the south and southeast United States, which are regions of historically above-average population growth. Given these concentrations, any financial hardship within these sectors or geographic locations, respectively, could have a material adverse effect on the financial condition and operating performance of NNN.

Prior to December 31, 2011, NNN reported its operations in two primary business segments, investment assets and inventory assets. As a result of a continued reduction of investments in real estate acquired for the purpose of resale, the previously reported segment of inventory assets no longer meets the criteria for significance for separate segment reporting. Currently, NNN's operations are reported within one business segment in the financial statements and all properties are considered part of the Properties or Property Portfolio. As such, property counts and calculations involving property counts reflect all NNN properties.

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Results of Operations

Property Analysis

General.  The following table summarizes NNN’s Property Portfolio as of:

	June 30, 2012		December 31, 2011		June 30, 2011
Properties Owned:
Number	1,506		1,422		1,248
Total gross leasable area (square feet)	17,798,000		16,428,000		13,623,000
Properties:
Leased and operated	1,471		1,375		1,209
Percent of Properties – leased and operated	98	%	97	%	97	%
Weighted average remaining lease term (years)	12		12		12
Total gross leasable area (square feet) – leased and operated	17,331,000		15,681,000		12,912,000

The following table summarizes the diversification of NNN’s Property Portfolio based on the top 10 lines of trade:

		% of Annual Base Rent (1)
	Lines of Trade	June 30, 2012		December 31, 2011		June 30, 2011
1.	Convenience stores	22.6	%	24.6	%	22.9	%
2.	Restaurants - full service	11.4	%	9.4	%	10.6	%
3.	Automotive parts	6.0	%	6.5	%	7.6	%
4.	Automotive service	5.9	%	4.9	%	5.3	%
5.	Theaters	4.6	%	5.0	%	5.7	%
6.	Sporting goods	4.5	%	4.8	%	4.5	%
7.	Wholesale clubs	3.7	%	4.0	%	0.4	%
8.	Restaurants - limited service	3.6	%	3.6	%	4.2	%
9.	Drug Stores	3.2	%	3.2	%	3.8	%
10.	Consumer electronics	3.2	%	3.5	%	2.5	%
	Other	31.3	%	30.5	%	32.5	%
		100.0	%	100.0	%	100.0	%

⁽¹⁾ Based on annualized base rent for all leases in place for each respective period.

Property Acquisitions.  The following table summarizes the Property acquisitions (dollars in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Acquisitions:
Number of Properties	27		25		94		54
Gross leasable area (square feet)	880,000		303,000		1,473,000		657,000
Total dollars invested(1)	$	114,980	$	54,208	$	312,958	$	109,261

⁽¹⁾ Includes dollars invested in projects under construction or tenant improvements for each respective year.

NNN typically funds property acquisitions either through borrowings under NNN's unsecured revolving credit facility or by issuing its debt or equity securities in the capital markets.

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Property Dispositions.  The following table summarizes the properties sold by NNN (dollars in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Number of properties	7		—		10		2
Gross leasable area (square feet)	81,000		—		101,000		11,000
Net sales proceeds	$	6,589	$	—	$	11,741	$	1,831
Net gain	$	2,438	$	—	$	2,752	$	86

NNN typically uses the proceeds from property sales either to pay down the credit facility or reinvest in real estate.

Revenue from Continuing Operations Analysis

General.  During the quarter and six months ended June 30, 2012, NNN’s rental income increased primarily due to the increase in rental income from property acquisitions (See “Results of Operations – Property Analysis – Property Acquisitions”). NNN anticipates increases in rental income will continue to come from additional property acquisitions and increases in rents pursuant to lease terms.

The following summarizes NNN’s revenues from continuing operations (dollars in thousands):

	Quarter Ended June 30,									Six Months Ended June 30,
	2012		2011		2012		2011		Percent Increase (Decrease)	2012		2011		2012		2011		Percent Increase (Decrease)
					Percent of Total									Percent of Total
Rental Income(1)	$	78,766	$	58,403	95.2	%	94.4	%	34.9%	$	153,072	$	116,206	94.9	%	94.2	%	31.7%
Real estate expense reimbursement from tenants	2,505		2,142		3.0	%	3.5	%	16.9%	5,337		4,422		3.3	%	3.6	%	20.7%
Interest and other income from real estate transactions	764		543		0.9	%	0.9	%	40.7%	1,470		1,164		0.9	%	0.9	%	26.3%
Interest income on commercial mortgage residual interests	716		777		0.9	%	1.2	%	(7.9)%	1,471		1,544		0.9	%	1.3	%	(4.7)%
Total revenues from continuing operations	$	82,751	$	61,865	100.0	%	100.0	%	33.8%	$	161,350	$	123,336	100.0	%	100.0	%	30.8%

(1) Includes rental income from operating leases, earned income from direct financing leases and percentage rent from continuing operations (“Rental Income”).

Rental Income.  Rental Income increased in amount and as a percent of the total revenues from continuing operations for the quarter and six months ended June 30, 2012, as compared to the same period in 2011. The increase for the quarter and six months ended June 30, 2012, is primarily due to the acquisition of 93 properties with aggregate gross leasable area of approximately 1,466,000 square feet during the six months ended 2012 and 218 properties with aggregate gross leasable area of approximately 3,445,000 square feet during 2011.

Real Estate Expense Reimbursement from Tenants.  Real estate expense reimbursements from tenants increased for the quarter and six months ended June 30, 2012, as compared to the same period in 2011, but remained relatively stable as a percentage of total revenues from continuing operations. The increase is primarily attributable to a full year of reimbursements from certain properties acquired in 2011.

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Analysis of Expenses from Continuing Operations

General.  Operating expenses from continuing operations increased during the quarter and six months ended June 30, 2012, primarily due to the increase in depreciation expense from certain properties acquired in 2011 and impairment on the commercial mortgage residual interest ("Residuals") valuations. The following table summarizes NNN’s expenses from continuing operations for the quarters ended June 30 (dollars in thousands):

							Percent Increase (Decrease)	Percentage of Total				Percentage of Revenues from Continuing Operations
	2012			2011				2012		2011		2012		2011
General and administrative	$	7,024		$	6,568		6.9%	21.4	%	26.8	%	8.5	%	10.6	%
Real estate	4,025			3,919			2.7%	12.3	%	16.0	%	4.9	%	6.3	%
Depreciation and amortization	19,032			13,765			38.3%	58.0	%	56.1	%	23.0	%	22.3	%
Impairment – commercial mortgage residual interests valuation	2,718			267			918.0%	8.3	%	1.1	%	3.3	%	0.4	%
Total operating expenses	$	32,799		$	24,519		33.8%	100.0	%	100.0	%	39.7	%	39.6	%
Interest and other income	$	(361	)	$	(283	)	27.6%	(1.9	)%	(1.6	)%	(0.4	)%	(0.5	)%
Interest expense	19,394			17,512			10.7%	101.9	%	101.6	%	23.4	%	28.3	%
Total other expenses	$	19,033		$	17,229		10.5%	100.0	%	100.0	%	23.0	%	27.8	%

The following table summarizes NNN’s expenses from continuing operations for the six months ended June 30 (dollars in thousands):

							Percent Increase (Decrease)	Percentage of Total				Percentage of Revenues from Continuing Operations
	2012			2011				2012		2011		2012		2011
General and administrative	$	14,627		$	13,226		10.6%	23.2	%	27.3	%	9.1	%	10.7	%
Real estate	8,597			7,573			13.5%	13.6	%	15.7	%	5.3	%	6.1	%
Depreciation and amortization	37,140			27,184			36.6%	58.9	%	56.2	%	23.0	%	22.0	%
Impairment – commercial mortgage residual interests valuation	2,718			396			586.4%	4.3	%	0.8	%	1.7	%	0.3	%
Total operating expenses	$	63,082		$	48,379		30.4%	100.0	%	100.0	%	39.1	%	39.1	%
Interest and other income	$	(719	)	$	(625	)	15.0%	(1.9	)%	(1.8	)%	(0.4	)%	(0.5	)%
Interest expense	39,039			35,174			11.0%	101.9	%	101.8	%	24.2	%	28.5	%
Total other expenses	$	38,320		$	34,549		10.9%	100.0	%	100.0	%	23.8	%	28.0	%

General and Administrative Expenses.  General and administrative expenses increased for the quarter and six months ended June 30, 2012, as compared to the same period in 2011, but decreased as a percentage of total operating expenses and as a percentage of revenues from continuing operations. The increase in general and administrative expenses is primarily attributable to an increase in stock based incentive compensation.

Real Estate.  Real estate expenses increased for the quarter and six months ended June 30, 2012, as compared to the same period in 2011, but decreased as a percentage of total operating expenses and as a percentage of revenues from continuing operations. The increase is primarily due to an increase in tenant reimbursable expenses for certain properties acquired in 2011.

Depreciation and Amortization.  Depreciation and amortization expenses increased as a percentage of total operating expenses and as a percentage of revenues from continuing operations for the quarter and six months ended June 30, 2012, as compared to the quarter and six months ended June 30, 2011. The increase is primarily due to depreciation expense from the 218 properties

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with aggregate gross leasable area of approximately 3,445,000 square feet acquired during 2011.

Impairment  –  Commercial Mortgage Residual Interests Valuation.  In connection with the independent valuations of the Residuals fair value, during the six months ended June 30, 2012 and 2011, NNN recorded an other than temporary valuation adjustment of $2,718,000 and $396,000, respectively, as a reduction of earnings from operations.

Interest Expense.  Interest expense increased for the quarter and six months ended June 30, 2012, as compared to the same periods in 2011.

The following represents the primary changes in debt that have impacted interest expense:

(i) the issuance of $300,000,000 in July 2011 of notes payable with a maturity of July 2021, and stated interest rate of 5.500%, and

(ii) the decrease of $138,154,000 in the weighted average debt outstanding on the Credit Facility for the six months ended June 30, 2012, as compared to the same period in 2011.

Discontinued Operations

Earnings (Loss). NNN classified as discontinued operations the revenues and expenses related to its revenue generating Properties that were sold and any revenue generating Properties that were held for sale at June 30, 2012.

The following table summarizes the earnings from discontinued operations for the quarters ended June 30 (dollars in thousands):

	2012						2011
	# of Sold Properties	Gain		Earnings			# of Sold Properties	Gain		Earnings
Properties	7	$	2,438	$	2,239		—	$	1	$	568
Noncontrolling interests	—	—		(5		)	—	—		(33		)
	7	$	2,438	$	2,234		—	$	1	$	535

The following table summarizes the earnings from discontinued operations for the six months ended June 30 (dollars in thousands):

	2012						2011
	# of Sold Properties	Gain		Earnings			# of Sold Properties	Gain		Earnings
Properties	10	$	2,752	$	2,817		2	$	87	$	1,005
Noncontrolling interests	—	—		(17		)	—	—		(93		)
	10	$	2,752	$	2,800		2	$	87	$	912

NNN periodically sells Properties and may reinvest the sales proceeds to purchase additional properties. NNN evaluates its ability to pay dividends to stockholders by considering the combined effect of income from continuing and discontinued operations.

Liquidity

General.  NNN’s demand for funds has been and will continue to be primarily for (i) payment of operating expenses and cash dividends; (ii) property acquisitions and development; (iii) origination of mortgages and notes receivable; (iv) capital expenditures; (v) payment of principal and interest on its outstanding indebtedness; and (vi) other investments.

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Cash and Cash Equivalents.  The table below summarizes NNN’s cash flows (in thousands):

	Six Months Ended June 30,
	2012			2011
Cash and cash equivalents:
Provided by operating activities	$	99,767		$	77,859
Used in investing activities	(281,272		)	(114,866		)
Provided by financing activities	182,330			38,547
Increase	825			1,540
Net cash at beginning of period	2,082			2,048
Net cash at end of period	$	2,907		$	3,588

Cash provided by operating activities represents cash received primarily from rental income from tenants, proceeds from the disposition of certain properties and interest income less cash used for general and administrative expenses, interest expense and acquisition of certain properties. NNN’s cash flow from operating activities, net of cash used in and provided by the acquisition and disposition of certain properties, has been sufficient to pay the distributions for each period presented. NNN generally uses proceeds from its Credit Facility or from offerings of equity or debt securities in the capital markets to fund the acquisition of its properties. The change in cash provided by operations for the six months ended June 30, 2012 and 2011, is primarily the result of changes in revenues and expenses as discussed in “Results of Operations.” Cash generated from operations is expected to fluctuate in the future.

Changes in cash for investing activities are primarily attributable to the acquisitions and dispositions of Properties.

NNN’s financing activities for the six months ended June 30, 2012, included the following significant transactions:

• $77,000 in net proceeds from NNN's credit facility,

• $277,645,000 in net proceeds from the issuance of 11,500,000 depositary shares representing interests in NNN's 6.625% Series D Cumulative Redeemable Preferred Stock (the "Series D Preferred Stock") in February,

• $92,000,000 paid to fully redeem NNN's 7.375% Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock"),

• $49,476,000 in net proceeds from the issuance of 1,881,807 shares of common stock in connection with the Dividend Reinvestment and Stock Purchase Plan ("DRIP"),

• $10,527,000 in net proceeds from the issuance of approximately 395,000 shares of common stock in connection with the at-the-market ("ATM") equity program,

• $81,511,000 in dividends paid to common stockholders,

• $1,979,000 in dividends paid to holders of the depositary shares of NNN’s Series C Preferred Stock,

• $5,926,000 in dividends paid to holders of the depositary shares of NNN’s Series D Preferred Stock, and

• $50,000,000 in repayment of notes payable.

Contractual Obligations and Commercial Commitments. As of June 30, 2012, NNN has agreed to fund construction commitments in connection with the improvements of leased Properties as outlined in the table below (dollars in thousands):

	# of Properties	Total Commitment(1)		Amount Funded		Remaining Commitment
Real Estate Portfolio	54	$	167,243	$	127,693	$	39,550

⁽¹⁾ Includes land and construction costs.

 As of June 30, 2012, NNN did not have any other material contractual cash obligations, such as purchase obligations, financing lease obligations or other long-term liabilities other than those reflected in the table above and previously disclosed under Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in NNN's Annual Report on Form 10-K for the year ended December 31, 2011. In addition to items reflected in the table, NNN has issued preferred stock with cumulative preferential cash distributions, as described below under “Dividends.”

Management anticipates satisfying these obligations with a combination of NNN’s cash provided from operations, current

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capital resources on hand, its credit facility, debt or equity financings and asset dispositions.

Generally the Properties are leased under long-term net leases, which generally require the tenant to pay all property taxes and assessments, substantially maintain the interior and exterior of the property and carry property, and liability insurance coverage. Therefore, management anticipates that capital demands to meet obligations with respect to these Properties will be modest for the foreseeable future and can be met with funds from operations and working capital. Certain of NNN’s Properties are subject to leases under which NNN retains responsibility for specific costs and expenses associated with the Property. Management anticipates the costs associated with NNN’s vacant Properties or those Properties that become vacant will also be met with funds from operations and working capital. NNN may be required to borrow under its credit facility or use other sources of capital in the event of unforeseen significant capital expenditures.

The lost revenues and increased property expenses resulting from vacant properties or uncollectibility of lease revenues could have a material adverse effect on the liquidity and results of operations if NNN is unable to re-lease the Properties at comparable rental rates and in a timely manner. As of June 30, 2012, NNN owned 35 vacant, un-leased Properties which accounted for less than two percent of total Properties held in NNN’s Property Portfolio.

NNN generally monitors the financial performance of NNN's significant tenants on an ongoing basis.

Dividends.  NNN has made an election to be taxed as a REIT under Sections 856 through 860 of the Code, as amended, and related regulations and intends to continue to operate so as to remain qualified as a REIT for federal income tax purposes. NNN generally will not be subject to federal income tax on income that it distributes to its stockholders, provided that it distributes 100 percent of its REIT taxable income and meets certain other requirements for qualifying as a REIT. If NNN fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost. Such an event could materially adversely affect NNN’s income and ability to pay dividends. NNN believes it has been structured as, and its past and present operations qualify NNN as, a REIT.

One of NNN’s primary objectives, consistent with its policy of retaining sufficient cash for reserves and working capital purposes and maintaining its status as a REIT, is to distribute a substantial portion of its funds available from operations to its stockholders in the form of dividends.

The following table outlines the dividends declared and paid for each issuance of NNN's stock (in thousands, except per share data):

		Six Months Ended June 30,
		2012		2011
Series C preferred stock (1):
	Dividends	$	1,979	$	3,392
	Per share	0.5378		0.9218
Series D preferred stock (2):
	Dividends	5,926		—
	Per share	0.5153		—
Common stock:
	Dividends	81,511		63,887
	Per share	0.770		0.760

¹⁾ The Series C preferred stock was redeemed in March 2012. The dividends paid during the quarter ended March 31, 2012 include accumulated and unpaid dividends through the redemption date.

²⁾ The Series D preferred stock dividends paid during the quarter ended June 30, 2012 include accumulated and unpaid dividends from the issuance date through the declaration date. The Series D preferred stock has no maturity date and will remain outstanding unless redeemed.

In July2012, NNN declared a dividend of $0.395 per share which is payable in August2012 to its common stockholders of record as of July 31, 2012.

Capital Resources

Generally, cash needs for property acquisitions, mortgages and notes receivable investments, debt payments, capital

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expenditures, development and other investments have been funded by equity and debt offerings, bank borrowings, the sale of properties and, to a lesser extent, by internally generated funds. Cash needs for operating expenses and dividends have generally been funded by internally generated funds. If available, future sources of capital include proceeds from the public or private offering of NNN’s debt or equity securities, secured or unsecured borrowings from banks or other lenders, proceeds from the sale of properties, as well as undistributed funds from operations.

Debt

The following is a summary of NNN’s total outstanding debt as of (dollars in thousands):

	June 30, 2012		Percentage of Total	December 31, 2011		Percentage of Total
Line of credit payable	$	142,600	10.4%	$	65,600	4.9%
Mortgages payable	29,341		2.1%	23,171		1.8%
Notes payable – convertible	357,479		26.0%	355,371		26.5%
Notes payable	845,237		61.5%	894,967		66.8%
Total outstanding debt	$	1,374,657	100.0%	$	1,339,109	100.0%

Indebtedness.  NNN expects to use indebtedness primarily for property acquisitions and development of single-tenant retail properties, either directly or through investment interests, and mortgage and note receivables.

Line of Credit Payable. In May 2011, NNN amended and restated its credit agreement increasing the borrowing capacity under its unsecured revolving credit facility from $400,000,000 to $450,000,000 and amending certain other terms under the former revolving credit facility (as the context requires, the previous and new revolving credit facility, the “Credit Facility”). The Credit Facility had a weighted average outstanding balance of $52,946,000 and a weighted average interest rate of 1.8 percent during the quarter ended June 30, 2012. The Credit Facility matures May 2015, with an option by NNN to extend maturity to May 2016. The Credit Facility bears interest at LIBOR plus 150 basis points; however, such interest rate may change pursuant to a tiered interest rate structure based on NNN's debt rating. The Credit Facility also includes an accordion feature for NNN to increase the facility size up to $650,000,000, subject to lender approval. As of June 30, 2012, $142,600,000 was outstanding, and $307,400,000 was available for future borrowings under the Credit Facility, excluding undrawn letters of credit totaling $3,800,000.

Notes Payable – Convertible.  Each of NNN’s outstanding series of convertible notes is summarized in the table below (dollars in thousands, except per share conversion price):

Terms	2026 Notes(1)(3)				2028 Notes(1)(4)
Issue date	September 2006				March 2008
Net proceeds	$	168,650			$	228,576
Stated interest rate	3.950		%		5.125		%	(5)
Debt issuance costs	$	3,850		(2)	$	5,459
Earliest conversion date (6)	September 2025				June 2027
Earliest put option date	September 2016				June 2013
Maturity date	September 2026				June 2028
Original principal	$	172,500			$	234,035
Repurchases	(33,800		)		(11,000		)
Outstanding principal balance at June 30, 2012	$	138,700			$	223,035

⁽¹⁾  Debt issuance costs include underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses. These costs have been deferred and are being amortized over the period to the earliest put option date of the holders using the effective interest method.

⁽²⁾  The debt issuance costs associated with the 2026 Notes are fully amortized.

⁽³⁾  The conversion rate per $1 principal amount was 42.4552 shares of NNN's common stock, which is equivalent to a conversion price of $23.5542 per share of common stock.

⁽⁴⁾  The conversion rate per $1 principal amount was 39.4381 shares of NNN’s common stock, which is equivalent to a conversion price of $25.3562 per share of common stock.

⁽⁵⁾  With the adoption of the accounting guidance on convertible debt securities in 2009, the effective interest rate for the Notes is

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7.192%.

⁽⁶⁾  Prior to the earliest respective conversion date, the notes are only convertible in limited circumstances pursuant to the terms of the notes.

Each series of convertible notes represents senior, unsecured obligations of NNN and is subordinated to all secured indebtedness of the Company. Each note is redeemable at the option of NNN, in whole or in part, at a redemption price equal to the sum of (i) the principal amount of the notes being redeemed plus accrued and unpaid interest thereon through but not including the redemption date, and (ii) the make-whole amount, if any, as defined in the applicable supplemental indenture relating to the notes.

Notes Payable.  Each of NNN’s outstanding series of non-convertible notes is summarized in the table below (dollars in thousands):

Notes	Issue Date	Principal		Discount(3)		Net Price		Stated Rate	Effective Rate(4)	Maturity Date
2014(1)(2)(5)	June 2004	$	150,000	$	440	$	149,560	6.250%	5.910%	June 2014
2015(1)	November 2005	150,000		390		149,610		6.150%	6.185%	December 2015
2017(1)(6)	September 2007	250,000		877		249,123		6.875%	6.924%	October 2017
2021(1)(7)	July 2011	300,000		4,269		295,731		5.500%	5.690%	July 2021

⁽¹⁾  The proceeds from the note issuance were used to pay down outstanding indebtedness of NNN’s Credit Facility.

⁽²⁾  The proceeds from the note issuance were used to repay the obligation of notes maturing in 2004.

⁽³⁾  The note discounts are amortized to interest expense over the respective term of each debt obligation using the effective interest method.

⁽⁴⁾  Includes the effects of the discount, treasury lock gain / loss and swap gain / loss (as applicable).

⁽⁵⁾  NNN entered into a forward starting interest rate swap agreement which fixed a swap rate of 4.61% on a notional amount of $94,000. Upon issuance of the 2014 Notes, NNN terminated the forward starting interest rate swap agreement resulting in a gain of $4,148. The gain has been deferred and is being amortized as an adjustment to interest expense over the term of the 2014 Notes using the effective interest method.

⁽⁶⁾  NNN entered into an interest rate hedge with a notional amount of $100,000. Upon issuance of the 2017 Notes, NNN terminated the interest rate hedge agreement resulting in a liability of $3,260, of which $3,228 was recorded to other comprehensive income. The liability has been deferred and is being amortized as an adjustment to interest expense over the term of the 2017 Notes using the effective interest method.

⁽⁷⁾  NNN entered into two interest rate hedges with a total notional amount of $150,000. Upon issuance of the 2021 Notes, NNN terminated the interest rate hedge agreements resulting in a liability of $5,300, of which $5,218 was deferred in other comprehensive income. The deferred liability is being amortized over the term of the 2021 Notes using the effective interest method.

Each series of notes represents senior, unsecured obligations of NNN and is subordinated to all secured indebtedness of NNN. The notes are redeemable at the option of NNN, in whole or in part, at a redemption price equal to the sum of (i) the principal amount of the notes being redeemed plus accrued and unpaid interest thereon through the redemption date, and (ii) the make-whole amount, if any, as defined in the applicable supplemental indenture relating to the notes.

In connection with the note offerings, NNN incurred aggregate note issuance costs totaling $8,001,000 consisting primarily of underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses. Debt issuance costs for all note issuances have been deferred and are being amortized over the term of the respective notes using the effective interest method.

In accordance with the terms of the indentures, pursuant to which NNN’s notes and convertible notes have been issued, NNN is required to meet certain restrictive financial covenants, which, among other things, require NNN to maintain (i) certain leverage ratios, and (ii) certain interest coverage. At June 30, 2012, NNN was in compliance with those covenants. NNN’s failure to comply with certain of its debt covenants could result in defaults that accelerate the payment under such debt and limit the dividends paid to NNN’s common and preferred stockholders which would likely have a material adverse impact on NNN’s financial condition and results of operations. In addition, these defaults could impair its access to the debt and equity markets.

Debt and Equity Securities

NNN has used, and expects to use in the future, issuances of debt and equity securities primarily to pay down its outstanding indebtedness and to finance investment acquisitions.

Securities Offering. In February 2012, NNN filed a shelf registration statement with the Securities and Exchange Commission

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(the “Commission”) which was automatically effective and permits the issuance by NNN of an indeterminate amount of debt and equity securities.

A description of NNN’s outstanding series of publicly held notes is found under “Debt – Notes Payable – Convertible” and "Debt – Notes Payable" above.

7.375% Series C Cumulative Redeemable Preferred Stock.   In October 2006, NNN issued 3,680,000 depositary shares, each representing 1/100^th of a share of Series C Preferred Stock.

In March 2012, NNN redeemed all outstanding depositary shares (3,680,000) representing interests in its Series C Preferred Stock. The Series C Preferred Stock was redeemed at $25.00 per depositary share, plus accumulated and unpaid distributions through the redemption date, for an aggregate redemption price of $25.0768229 per depositary share. The excess carrying amount of preferred stock redeemed over the cash paid to redeem the preferred stock was $3,098,000 of Series C Preferred Stock issuance costs.

6.625% Series D Cumulative Redeemable Preferred Stock. On February 23, 2012, NNN consummated an underwritten public offering of 11,500,000 depositary shares (including 1,500,000 shares in connection with the underwriters over-allotment), each representing a 1/100^th interest in a share of Series D Preferred Stock, and received gross proceeds of $287,500,000.In connection with this offering, the Company incurred stock issuance costs of approximately $9,855,000, consisting primarily of underwriting commissions and fees, legal and accounting fees and printing expenses.

Holders of the Series D depositary shares are entitled to receive, when and as authorized by the Board of Directors, cumulative preferential cash dividends at the rate of 6.625% of the $25.00 liquidation preference per depositary share per annum (equivalent to a fixed annual amount of $1.65625 per depositary share). The Series D Preferred Stock underlying the depositary shares ranks senior to NNN’s common stock with respect to dividend rights and rights upon liquidation, dissolution or winding up of NNN. The Series D Preferred Stock has no maturity date and will remain outstanding unless redeemed. NNN may redeem the Series D Preferred Stock underlying the depositary shares on or after September 23, 2017, for cash, at a redemption price of $2,500.00 per share (or $25.00 per depositary share), plus all accumulated and unpaid dividends. In addition, upon a change of control, as defined in the articles supplementary fixing the rights and preferences of the Series D Preferred Stock, NNN may redeem the Series D Preferred Stock underlying the depositary shares at a redemption price of $2,500.00 per share (or $25.00 per depositary share), plus all accumulated and unpaid dividends, and in limited circumstances the holders of depositary shares may convert some or all of their Series D Preferred Stock into shares of NNN's common stock at conversion rates provided in the related articles supplementary. As of July 27, 2012, the Series D Preferred Stock was not redeemable or convertible.

NNN used a portion of the net proceeds (including net proceeds from the underwriters' over-allotment exercise) of approximately $277,645,000 from the Series D Preferred Stock offering to redeem the Series C Preferred Stock for an aggregate redemption price of $92,000,000, excluding accumulated dividends of $283,000. NNN used the remainder of the net proceeds for general corporate purposes, including repaying outstanding indebtedness under its Credit Facility.

Common Stock Issuances. In May 2012, NNN established an ATM equity program which allows NNN to sell up to 9,000,000 shares of common stock from time to time over the next three years. NNN intends to use the net proceeds from this offering to repay outstanding indebtedness under the Credit Facility, to fund potential property acquisitions and for other general corporate purposes. During the quarter and six months ended June 30, 2012, NNN issued approximately 395,000 shares of common stock through the ATM at an average price of $27.30 per share generating approximately $10,527,000 in net proceeds. In connection with the ATM, NNN incurred stock issuance costs totaling approximately $253,000, consisting primarily of underwriters' fees and commissions, and legal and accounting fees.

In February 2012, NNN filed a shelf registration statement which was automatically effective, with the Commission for its DRIP, which permits the issuance by NNN of up to 16,000,000 shares of common stock. NNN’s DRIP provides an economical and convenient way for current stockholders and other interested new investors to invest in NNN’s common stock. The following outlines the common stock issuances pursuant to NNN’s DRIP (dollars in thousands):

	Six Months Ended June 30,
	2012		2011
Shares of common stock	1,881,807		2,284,335
Net proceeds	$	49,476	$	56,447

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Commercial Mortgage Residual Interests

In connection with the independent valuations of the Residuals' fair value, NNN adjusted the carrying value of the Residuals to reflect such fair value as of September 30, 2011. Due to changes in market conditions relating to residual assets, the independent valuation changed certain of the valuation assumptions. The following table summarizes the key assumptions used in determining the value of the Residuals as of:

	June 30, 2012		December 31, 2011
Discount rate	25	%	25	%
Average life equivalent CPR (1) speeds range	0.80% to 20.42% CPR		2.18% to 18.57% CPR
Foreclosures:
Frequency curve default model	0.1% - 3.9% range		0.2% - 4.7% range
Loss severity of loans in foreclosure	20	%	20	%
Yield:
LIBOR	Forward 3-month curve		Forward 3-month curve
Prime	Forward curve		Forward curve
(1) Conditional prepayment rate

The following table summarizes the recognition of unrealized gains and/or losses recorded as other comprehensive income as well as other than temporary valuation impairments recorded in condensed consolidated statements of earnings (dollars in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Unrealized gains	$	213	$	539	$	213	$	599
Other than temporary valuation impairment	2,718		267		2,718		396

Recent Accounting Pronouncements

Refer to Note 1 to the June 30, 2012, Condensed Consolidated Financial Statements.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

NNN is exposed to interest rate risk primarily as a result of its variable rate Credit Facility and its fixed rate debt which is used to finance NNN’s development and acquisition activities, as well as for general corporate purposes. NNN’s interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. To achieve its objectives, NNN borrows at both fixed and variable rates on its long-term debt. As of June 30, 2012, NNN had no outstanding derivatives.

The information in the table below summarizes NNN’s market risks associated with its debt obligations outstanding as of June 30, 2012 and December 31, 2011. The table presents principal payments and related interest rates by year for debt obligations outstanding as of June 30, 2012. The variable interest rates shown represent weighted average rate for the Credit Facility for the six months ended June 30, 2012. The table incorporates only those debt obligations that existed as of June 30, 2012, and it does not consider those debt obligations or positions which could arise after this date. Moreover, because firm commitments are not presented in the table below, the information presented therein has limited predictive value. As a result, NNN’s ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the quarter, NNN’s hedging strategies at that time and interest rates. If interest rates on NNN’s variable rate debt increased by one percent, NNN’s interest expense would have increased by less than one percent for the six months ended June 30, 2012.

Debt Obligations (dollars in thousands)
	Variable Rate Debt				Fixed Rate Debt
	Credit Facility				Mortgages(1)				Unsecured Debt(2)
	Debt Obligation		Weighted Average Interest Rate		Debt Obligation		Weighted Average Effective Interest Rate		Debt Obligation		Effective Interest Rate
2012	$	—			$	18,739	6.92	%	$	—
2013	—				1,127		6.79	%	218,779		7.19	%
2014	—				1,158		7.16	%	149,892		5.91	%
2015	142,600		1.78	%	1,207		6.67	%	149,838		6.19	%
2016	—				6,842		5.26	%	138,700		5.84	%
Thereafter	—				268		8.47	%	545,507		6.25	%
Total	$	142,600			$	29,341	6.53	%	$	1,202,716	6.33	%
Fair Value:
June 30, 2012	$	142,600			$	29,341			$	1,347,658
December 31, 2011	$	65,600			$	23,171			$	1,362,922

⁽¹⁾ NNN's mortgages payable include unamortized premiums.

⁽²⁾ Includes NNN’s notes payable and convertible notes payable, each net of unamortized discounts. NNN uses Bloomberg to determine the fair value.

NNN is also exposed to market risks related to NNN’s Residuals. Factors that may impact the market value of the Residuals include delinquencies, loan losses, prepayment speeds and interest rates. The Residuals, which are reported at market value based upon an independent valuation, had a carrying value of $12,395,000 and $15,299,000 as of June 30, 2012 and December 31, 2011, respectively. Unrealized gains and losses are reported as other comprehensive income in stockholders’ equity. Losses considered other than temporary are reported as a valuation impairment in earnings from operations if and when there has been a change in the timing or amount of estimated cash flows that leads to a loss in value.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. An evaluation was performed under the supervision and with the participation of NNN's management, including NNN's Chief Executive Officer and Chief Financial Officer, of the effectiveness as of June 30, 2012 of the design and operation of NNN's disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting. There has been no change in NNN's internal control over financial reporting that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, NNN's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings. Not applicable.

Item 1A. Risk Factors. There were no material changes in NNN's risk factors disclosed in Item 1A. Risk Factors of NNN's Annual Report on Form 10-K for the year ended December 31, 2011.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds. Not applicable.

Item 3. Defaults Upon Senior Securities. Not applicable.

Item 4. Mine Safety Disclosures. Not applicable.

Item 5. Other Information. Not applicable.

Item 6. Exhibits

The following exhibits are filed as a part of this report.

3.	Articles of Incorporation and Bylaws
		3.1	First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed herewith).
		3.2	Articles Supplementary Establishing and Fixing the Rights and Preferences of 6.625% Series D Cumulative Redeemable Preferred Stock, par value $0.01 per share, dated February 21, 2012 (filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated February 23, 2012 and filed with the Securities and Exchange Commission on February 23, 2012, and incorporated herein by reference).
		3.3	Third Amended and Restated Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on May 1, 2006, and incorporated herein by reference; second amendment filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 14, 2007, and incorporated herein by reference).
4.	Instruments Defining the Rights of Security Holders, Including Indentures
		4.1	Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference).
		4.2	Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference).
		4.3	Form of Supplemental Indenture No. 4 dated as of May 30, 2002, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $50,000,000 of 7.75% Notes due 2012 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
		4.4	Form of 7.75% Notes due 2012 (filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
		4.5	Form of Supplemental Indenture No. 5 dated as of June 18, 2004, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.25% Notes due 2014 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
		4.6	Form of 6.25% Notes due 2014 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).

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		4.7	Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
		4.8	Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
		4.9	Seventh Supplemental Indenture, dated as of September 13, 2006, between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
		4.10	Form of 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
		4.11	Specimen certificate representing the 7.375% Series C Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series C Preferred Stock"), of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated October 11, 2006 and filed with the Securities and Exchange Commission on October 12, 2006, and incorporated herein by reference).
		4.12	Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series C Preferred Stock (filed as Exhibit 4.18 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2006, and incorporated herein by reference).
		4.13	Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
		4.14	Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
		4.15	Form of Ninth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.1 to Registrants’ Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
		4.16	Form of 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
		4.17	Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
		4.18	Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
		4.19	Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series D Preferred Stock"), of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference).
		4.20	Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series D Preferred Stock (filed herewith).
10.	Material Contracts
		10.1	2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference).

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10.2	Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference).
10.3	Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
10.4	Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
10.5	Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
10.6	Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
10.7	Employment Agreement dated as of December 1, 2008, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
10.8	Form of Indemnification Agreement (as entered into between the Registrant and each of its directors and executive officers) (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 12, 2009, and incorporated herein by reference).
10.9	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Craig Macnab (filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
10.10	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
10.11	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
10.12	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Paul E. Bayer (filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
10.13	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
10.14	Amended and Restated Credit Agreement, dated as of May 25, 2011, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2011, and incorporated herein by reference).
10.15	Form of Restricted Award Agreement - Performance between NNN and the Participant of NNN (filed as Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).
10.16	Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.16 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).
10.17	Form of Restricted Award Agreement - Special Grant between NNN and the Participant of NNN (filed as Exhibit 10.17 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).

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31.	Section 302 Certifications
		31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
		31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.	Section 906 Certifications
		32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
		32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
99.	Additional Exhibits
		99.1	Certification of Chief Executive Officer pursuant to Section 303A.12(a) of the New York Stock Exchange Listed Company Manual (filed as Exhibit 99.1 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2012).
101	Interactive Data File
		101.1	The following materials from National Retail Properties, Inc. Quarterly Report on Form 10-Q for the period ended June 30, 2012, formatted in Extensible Business Reporting Language: (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of comprehensive income, (iii) condensed consolidated statements of cash flows, and (iv) notes to condensed consolidated financial statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 (filed herewith).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DATED this 3rd day of August, 2012.

NATIONAL RETAIL PROPERTIES, INC.
By:	/s/ Craig Macnab
	Craig Macnab
	Chairman of the Board and Chief Executive Officer
By:	/s/ Kevin B. Habicht
	Kevin B. Habicht
	Chief Financial Officer,
	Executive Vice President and Director

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Exhibit Index

3.	Articles of Incorporation and Bylaws
	3.1	First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed herewith).
	3.2	Articles Supplementary Establishing and Fixing the Rights and Preferences of 6.625% Series D Cumulative Redeemable Preferred Stock, par value $0.01 per share, dated February 21, 2012 (filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated February 23, 2012 and filed with the Securities and Exchange Commission on February 23, 2012, and incorporated herein by reference).
	3.3	Third Amended and Restated Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on May 1, 2006, and incorporated herein by reference; second amendment filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 14, 2007, and incorporated herein by reference).
4.	Instruments Defining the Rights of Security Holders, Including Indentures
	4.1	Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference).
	4.2	Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference).
	4.3	Form of Supplemental Indenture No. 4 dated as of May 30, 2002, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $50,000,000 of 7.75% Notes due 2012 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
	4.4	Form of 7.75% Notes due 2012 (filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
	4.5	Form of Supplemental Indenture No. 5 dated as of June 18, 2004, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.25% Notes due 2014 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
	4.6	Form of 6.25% Notes due 2014 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
	4.7	Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
	4.8	Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
	4.9	Seventh Supplemental Indenture, dated as of September 13, 2006, between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
	4.10	Form of 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
	4.11	Specimen certificate representing the 7.375% Series C Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series C Preferred Stock"), of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated October 11, 2006 and filed with the Securities and Exchange Commission on October 12, 2006, and incorporated herein by reference).

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	4.12	Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series C Preferred Stock (filed as Exhibit 4.18 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2006, and incorporated herein by reference).
	4.13	Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
	4.14	Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
	4.15	Form of Ninth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.1 to Registrants’ Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
	4.16	Form of 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
	4.17	Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
	4.18	Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
	4.19	Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series D Preferred Stock"), of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference).
	4.20	Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series D Preferred Stock (filed herewith).
10.	Material Contracts
	10.1	2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference).
	10.2	Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference).
	10.3	Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
	10.4	Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
	10.5	Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
	10.6	Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
	10.7	Employment Agreement dated as of December 1, 2008, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).

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	10.8	Form of Indemnification Agreement (as entered into between the Registrant and each of its directors and executive officers) (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 12, 2009, and incorporated herein by reference).
	10.9	Amendment to Employment Agreement, dated as of November 8, 2010, between the Registrant and Craig Macnab (filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
	10.10	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
	10.11	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
	10.12	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Paul E. Bayer (filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
	10.13	Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
	10.14	Amended and Restated Credit Agreement, dated as of May 25, 2011, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2011, and incorporated herein by reference).
	10.15	Form of Restricted Award Agreement - Performance between NNN and the Participant of NNN (filed as Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).
	10.16	Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.16 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).
	10.17	Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed as Exhibit 10.17 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2012, and incorporated herein by reference).
31.	Section 302 Certifications
	31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.	Section 906 Certifications
	32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
99.	Additional Exhibits
	99.1	Certification of Chief Executive Officer pursuant to Section 303A.12(a) of the New York Stock Exchange Listed Company Manual (filed as Exhibit 99.1 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2012).
101	Interactive Data File

39

101.1 The following materials from National Retail Properties, Inc. Quarterly Report on Form 10-Q for the period ended June 30, 2012, formatted in Extensible Business Reporting Language: (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of comprehensive income, (iii) condensed consolidated statements of cash flows, and (iv) notes to condensed consolidated financial statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 (filed herewith).

40

EX-3.1

Exhibit 3.1

TABLE OF CONTENTS

Part I	First Amended and Restated Articles of Incorporation of Commercial Net Lease Realty, Inc.
Part II	Amendment to First Amended and Restated Articles of Incorporation of Commercial Net Lease Realty, Inc.
	Articles of Merger Merging Commercial Net Lease Realty Services, Inc. Into Commercial Net Lease Realty, Inc.
	Amendment to First Amended and Restated Articles of Incorporation of Commercial Net Lease Realty, Inc.
	Amendment to First Amended and Restated Articles of Incorporation of National Retail Properties, Inc.

PART I

FIRST AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

COMMERCIAL NET LEASE REALTY, INC.

     Commercial Net Lease Realty, Inc., a Maryland corporation (hereinafter the “Corporation”), hereby certifies to the Department of Assessments and Taxation of the State of Maryland, that:

     FIRST: The Corporation desires to amend and restate its charter as currently in effect.

     SECOND: Prior to this amendment and restatement the total number of shares of all classes of capital stock that the Corporation had authority to issue was one 180,000,000 shares, consisting of (i) 90,000,000 shares of common stock, par value $0.01 per share: and (ii) 90,000,000 shares of excess stock, par value $0.01 per share. The aggregate par value of all of the authorized shares of all classes of capital stock having a par value was $1,800,000.00. After this amendment and restatement the total number of shares of all classes of capital stock that the Corporation will have authority to issue will be 210,000,000 shares consisting of (i) 90,000,000 shares of common stock, par value $0.01; (ii) 15,000,000 shares of preferred stock, par value $0.01; and 105,000,000 shares of excess stock, par value $0.01. The aggregate par value of all of the authorized shares of all classes of capital stock having a par value will be $2,100,000.

     THIRD: The provisions of the charter which are now in effect and as amended hereby, stated in accordance with the Maryland General Corporation Law are as follows:

ARTICLE I
NAME

     The name of the Corporation is Commercial Net Lease Realty, Inc.

ARTICLE II
DURATION

     The duration of the Corporation is perpetual.

ARTICLE III
PURPOSES AND POWERS

     The purpose for which the Corporation is formed is to engage in any lawful business, act or activity for which corporations may be organized under the laws of the State of Maryland and, in general, to possess and exercise all the purposes, powers, rights and privileges granted to, or conferred upon, corporations by the laws of the State of Maryland now or hereafter in force, and to exercise any powers suitable, convenient or proper for the accomplishment of the purposes herein enumerated, implied or incidental to the powers herein enumerated or which at any time may appear conducive to or expedient for the accomplishment of such purposes. The foregoing shall,

except where otherwise expressed, in no way be limited or restricted by reference to or inference from the terms of any other clause of this or any other provision of this Charter or of any amendment hereto or restatement hereof, and shall each be regarded as independent and construed as powers as well as purposes.

ARTICLE IV

PRINCIPLE OFFICE AND RESIDENT AGENT

     The post office address of the principal office of the Corporation is c/o The Corporation Trust Incorporated, 300 East Lombard Street, Baltimore, MD 21202. The resident agent of the Corporation is The Corporation Trust Incorporated, 300 E. Lombard Street, Baltimore, Maryland 21202. Said resident agent is a Maryland corporation.

ARTICLE V

BOARD OF DIRECTORS

     The number of directors shall be no less than three (3), unless a lesser number is permitted pursuant to the terms of the Maryland General Corporation Law as in effect from time to time or any successor statute thereto (the “MGCL”). Subject to the foregoing, the number of directors of the Corporation shall be fixed by the Bylaws of the Corporation and maybe increased or deceased from time to time in such a manner as may be prescribed by the Bylaws. The following persons will serve as directors of the Corporation until the annual meeting and until their successors are elected and qualify:

Robert A. Bourne	Ted B. Lanier
Edward Clark	James M. Seneff, Jr.
Clifford R. Hinkle

ARTICLE VI
AUTHORIZED STOCK

     SECTION 1. TOTAL CAPITALIZATION

     The total number of shares of all classes of capital stock that the Corporation has authority to issue is two hundred ten million (210,000,000) shares consisting of (i) ninety million (90,000,000) shares of common stock, par value $0.01 (the “Common Stock”); (ii) fifteen million (15,000,000) shares of preferred stock, par value $0.01 (the “Preferred Stock”); and one hundred five million (105,000,000) shares of excess stock, par value $0.01 (the “Excess Stock”). The aggregate par value of all of the authorized shares of all classes of capital stock having a par value is $2,100,000.

     SECTION 2. CAPITAL STOCK

          A. COMMON STOCK

               (1) COMMON STOCK SUBJECT TO TERMS OF PREFERRED STOCK. The Common Stock shall be subject to the express terms of the Preferred Stock.

               (2) DIVIDEND RIGHTS. The holders of shares of Common Stock shall be entitled to receive such dividends as may be declared by the Board of Directors of the Corporation out of funds legally available therefore.

               (3) RIGHTS UPON LIQUIDATION. In the event of any voluntary or involuntary liquidation, dissolution

or winding up, or any distribution of the assets, of the Corporation, the aggregate amount available for distribution to holders of shares of Common Stock (including, for purposes of this sentence, holders of shares of Excess Stock) shall be determined by applicable law. Except as provided below, each holder of shares of the Common Stock shall be entitled to receive that portion of such aggregate amount, ratably with (i) each other holder of shares of Common Stock and (ii) each holder of shares of Excess Stock, as the number of shares of the Common Stock held by such holder bears to the total number of shares of Common Stock and Excess Stock. Anything herein to the contrary notwithstanding, in no event shall the amount payable to a holder of shares with respect to Excess Stock hereunder exceed (i) the price per share such holder paid for the Common Stock in the purported Transfer (as that term is defined in paragraph A of Section 3 of this Article VI) that resulted in the Excess Stock or (ii) if the holder did not give full value for such Excess Stock (as through a gift, devise or other event or transaction), a price per share equal to the Market Price (as the term is defined in paragraph A of Section 3 of this Article VI) for the shares of the Common Stock on the date of the purported Transfer that resulted in such Excess Stock. Any amount available for distribution in excess of the foregoing limitations shall be paid ratably to holders of Common Stock and other holders of Excess Stock resulting from the exchange of Common Stock to the extent permitted by the foregoing limitations.

               (4) VOTING RIGHTS. Except as may be provided in this Charter, and subject to the express terms of any series of Preferred Stock, the holders of shares of the Common Stock shall have the exclusive right to vote on all matters (as to which a common stockholder shall be entitled to vote) at all meetings of the stockholders of the Corporation, and shall be entitled to one (1) vote for each share of the Common Stock entitled to vote at such meetings.

          B. PREFERRED STOCK

     The Preferred Stock may be issued from time to time in one or more series as authorized by the Board of Directors. Prior to the issuance of shares of each such series, the Board of Directors, by resolution, shall fix the number of shares to be included in each series, and the terms, rights, restrictions and qualifications of the shares of each series. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

(i)	The designation of the series, which may be by distinguishing number, letter or title;
(ii)	The dividend rate on the shares of the series, if any, whether any dividends shall be cumulative and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of the series;
(iii)	The redemption rights, including conditions and the price or prices, if any, for shares of the series;
(iv)	The terms and amounts of any sinking fund for the purchase or redemption of shares of the series;
(v)	The rights of the shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, and the relative rights of priority, if any, of payment of shares of the series;
(vi)	Whether the shares of the series shall be convertible into shares of any other class or series, or any other security, of the Corporation or any other corporation or other entity, and, if so, the specification of such other class or series of such other security, the conversion price or prices or dates on which such shares shall be convertible and all other terms and conditions upon which such conversion may be made;
(vii)	Restrictions on the issuance of shares of the same series or of any other class or series;
(viii)	The voting rights, if any, of the holders of shares of the series; and
(ix)	Any other relative rights, preferences and limitations on that series.

     Subject to the express provisions of any other series of Preferred Stock then outstanding, notwithstanding any

other provision of this Charter, the Board of Directors may increase or decrease (but not below the number of shares of such series then outstanding) the number of shares, or alter the designation or classify or reclassify any unissued shares of a particular series of Preferred Stock, by fixing or altering, in one or more respects, from time to time before issuing the shares, the terms, rights, restrictions and qualifications of the shares of any such series of Preferred Stock.

     SECTION 3. RESTRICTIONS ON TRANSFER; ACQUISITIONS AND REDEMPTION SHARES

          A. DEFINITIONS. For purposes of Sections 3 and 4 of this Article VI, the following terms shall have the following meanings:

“Beneficial Ownership” shall mean ownership of shares of Capital Stock by an individual who would be treated as an owner of such shares under Section 542(a)(2) of the Code, either directly or constructively through the application of Section 544, as modified by Section 856(h)(1)(B). For purposes of this definition, the term “individual” also shall include any organization, trust or other entity that is treated as an individual for purposes of Section 542(a)(2) of the Code. The terms “Beneficial Owner,” “Beneficially Own,” “Beneficially Owns” and “Beneficially Owned” shall have correlative meanings.

“Beneficiary” shall mean a beneficiary of the Trust as determined pursuant to paragraph A of Section 4 of this Article VI.

“Board of Directors” shall mean the Board of Directors of the Corporation.

“Bylaws” shall mean the Bylaws of the Corporation.

“Capital Stock” shall mean collectively the stock of the Corporation that is either Common Stock and Preferred Stock.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor thereto, as interpreted by any applicable regulations thereto and judicial decisions as in effect from time to time.

“Constructive Ownership” shall mean ownership of shares of Capital Stock by a Person who would be treated as an owner of such shares, either actually or constructively, through the application of Section 318 of the Code, as modified by Section 856(d)(5) thereof. The terms “Constructive Owner,” “Constructively Own,” “Constructively Owns” and “Constructively Owned” shall have correlative meanings.

“Market Price” on any day shall mean the average of the Closing Prices for the ten (10) consecutive Trading Days immediately preceding such day (or those days during such 10-day period for which Closing Prices are available). The “Closing Price” on any day shall mean the last sale price, regular way, on such day or if no such sale takes place on that day, the average of the closing bid and asked prices, regular way, in either case as reported on the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or the American Stock Exchange, or if the Capital Stock is not so listed or admitted to trading, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange (including the National Market System of the National Association of Securities Dealers, Inc. Automated Quotation System) on which the Capital Stock is listed or admitted to trading or, if the Capital Stock is not so listed or admitted to trading, the last quoted price, or if not quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal automated quotation system then in use or, if the Capital Stock is not so quoted by any such system, the average of the closing bid and asked prices as furnished by a professional market maker selected by the Board of Directors making a market in the Capital Stock or, if there is no such market maker or such closing prices otherwise are not available, the fair market value of the Capital Stock as of such day, as determined by the Board of Directors in its discretion.

“Ownership Limit” shall mean 9.8 percent of the Value of the outstanding Capital Stock.

“Person” shall mean an individual, corporation, partnership, estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity, or a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended; but does not include an underwriter which participated in a public offering of Capital Stock for a period of sixty (60) days following the purchase by such underwriter of Capital Stock therein, provided that the foregoing exclusion shall apply in an underwriting only if the ownership of such Capital Stock by such underwriter would not cause the Corporation to fail to qualify as a REIT by reason of being “closely held” within the meaning of Section 856(a) of the Code or otherwise cause the Corporation to fail to qualify as a REIT.

“Purported Beneficial Transferee” shall mean, with respect to any purported Transfer which results in Excess Stock, the purported beneficial transferee for whom the Purported Record Transferee would have acquired shares of Capital Stock if such Transfer had been valid under paragraph B of this Section 3.

“Purported Record Transferee” shall mean, with respect to any purported Transfer which results in Excess Stock, the record holder of the Capital Stock if such Transfer had been valid under paragraph B of this Section 3.

“REIT” shall mean a real estate investment trust under Sections 856 through 860 of the Code.

“Restriction Termination Date” shall mean the first day on which the Board of Directors and the stockholders of the Corporation determine that it is no longer in the best interests of the Corporation to attempt, or continue, to qualify as a REIT.

“Trading Day” shall mean a day on which the principal national securities exchange on which the Capital Stock is listed or admitted to trading is open for the transaction of business or, if the Capital Stock is not listed or admitted to trading, shall mean any day other than a Saturday, Sunday or other day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

“Transfer” shall mean any sale, transfer, gift, hypothecation, assignment, devise or other disposition of Capital Stock (including (i) the granting of any option (including any option to acquire any option or any series of such options) or entering into any agreement for the sale, transfer or other disposition of Capital Stock or (ii) the sale, transfer assignment or other disposition of any securities or rights convertible into or exchangeable for Capital Stock), whether voluntary or involuntary, of record, constructively or beneficially, and whether by operation of law or otherwise. The terms “Transfers” and “Transferred” shall have correlative meanings.

“Trust” shall mean the trust created pursuant to paragraph A of Section 4 of this Article VI.

“Trustee” shall mean the Corporation as trustee for the Trust, and any successor trustee appointed by the Corporation.

“Value” shall mean, as of any given date, the Market Price per share of each class of Capital Stock then outstanding, multiplied by the number of shares of such class then outstanding.

          B. OWNERSHIP AND TRANSFER LIMITATION

               (1) Notwithstanding any other provision of this Charter, except as provided in paragraph I of this Section 3 and Section 5 of this Article VI, prior to the Restriction Termination Date, no Person shall Beneficially or Constructively Own shares of Capital Stock in excess of the Ownership Limit.

               (2) Notwithstanding any other provision of this Charter, except as provided in paragraph I of this Section 3 and Section 5 of this Article VI, prior to the Restriction Termination Date, any Transfer, change in the capital

structure of the Corporation, or other purported change in Beneficial or Constructive Ownership of Capital Stock that, if effective, would result in any Person Beneficially or Constructively Owning Capital Stock in excess of the Ownership Limit shall be void ab initio as to the Transfer, change in the capital structure of the Corporation, or other purported change in Beneficial or Constructive Ownership with respect to that number of shares of Capital Stock which would otherwise be Beneficially or Constructively Owned by Such Person in excess of the Ownership Limit, and neither the Purported Beneficial Transferee nor the Purported Record Transferee shall acquire any rights in that number of shares of Capital Stock.

               (3) Notwithstanding any other provision of this Charter, except as provided in Section 5 of this Article VI, prior to the Restriction Termination Date, any Transfer, change in the capital structure of the Corporation, or other purported change in ownership of Capital Stock that, if effective, would result in the Capital Stock being owned by fewer than 100 Persons (determined without reference to any rules of attribution) shall be void ab initio as to the Transfer, change in the capital structure of the Corporation, or other purported change in ownership with respect to that number of shares which otherwise would be owned by the transferee, and the intended transferee or subsequent owner (including a Beneficial Owner) shall acquire no rights in that number of shares of Capital Stock.

               (4) Notwithstanding any other provisions of this Charter except Section 5 of this Article VI, prior to the Restriction Termination Date, any Transfer, change in the capital structure of the Corporation, or other purported change in Beneficial Ownership of shares of Capital Stock that, if effective, would cause the Corporation to fail to qualify as a REIT by reason of being “closely held” within the meaning of Section 856(h) of the Code or otherwise, directly or indirectly, would cause the Corporation to fail to qualify as a REIT shall be void ab initio as to the Transfer, change in the capital structure of the Corporation, or other purported change in Beneficial Ownership with respect to that number of shares of Capital Stock which would cause the Corporation to be “closely held” within the meaning of Section 856(h) of the Code or otherwise, directly or indirectly, would cause the Corporation to fail to qualify as a REIT, and the intended transferee or subsequent Beneficial Owner shall acquire no rights in that number of shares of Capital Stock.

          C. EXCHANGE FOR EXCESS STOCK.

               (1) If, notwithstanding the other provisions contained in this Article VI, at any time prior to the Restriction Termination Date, there is a purported Transfer, change in the capital structure of the Corporation or other purported change in the Beneficial or Constructive Ownership of Capital Stock such that any person would either Beneficially or Constructively Own Capital Stock in excess of the Ownership Limit, then, except as otherwise provided in paragraph I of this Section 3, such shares of Capital Stock (rounded up to the next whole number of shares) in excess of the Ownership Limit automatically shall be exchanged for an equal number of shares of Excess Stock having terms, rights, restrictions and qualifications identical thereto, except to the extent that this Article VI requires different terms. Such exchange shall be effective as of the close of business on the business day next preceding the date of the purported Transfer, change in capital structure or other change in purported Beneficial or Constructive Ownership of Capital Stock.

               (2) If, notwithstanding the other provisions contained in this Article VI, prior to the Restriction Termination Date, there is a purported Transfer, change in the capital structure of the Corporation or other purported change in Beneficial Ownership of Capital Stock which, if effective, would cause the Corporation to fail to qualify as a REIT by reason of being “closely held” within the meaning of Section 856(h) of the Code, or otherwise, directly or indirectly would cause the Corporation to fail to qualify as a REIT, then the shares of Capital Stock (rounded up to the next whole number of shares), being Transferred or which are otherwise affected by the change in capital structure or other purported change in Beneficial Ownership and which, in any case, would cause the Corporation to be “closely held” within the meaning of such Section 856(h) or otherwise would cause the Corporation to fail to qualify as a REIT automatically shall be exchanged for an equal number of shares of Excess Stock having terms, rights, restrictions and qualifications identical thereto, except to the extent that this Article VI requires different terms. Such exchange shall be effective as of the close of business on the business day next preceding the date of the purported Transfer, change in capital structure or other purported change in Beneficial Ownership.

          D. REMEDIES FOR BREACH. If the Board of Directors or its designee shall at any time determine in good

faith that a Transfer or change in the capital structure of the Corporation has taken place in violation of paragraph B of this Section 3 or that a Person intends to acquire or has attempted to acquire Beneficial or Constructive Ownership of any shares of Capital Stock in violation of paragraph B of this Section 3, the Board of Directors or its designee shall take such actions as it deems advisable to refuse to give effect to or to prevent such Transfer, change in capital structure of the Corporation or other attempt to acquire Beneficial or Constructive Ownership of any shares of Capital Stock, including, but not limited to, refusing to give effect thereto on the books of the Corporation or instituting injunctive proceedings with respect thereto; provided, however, that any Transfer, change in the capital structure of the Corporation, attempted Transfer or other attempt to acquire Beneficial or Constructive Ownership of any shares of Capital Stock in violation of subparagraphs (2), (3) and (4) of paragraph B of this Section 3 (as applicable) shall be void ab initio and where applicable automatically shall result in the exchange described in paragraph C of this Section 3, irrespective of any action (or inaction) by the Board of Directors or its designee.

          E. NOTICE OF RESTRICTED TRANSFER. Any Person who acquires or attempts to acquire Beneficial or Constructive Ownership of shares of Capital Stock in violation of paragraph B of this Section 3 and any Person who Beneficially or Constructively owns Excess Stock pursuant to paragraph C of this Section 3 shall immediately give written notice to the Corporation, or, in the event of a proposed or attempted Transfer or purported change in Beneficial Ownership, shall give at least fifteen (15) days prior written notice to the Corporation, of such event and shall promptly provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer, attempted Transfer or purported change in Beneficial Ownership on the Corporation’s status as a REIT.

          F. OWNERS REQUIRED TO PROVIDE INFORMATION. Prior to the Restriction Termination Date:

               (1) Every Beneficial or Constructive Owner of more than 5.0 percent, or such lower percentages as required pursuant to regulations under the Code or as may be requested by the Board of Directors, of the Value of the outstanding Capital Stock of the Corporation shall annually, no later than January 31 of each calendar year, give written notice to the Corporation stating (i) the name and address of such Beneficial or Constructive Owner; (ii) the number of shares of Capital Stock Beneficially or Constructively Owned and (iii) a description of how such shares are held. Each such Beneficial or Constructive Owner promptly shall provide to the Corporation such additional information as the Corporation, in its sole discretion, may request in order to determine the effect, if any, of such Beneficial or Constructive Ownership on the Corporation’s status as a REIT and to ensure compliance with the Ownership Limit.

               (2) Each person who is a Beneficial or Constructive Owner of Capital Stock and each Person (including the stockholder of record) who is holding Capital Stock for a Beneficial or Constructive Owner promptly shall provide to the Corporation such information as the Corporation, in its sole discretion, may request in order to determine the Corporation’s status as a REIT, to comply with the requirements of any taxing authority or other governmental agency, to determine any such compliance or to ensure compliance with the Ownership Limit.

          G. REMEDIES NOT LIMITED. Noting contained in this Article VI except Section 5 hereof shall limit scope or application of the provisions of this Section 3, the ability of the Corporation to implement or enforce compliance with the terms thereof or the authority of the Board of Directors to take any such other action or actions as it may deem necessary or advisable to protect the Corporation and the interests of its stockholders by preservation of the Corporation’s status as a REIT and to ensure compliance with the Ownership Limit, including, without limitation, refusal to give effect to a transaction on the books of the Corporation.

          H. AMBIGUITY. In the case of an ambiguity in the application of any of the provisions of this Section 3, including any definition contained in paragraph A hereof, the Board of Directors shall have the power and authority, in its sole discretion, to determine the application of the provisions of this Section 3 with respect to any situation based on the facts known to it.

          I. EXCEPTION. The Board of Directors, upon receipt of a ruling from the Internal Revenue Service, an opinion of counsel, or other evidence satisfactory to the Board of Directors, in its sole discretion, in each case to the effect that the restrictions contained in subparagraph 3 and subparagraph 4 of paragraph B of this Section 3 will not

be violated, may waive, in whole or in part, the application of the Ownership Limit with respect to any Person. In connection with any exemption, the Board of Directors may require such representations and undertakings from such Person and may impose such other conditions as the Board deems necessary, in its sole discretion, to determine the effect, if any, of the proposed Transfer on the Corporation’s status as a REIT.

          J. LIMITATIONS ON MODIFICATIONS.

               (1) The Ownership Limit may not be increased (nor may any additional ownership limitations be created) if, after giving effect to such increase or creation, the Corporation would be “closely held” within the meaning of Section 856(h) of the Code (assuming ownership of shares of Capital Stock by all Persons equal to the greater of the Beneficial Ownership of Capital Stock by such Person or the Ownership Limit,

               (2) Prior to any modification of the Ownership Limit, the Board of Directors may require such opinions of counsel, affidavits, undertakings or agreements as it may deem necessary, advisable or prudent in order to determine or ensure the Corporation’s status a REIT.

          K. LEGEND. Each certificate for shares of Capital Stock shall bear substantially the following legend:

“The securities represented by this certificate are subject to restrictions on transfer for the purpose of maintenance of the Corporation’s status as a real estate investment trust under the Internal Revenue Code of 1986, as mended (the “Code”). Except as otherwise provided pursuant to he Charter of the Corporation, no Person may (i) Beneficially or Constructively Own shares of Capital Stock in excess of 9.8 percent of the Value of the outstanding shares of Capital Stock of the Corporation; or (ii) Beneficially Own Capital Stock which could result in the Corporation being “closely held” under Section 856(h) of the Code or otherwise would cause the Corporation to fail to qualify as a REIT. Any Person who attempts or proposes to Beneficially or Constructively Own shares of Capital Stock in excess of the above limitations must notify the Corporation in writing at least fifteen (15) days prior to the proposed or attempted transfer. If the transfer restrictions referred to herein are violated, the shares of Capital Stock represented hereby automatically will be exchanged for shares of Excess Stock and will be held in trust by the Corporation, all as provided in the Charter of the Corporation. All capitalized terms in this legend have the meanings identified in the Corporation’s Charter, as the same may be amended or restated from time to time, a copy of which, including the restrictions on transfer, will be sent without charge to each stockholder who so requests.”

     SECTION 4. EXCESS STOCK.

          A. OWNERSHIP IN TRUST. Upon any purported Transfer, change in the capital structure of the Corporation or other purported change in Beneficial Ownership that results in Excess Stock pursuant to paragraph C of Section 3 of this Article VI, such Excess Stock shall be deemed to have been transferred to the Corporation as Trustee of a Trust for the benefit of such Beneficiary or Beneficiaries to whom an interest in such Excess Stock may later be transferred pursuant to paragraph E of this Section 4. Shares of Excess Stock so held in trust shall be issued and outstanding stock of the Corporation. The Purported Record Transferee shall have no rights in such Excess Stock except the right to designate a transferee of such Excess Stock upon the terms specified in paragraph E of this Section 4. The Purported Beneficial Transferee shall have no rights in such Excess Stock except as provided in paragraph C of this Section 4.

          B. DIVIDEND RIGHTS. Excess Stock shall not be entitled to any dividends. Any dividend or distribution paid prior to the discovery by the Corporation that the shares of Capital Stock have been exchanged for Excess Stock shall be repaid to the Corporation upon demand, and any dividend or distribution declared but unpaid at the time of such discovery shall be rescinded as void ab initio with respect to such shares of Excess Stock.

          C. RIGHTS UPON LIQUIDATION.

               (1) Except as provided below, in the event of any voluntary or involuntary liquidation, dissolution or winding up, or any other distribution of the assets, of the Corporation, each holder of shares of Excess Stock resulting from the exchange of Preferred Stock of any specified series shall be entitled to receive, ratably with each

other holder of shares of Excess Stock resulting from the exchange of shares of Preferred Stock of such series and each holder of shares of Preferred Stock of such series, such accrued and unpaid dividends, liquidation preferences and other preferential payments, if any, as are due to holders of shares of Preferred Stock of such series. In the event that holders of shares of any series of Preferred stock are entitled to participate in the Corporation’s distribution of its residual assets, each holder of shares of Excess Stock resulting from the exchange of Preferred Stock of any such series shall be entitled to participate, ratably with (i) each other holder of shares of Excess stock resulting from the exchange of shares of Preferred Stock of all series entitled to so participate; (ii) each holder of shares of Preferred Stock of all series entitled to so participate; and (iii) each holder of shares of Common Stock and Excess Stock resulting from the exchange of shares of Common Stock (to the extent permitted by paragraph C of Section 3 of Article VI hereof), that portion of the aggregate assets available for distribution (determined in accordance with applicable law) as the number of shares of such Excess Stock held by such holder bears to the total number of (i) outstanding shares of Excess Stock resulting from the exchange of Preferred Stock of all series entitled to so participate; (ii) outstanding shares of Preferred Stock of all series entitled to so participate; and (iii) outstanding shares of Common Stock and shares of Excess Stock resulting from the exchange of shares of Common Stock. The Corporation, as holder of the Excess Stock in trust, or, if the Corporation shall have been dissolved, any trustee appointed by the Corporation prior to its dissolution, shall distribute ratably to the Beneficiaries of the Trust, when determined, any such assets received in respect of the Excess Stock in any liquidation, dissolution or winding up, or any distribution of the assets, of the Corporation. Anything to the contrary herein notwithstanding, in no event shall the amount payable to a holder with respect to shares of Excess Stock resulting from the exchange of shares of Preferred Stock exceed (i) the price per share such holder paid for the Preferred Stock in the purported Transfer that resulted in the Excess Stock or (ii) if the holder did not give full value for such Excess Stock (as through a gift, devise or other event or transaction), a price per share equal to the Market Price for the shares of Preferred Stock on the date of the purported Transfer that resulted in such Excess Stock. Any amount available for distribution in excess of the foregoing limitations shall be paid ratably to the holders of shares of Preferred Stock and other holders of Excess Stock resulting from the exchange of Preferred Stock to the extent permitted by the foregoing limitations.

               (2) Except as provided below, in the event of any voluntary of involuntary liquidation, dissolution or winding up, or any other distribution of the assets, of the Corporation, each holder of shares of Excess Stock resulting from the exchange of Common Stock shall be entitled to receive, ratably with (i) each other holder of shares of such Excess Stock and (ii) each holder of Common Stock, that portion of the aggregate assets available for distribution to holders of shares of Common Stock (including holders of Excess Stock resulting from the exchange of Common Stock pursuant to paragraph C of Section 3 of Article VI hereof), determined in accordance with applicable law, as the number of shares of such Excess Stock held by such holder bears to the total number of shares of outstanding Common Stock and outstanding Excess Stock resulting from the exchange of Common Stock then outstanding. The Corporation, as holder of the Excess Stock in trust, or, if the Corporation shall have been dissolved, any trustee appointed by the Corporation prior to its dissolution, shall distribute ratably to the Beneficiaries of the Trust, when determined, any such assets received in respect of the Excess Stock in any liquidation, dissolution or winding up, or any distribution of the assets, of the Corporation. Anything herein to the contrary notwithstanding, in no event shall the amount payable to a holder with respect to shares of Excess Stock exceed (i) the price per share such holder paid for the Common Stock in the purported Transfer that resulted in the Excess Stock or (ii) if the holder did not give full value for such Excess Stock (as through a gift, devise or other event or transaction), a price per share equal to the Market Price for the shares of Common Stock on the date of the purported Transfer that resulted in such Excess Stock. Any amount available for distribution in excess of the foregoing limitations shall be paid ratably to the holders of shares of Common Stock and other holders of Excess Stock resulting from the exchange of Common Stock to the extent permitted by the foregoing limitations.

          D. VOTING RIGHTS. The holders of shares of Excess Stock shall not be entitled to vote on any matters (except as required by MGCL).

          E. RESTRICTIONS ON TRANSFER; DESIGNATION OF BENEFICIARY.

               (1) Excess Stock shall not be transferable. The Purported Record Transferee may freely designate a Beneficiary of its interest in the Trust (representing the number of shares of Excess Stock held by the Trust attributable to a purported Transfer that resulted in the Excess Stock, if (i) the shares of Excess Stock held in the

Trust would not be Excess Stock in the hands of such Beneficiary and (ii) the Purported Beneficial Transferee does not receive a price for designating such Beneficiary that reflects a price per share for such Excess Stock that exceeds (x) the price per share such Purported Beneficial Transferee paid for the Capital Stock in the purported Transfer that resulted in the Excess Stock or (y) if the Purported Beneficial Transferee did not give value for such shares of Excess Stock (as through a gift, device or other event or transaction), a price per share equal to the Market Price for the shares of Capital Stock on the date of the purported Transfer that resulted in the Excess Stock. Upon such transfer of an interest in the Trust, the corresponding shares of Excess Stock in the Trust automatically shall be exchanged for an equal number of shares of Capital Stock and such shares of Capital Stock shall be transferred of record to the Beneficiary of the interest in the Trust designated by the Purported Record Transferee, as described above, if such Capital Stock would not be Excess Stock in the hands of such Beneficiary. Prior to any transfer of any interest in the Trust, the Purported Record Transferee must give advance notice to the Corporation of the intended transfer and the Corporation must have waived in writing its purchase rights under paragraph F of this Section 4.

               (2) Notwithstanding the foregoing, if a Purported Beneficial Transferee receives a price for designating a Beneficiary of an interest in the Trust that exceeds the amounts allowable under subparagraph (1) of this paragraph E, such Purported Beneficial Transferee shall pay, or cause the Beneficiary of the interest in the Trust to pay, such excess to the Corporation.

               (3) If any of the transfer restrictions set forth in this paragraph E, or any application thereof, is determined to be void, invalid or unenforceable by any court having jurisdiction over the issue, the Purported Record Transferee may be deemed, at the option of the Corporation, to have acted as the agent of the Corporation in acquiring the Excess Stock as to which such restrictions would, by their terms, apply, and to hold such Excess Stock on behalf of the Corporation.

          F. PURCHASE RIGHT IN EXCESS STOCK. Shares of Excess Stock shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (i) the price per share in the transaction that created such Excess Stock (or, in the case of devise or gift, the Market Price at the time of such devise or gift) and (ii) the Market Price of the Capital Stock exchanged for such Excess Stock on the date the Corporation, or its designee, accepts such offer. The Corporation shall have the right to accept such offer for a period of ninety (90) days after the later of (i) the date of the purported Transfer, change in capital structure of the Corporation or purported change in Beneficial Ownership which resulted in such Excess Stock and (ii) the date on which the Board of Directors determines in good faith that a Transfer, change in capital structure of the Corporation or purported change in Beneficial Ownership resulting in Excess Stock has occurred, if the Corporation does not receive a notice pursuant to paragraph E of Section 3 of this Article VI, but in no event later than a permitted Transfer pursuant to and in compliance with the terms of paragraph E of this Section 4.

          G. REMEDIES NOT LIMITED. Nothing contained in this Article VI except Section 5 hereof shall limit scope or application of the provisions of this Section 4, the ability of the Corporation to implement or enforce compliance with the terms thereof or the authority of the Board of Directors to take any such other action or actions as it may deem necessary or advisable to protect the Corporation and the interests of its stockholders by preservation of the Corporation’s status as a REIT and to ensure compliance with the Ownership Limit, including, without limitation, refusal to give effect to a transaction on the books of the Corporation.

     SECTION 5. SETTLEMENTS.

          Nothing in Sections 3 and 4 of this Article VI shall preclude the settlement of any transaction with respect to the Capital Stock entered into through the facilities of the New York Stock Exchange or other national securities exchange on which the Capital Stock is listed.

SECTION 6. SEVERABILITY

          If any provision of this Article VI or any application of any such provision is determined to be void, invalid or unenforceable by any court having jurisdiction over the issue, the validity and enforceability of the remainder of this Article VI shall not be affected and other applications of such provision shall be affected only to the extent necessary

to comply with the determination of such court.

ARTICLE VII

MATTERS RELATING TO THE POWERS OF THE CORPORATION AND ITS

DIRECTORS AND STOCKHOLDERS

     The following provisions are hereby adopted for the purpose of defining, limiting and regulating the powers of the Corporation and of the directors and stockholders thereof:

     SECTION 1. MATTERS RELATING TO THE BOARD OF DIRECTORS.

          A. AUTHORITY AS TO BYLAWS. Except as otherwise provided herein, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter, amend or repeal the Bylaws of the Corporation and the Corporation may, in its Bylaws, confer powers on the Board of Directors in addition to these contained herein or conferred by applicable law.

          B. AUTHORITY AS TO STOCK ISSUANCES. The Board of Directors of the Corporation may authorize the issuance from time to time of shares of its stock of any class, whether now or hereafter authorized, or securities convertible into shares now or hereafter authorized, for such consideration as the Board of Directors may deem advisable, subject to such restrictions or limitations, if any, as may be set forth in the Charter or the Bylaws of the Corporation or in the general laws of the State of Maryland.

          C. MANNER OF ELECTION. Unless and except to the extent that the Bylaws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot.

          D. REMOVAL OF DIRECTORS. Any director may be removed from office at any time, with or without cause, by the affirmative vote of the holders of a majority of the then outstanding Capital Stock entitled to vote generally in the election of directors.

          E. PERMISSIBLE CRITERIA FOR CONSIDERATION OF BEST INTERESTS. In determining what is in the best interest of the Corporation, a director of the Corporation shall consider the interests of the stockholders of the Corporation and, in his or her discretion, may consider the interests of the Corporation’s employees, suppliers, creditors and tenants and the long-term as well as short-term interests of the Corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the Corporation.

          F. DETERMINATIONS BY BOARD. The determination as to any of the following matters, made in good faith by or pursuant to the direction of the Board of Directors consistent with the Charter of the Corporation and in the absence of actual receipt of an improper benefit in money, property or services or active and deliberate dishonesty established by a court, shall be final and conclusive and shall be binding upon the Corporation and every holder of shares of its stock: (i) the amount of the net income of the Corporation for any period and the amount of assets at any time legally available for the payment of dividends, redemption of its stock or the payment of other distributions on its stock; (ii) the amount of paid-in surplus, net assets, other surplus, annual or other net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves shall have been created shall have been paid or discharged); (iii) the fair value, or any sale, bid or asked priced to be applied in determining the fair value, of any asset owned or held by the Corporation; and (iv) any matters relating to the acquisition, holding and disposition of any assets by the Corporation.

          G. RESERVED POWERS OF BOARD. The enumeration and definition of particular powers of the Board of Directors included in this Article VII shall in no way be limited or restricted by reference to or inference from the terms of any other clause of this or any other provision of the Charter of the Corporation, or construed or deemed by inference or otherwise in any manner to exclude or limit the powers conferred upon the Board of Directors under the laws of the State of Maryland as now or hereafter in force.

          H. ALTERATION OF AUTHORITY GRANTED TO THE BOARD OF DIRECTORS. The affirmative vote of that proportion of the then-outstanding Capital Stock necessary to approve an amendment to this Charter pursuant to the MGCL and Article XI hereof shall be required to amend, repeal or adopt any provision inconsistent with Section 1 of this Article VII or with Section 3.12 of the Bylaws of the Corporation (including defined terms therein).

          I. REIT QUALIFICATION. The Board of Directors shall use its best efforts to cause the Corporation and its stockholders to qualify for U.S. federal income tax treatment in accordance with the provisions of the Code applicable to REITs. In furtherance of the foregoing, the Board of Directors shall use its best efforts to take such actions as are necessary, and may take such actions as it deems desirable (in its sole judgment and discretion) to preserve the status of the Corporation as a REIT (as that term is defined in paragraph A of Section 3 of Article VI hereof); provided, however, that in the event that the Board of Directors determines, in its sole judgment and discretion, that it is no longer in the best interests of the Corporation to qualify as a REIT, the Board of Directors shall take such actions as are required by the Code (as that term is defined in paragraph A of Section 3 of Article VI hereof), the MGCL and other applicable law, to cause the matter of termination of qualification as a REIT to be submitted to a vote of the stockholders of the Corporation pursuant to paragraph A of Section 2 of this Article VII.

     SECTION 2. MATTERS RELATING TO THE STOCKHOLDERS.

          A. TERMINATION OF REIT STATUS. Notwithstanding anything contained in this Charter to the contrary, the affirmative vote of the holders of a majority of the then-outstanding Capital Stock entitled to vote generally in the election of directors and the approval of the Board of Directors shall be required to terminate voluntarily the Corporation’s status as a REIT (as that term is defined in paragraph A of Section 3 of Article VI).

          B. NO CUMULATIVE RIGHTS. Stockholders of the Corporation shall not have cumulative voting rights in the election of directors.

          C. NO PREEMPTIVE RIGHTS. No holders of stock of the Corporation, of whatever class, shall have any preferential right of subscription to any shares of stock of any class or to any securities convertible into shares of stock of any class of the Corporation, nor any right of subscription to any thereof.

ARTICLE VIII

DIRECTORS’ LIABILITY

     To the maximum extent that Maryland law in effect from time to time permits limitation of the liability of directors and officers, no director or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. Neither the amendment nor repeal of this Article VIII, nor the adoption or amendment of any provision of the Charter or Bylaws of the Corporation inconsistent with this Article VIII, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

ARTICLE IX

INDEMNIFICATION

     Each person who is or was or who agrees to become a director or officer of the Corporation, or each person who,

while a director of the Corporation, is or was serving or who agrees to serve, at the request of the Corporation, as a director, officer, partner, joint venture, employee or trustee of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (including the heirs, executor, administrators or estate of such person), shall be indemnified by the Corporation, and shall be entitled to have paid on his behalf or be reimbursed for reasonable expenses in advance of final disposition of a proceeding, in accordance with the Bylaws of the Corporation, to the full extent permitted from time to time by the Maryland General Corporation Law as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) or any other applicable laws presently or hereafter in effect. The Corporation shall have the power, with the approval of the Board of Directors, to provide such indemnification and advancement of expenses to any employee or agent of the Corporation, in accordance with the Bylaws of the Corporation. Without limiting the generality or the effect of the foregoing, the Corporation may enter into one or more agreements with any person which provide for indemnification greater or different than that provided in this Article IX. Any amendment or repeal of this Article IX shall not adversely affect any right or protection existing hereunder immediately prior to such amendment or repeal.

ARTICLE X

APPLICATION OF CERTAIN PROVISIONS OF LAW

     SECTION 1. BUSINESS COMBINATIONS.

     Notwithstanding any other provision of this Charter or any contrary provision of law, Title 3, subtitle 6 of the Corporations and Associations Article of the Annotated Code of Maryland, as amended from time to time, or any successor statute thereto, shall not apply to any “business combination” (as defined in Section 3.601(d) of the Corporations and Associations Article of the Annotated Code of Maryland, as amended from time to time, or any successor statute thereto) involving the Corporation.

     SECTION 2. CONTROL SHARE TRANSACTIONS.

     Notwithstanding any other provision of this Charter or any contrary provision of law, Title 3, subtitle 7 of the Corporations and Associations Article of the Annotated Code of Maryland, as amended from time to time, or any successor statute thereto shall not apply to any acquisition of shares of stock of the Corporation.

ARTICLE XI

AMENDMENT

     The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in its Charter and any other provisions authorized by the laws of the State of Maryland at the time in force may be added or inserted in the manner now or hereafter prescribed herein or by applicable law, and all rights, preferences and privileges of whatsoever nature conferred upon stockholder, directors or any other persons whomsoever by and pursuant to this Charter in its present form or as hereafter amended are granted subject to the rights reserved in this Article XI; provided, however, that any amendment or repeal of Articles VIII, IX or this Article XI of this Charter shall not adversely affect any right or protection existing hereunder immediately prior to such amendment or repeal.

     IN WITNESS WHEREOF, these First Amended and Restated Articles of Incorporation are hereby executed by Gary M. Ralston, the President of the Corporation, who hereby acknowledges that the First Amended and Restated Articles of Incorporation are the act of the Corporation, and who does hereby state under the penalties of perjury that the matters and facts set forth herein with respect to authorization and approval of such Articles are true in all material respects to the best of his knowledge, information and belief.

Dated: August 10, 1998

By:	/s/ Gary M. Ralston
	Gary M. Ralston, President
ATTEST
By:	/s/ Kevin B. Habicht
	Kevin B. Habicht, Secretary

PART II

ARTICLES OF AMENDMENT

TO

FIRST AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

COMMERCIAL NET LEASE REALTY, INC.

Commercial Net Lease Realty, Inc., a Maryland corporation having its principal office in Baltimore, Maryland (hereinafter, the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: The First Amended and Restated Articles of Incorporation (the “Articles of Incorporation”) are hereby amended by renaming Article XI “AMENDMENT AND CERTAIN EXTRAORDINARY ACTIONS” and deleting Article XI in its entirety and inserting the following new Article XI:

     Section 1. Amendment

The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in its Charter and any other provisions authorized by the laws of the State of Maryland at the time in force may be added or inserted in the manner now or hereafter prescribed herein or by applicable law, and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other person whomsoever by and pursuant to this Charter in its present form or as hereafter amended are granted subject to the rights reserved in this Article XI, provided, however, that any amendment or repeal of Articles VIII, IX or this Article XI of this Charter shall not adversely affect any right or protection existing hereunder immediately prior to such amendment or repeal. Subject to the provisions of any class or series of Preferred Stock at the time outstanding, this Charter may be amended by the affirmative vote of the holders of not less than a majority of the Common Stock then outstanding and entitled to vote thereon.

     Section 2. Consolidation, Merger, Share Exchange or Transfer of Assets

Subject to the provisions of any class or series of Preferred Stock at the time outstanding, the Board of Directors shall have the power to (i) consolidate the Corporation with one or more other entities into a new entity, (ii) merge the Corporation into another entity, (iii) effect a share exchange with another domestic or foreign corporation or other entity or (iv) sell or otherwise dispose of all or substantially all of the Corporation’s assets; provided, however, that such action shall have been approved by the holders of not less than a majority of the Common Stock then outstanding and entitled to vote thereon.

SECOND: The total number of all classes of capital stock which the Corporation has authority to issue immediately prior to this amendment is two hundred ten million (210,000,000) shares consisting of (i) ninety million (90,000,000) shares of common stock, par value $0.01 (the “Common Stock”); (ii) fifteen million (15,000,000) shares of preferred stock, par value $0.01 (the “Preferred Stock”); and one hundred five million (105,000,000) shares of excess stock, par value $0.01 (the “Excess Stock”). The aggregate par value of all of the authorized shares of all classes of capital stock having a par value is $2,100,000.

THIRD: The Articles of Incorporation are hereby amended by deleting Article VI, Section 1 in its entirety and inserting the following new Article VI, Section 1:

The total number of shares of all classes of capital stock that the Corporation has authority to issue is four hundred ten million (410,000,000) shares consisting of (i) one hundred ninety million (190,000,000) shares of common stock, par value $0.01 (the “Common Stock”); (ii) fifteen million (15,000,000) shares of preferred stock, par value $0.01 (the “Preferred Stock”); and (iii) two hundred five million (205,000,000) shares of excess stock, par value $0.01 (the “Excess Stock”). The aggregate par value of all of the authorized shares of all classes of capital stock having a par value is $4,100,000.

FOURTH: The information required by subsection (b)(2)(i) of Section 2-607 of the Maryland General Corporation Law will not be changed by these Articles of Amendment; and

FIFTH: The amendments to the Articles of Incorporation as hereinabove set forth have been duly advised by the Board of Directors and approved by the stockholders of the Corporation.

IN WITNESS WHEREOF, Commercial Net Lease Realty, Inc. has caused these presents to be signed in its name and on its behalf by its Executive Vice President and Chief Operating Officer and attested by its Assistant Secretary on September 23, 2004.

THE UNDERSIGNED, Executive Vice President and Chief Operating Officer of Commercial Net Lease Realty, Inc., who executed on behalf of said corporation, the foregoing Articles of Amendment, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said corporation, the foregoing Articles of Amendment to be the corporate act of said corporation and further certifies that, to the best of his knowledge, information, and belief, the matters and facts set forth therein with respect to the approval thereof are true in all material respects, under the penalties of perjury.

ATTEST:	Commercial Net Lease Realty, Inc.
/s/ Kella W. Schaible	/s/ Julian E. Whitehurst
Kella W. Schaible	Julian E. Whitehurst
Assistant Secretary	Executive Vice President and Chief Operating officer

ARTICLES OF MERGER

MERGING

COMMERCIAL NET LEASE REALTY SERVICES, INC.

(a Maryland corporation)

INTO

COMMERCIAL NET LEASE REALTY, INC.

(a Maryland corporation)

     The undersigned corporations, in accordance with the Annotated Code of Maryland, Corporations and Associations, Section 3-101 et seq. (the “Code”) hereby adopt and execute the following Articles of Merger:

ARTICLE I

     The names of the corporations proposing to merge are: (i) Commercial Net Lease Realty Services, Inc., a corporation organized and existing under the laws of the State of Maryland (hereinafter sometimes referred to as the “Merged Corporation”), and (ii) Commercial Net Lease Realty, Inc., a corporation organized and existing under the laws of the State of Maryland (hereinafter sometimes referred to as the “Surviving Corporation”), both of which corporations agree to effect such merger (the “Merger”) upon the terms and subject to the conditions set forth herein.

     Pursuant to these Articles of Merger, Commercial Net Lease Realty Services, Inc. will merge with and into Commercial Net Lease Realty, Inc., its sole stockholder, with Commercial Net Lease Realty, Inc. being the Surviving Corporation.

ARTICLE II

     The principal office of the Merged Corporation, organized under the laws of the State of Maryland, is located in Baltimore City, State of Maryland.

     The principal office of the Surviving Corporation, organized under the laws of the State of Maryland, is located in Baltimore City, State of Maryland.

ARTICLE III

     The Merged Corporation does not own real property or any other interest in land in the State of Maryland.

ARTICLE IV

     The terms and conditions of the transaction set forth in these Articles of Merger (“Articles”) were advised, authorized, and approved by each corporation party to the Articles in the manner and by the vote required by its charter and the laws of the State of Maryland.

     (i) The Merger was duly advised, authorized and approved by the Board of Directors of the Merged Corporation by a Unanimous Written Consent of the Board of Directors of the Merged Corporation dated October 31, 2005, declaring that the Merger herein proposed is advisable and in the best interests of the Merged Corporation substantially upon the terms and conditions set forth in these Articles. Pursuant to Section 3-106(c)(1) of the Code, a meeting of the sole shareholder of the Merged Corporation was not necessary.

     (ii) The Merger was duly advised, authorized and approved by the Board of Directors of the Surviving Corporation by a Unanimous Written Consent of the Board of Directors of the Surviving Corporation dated October 31, 2005, declaring that the Merger herein proposed is advisable and in the best interests of the Surviving Corporation substantially upon the terms and conditions set forth in these Articles.

ARTICLE V

     The total number of shares of stock that the Merged Corporation has authority to issue is 40,000 shares consisting of (i) 30,000 shares of Common Stock, with a par value $0.01 per share, 29,500 shares of which are designated as Non-Voting Common Stock and 500 shares of which are designated as Voting Common Stock; and (ii) 10,000 shares of Preferred Stock, with a par value of $0.01 per share. The aggregate par value of all such shares is Four Hundred Dollars ($400.00).

     The total number of shares of stock that the Surviving Corporation has authority to issue is 410,000,000 shares consisting of (i) 190,000,000 shares of Common Stock, with a par value of $0.01 per share; (ii) 15,000,000 shares of Preferred Stock, with a par value of $0.01 per share; and (iii) 205,000,000 shares of Excess Stock, with a par value of $0.01 per share. The aggregate par value of all such shares is Four Million One Hundred Thousand Dollars ($4,100,000.00).

  ARTICLE VI

     The Merger shall not effect any amendment changing the foregoing information in this Article VI with respect to the Surviving Corporation.

ARTICLE VII

     The manner and basis of converting or exchanging the shares of the Merged Corporation into shares of the Surviving Corporation shall be as follows: upon the effective time of the Merger, each share of stock of the Merged Corporation held by Commercial Net Lease Realty, Inc., the sole stockholder of the Merged Corporation, shall cease to be outstanding, shall be cancelled and retired and shall cease to exist.

ARTICLE VIII

     The Merger shall be effective as of 9:05 a.m. EST on November 1, 2005.

IN WITNESS WHEREOF, these Articles of Merger are hereby signed for and on behalf of the Merged Corporation by its Executive Vice President, who does hereby acknowledge that said Articles of Merger are the corporate act of said corporation, and who does hereby state under the penalties for perjury that the matters and facts stated therein with respect to the authorization and approval of said merger are true in all material respects to the best of his knowledge, information, and belief, and attested to by the Secretary.

		COMMERCIAL NET LEASE REALTY SERVICES, INC., a Maryland corporation
		By:	/s/ Kevin B. Habicht
		Name:	Kevin B. Habicht
		Title:	Executive Vice President
ATTEST:
/s/ Julian E. Whitehurst
Name:	Julian E. Whitehurst
Title:	Secretary
Dated: October 31, 2005

IN WITNESS WHEREOF, these Articles of Merger are hereby signed for and on behalf of the Surviving Corporation by its Executive Vice President, who does hereby acknowledge that said Articles of Merger are the corporate act of said corporation, and who does hereby state under the penalties for perjury that the matters and facts stated therein with respect to the authorization and approval of said merger are true in all material respects to the best of his knowledge, information, and belief, and attested to by the Assistant Secretary.

		COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation
		By:	/s/ Julian E. Whitehurst
		Name:	Julian E. Whitehurst
		Title:	Executive Vice President
ATTEST:
/s/ Kevin B. Habicht
Name:	Kevin B. Habicht
Title:	Assistant Secretary
Dated: October 31, 2005

ARTICLES OF AMENDMENT

TO

FIRST AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

COMMERCIAL NET LEASE REALTY, INC.

     Commercial Net Lease Realty, Inc., a Maryland corporation having its principal office in Baltimore, Maryland (hereinafter, the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: The First Amended and Restated Articles of Incorporation (the “Articles of Incorporation”) are hereby amended by deleting Article I in its entirety and inserting the following new Article I:

The name of the Corporation is National Retail Properties, Inc.

SECOND: The information required by subsection (b)(2)(i) of Section 2-607 of the Maryland General Corporation Law will not be changed by these Articles of Amendment; and

THIRD: The amendment to the Articles of Incorporation as hereinabove set forth have been approved by the Board of Directors of the Corporation and is limited to the change expressly authorized by Section 2-605 of the Maryland General Corporation Law to be made without action by the stockholders.

IN WITNESS WHEREOF, Commercial Net Lease Realty, Inc. has caused these presents to be signed in its name and on its behalf by its Executive Vice President and Chief Operating Officer and attested by its Assistant Secretary on May 1, 2006.

THE UNDERSIGNED, Executive Vice President and Chief Operating Officer of Commercial Net Lease Realty, Inc., who executed on behalf of said corporation, the foregoing Articles of Amendment, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said corporation and further certifies that, to the best of his knowledge, information, and belief, the matters and facts set forth therein with respect to the approval thereof are true in all material respects, under the penalties of perjury.

ATTEST:	Commercial Net Lease Realty, Inc.
/s/ Kella W. Schaible	/s/ Julian E. Whitehurst
Kella W. Schaible	Julian E. Whitehurst
Assistant Secretary	Executive Vice President and Chief Operating Officer

ARTICLES OF AMENDMENT

TO

FIRST AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

NATIONAL RETAIL PROPERTIES, INC.

National Retail Properties, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of the State of Maryland that:

FIRST: The total number of shares of all classes of capital stock that the Corporation has authority to issue is four hundred ten million (410,000,000) shares consisting of (i) one hundred ninety million (190,000,000) shares of common stock, par value $0.01 (the “Common Stock”); (ii) fifteen million (15,000,000) shares of preferred stock, par value $0.01 (the “Preferred Stock”); and (iii) two hundred five million (205,000,000) shares of excess stock, par value $0.01 (the “Excess Stock”). The aggregate par value of all of the authorized shares of all classes of capital stock having a par value is $4,100,000.

SECOND: The First Amended and Restated Articles of Incorporation, as amended (the “Articles of Incorporation”), are hereby amended by deleting Article VI, Section 1 in its entirety and inserting the following new Article VI, Section 1:

The total number of shares of all classes of capital stock that the Corporation has authority to issue is seven hundred eighty million (780,000,000) shares consisting of (i) three hundred seventy five million (375,000,000) shares of common stock, par value $0.01 per share (the “Common Stock”); (ii) fifteen million (15,000,000) shares of preferred stock, par value $0.01 per share (the “Preferred Stock”); and (iii) three hundred ninety million (390,000,000) shares of excess stock, par value $0.01 per share (the “Excess Stock”). The aggregate par value of all of the authorized shares of all classes of capital stock having a par value is $7,800,000.

THIRD: The information required by subsection (b)(2)(i) of Section 2-607 of the Maryland General Corporation Law will not be changed by these Articles of Amendment; and

FOURTH: The amendments to the Articles of Incorporation as hereinabove set forth have been advised by the Board of Directors of the Corporation and approved by the stockholders of the Corporation.

IN WITNESS WHEREOF,National Retail Properties, Inc. has caused these Articles of Amendment to be signed in its name and on its behalf by Kevin B. Habicht, its Executive Vice President, Chief Financial Officer, Assistant Secretary and Treasurer, and attested by Christopher P. Tessitore, its Executive Vice President, General Counsel and Secretary, on May 31, 2012.

THE UNDERSIGNED, Executive Vice President, Chief Financial Officer, Assistant Secretary and Treasurer of National Retail Properties, Inc., who executed in the name and on behalf of said corporation, the foregoing Articles of Amendment, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said corporation, the foregoing Articles of Amendment to be the corporate act of said corporation and further certifies that, to the best of his knowledge, information, and belief, the matters and facts set forth therein with respect to the approval thereof are true in all material respects, under the penalties of perjury.

Attest:	NATIONAL RETAIL PROPERTIES, INC.
/s/ Christopher P. Tessitore	/s/ Kevin B. Habicht
Christopher P. Tessitore Executive Vice President, General Counsel and Secretary	Kevin B. Habicht Executive Vice President, Chief Financial Officer, Assistant Secretary and Treasurer

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Craig Macnab, certify that:

1. I have reviewed this report on Form 10-Q of National Retail Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 3, 2012		/s/ Craig Macnab
Date	Name:	Craig Macnab
	Title:	Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Kevin B. Habicht, certify that:

1. I have reviewed this report on Form 10-Q of National Retail Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 3, 2012		/s/ Kevin B. Habicht
Date	Name:	Kevin B. Habicht
	Title:	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Craig Macnab, Chairman of the Board and Chief Executive Officer, certifies, to the best of his knowledge, that (1) this Quarterly Report of National Retail Properties, Inc. (“NNN”) on Form 10-Q for the period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (this “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and (2) the information contained in this Report fairly presents, in all material respects, the financial condition of NNN as of June 30, 2012 and December 31, 2011 and its results of operations for the quarters and six months ended June 30, 2012 and 2011.

August 3, 2012		/s/ Craig Macnab
Date	Name:	Craig Macnab
	Title:	Chairman of the Board and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to NNN and will be retained by NNN and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Kevin B. Habicht, Chief Financial Officer, certifies, to the best of his knowledge, that (1) this Annual Report of National Retail Properties, Inc. (“NNN”) on Form 10-K for the period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (this “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and (2) the information contained in this Report fairly presents, in all material respects, the financial condition of NNN as of June 30, 2012 and December 31, 2011 and its results of operations quarters and six months ended June 30, 2012 and 2011.

August 3, 2012		/s/ Kevin B. Habicht
Date	Name:	Kevin B. Habicht
	Title:	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to NNN and will be retained by NNN and furnished to the Securities and Exchange Commission or its staff upon request.

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Fair Value Measurements (Reconciliation Of Residuals) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period			$ 15,299
Total gains (losses) - realized/unrealized [Abstract]
Included in earnings			(2,718)
Included in other comprehensive income			213
Interest income on Residuals	716	777	1,471	1,544
Cash received from Residuals			(1,870)
Purchases, sales, issuances, and settlements, net			0
Transfers in and/or out of Level 3			0
Balance at end of period	12,395		12,395
Changes in gain (losses) included in earnings attributable to a change in unrealized gains (losses) relating to assets still held at the end of period			$ (130)

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Line Of Credit Payable (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	May 31, 2011
Line of Credit Facility [Abstract]
Revolving credit facility original borrowing capacity			$ 400,000
Revolving credit facility borrowing capacity			450,000
Revolving credit facility weighted average outstanding balance	52,946
Revolving credit facility weighted average interest rate	1.80%
Maturity date	May 2015
Option to extend maturity date	May 2016.
Debt instrument, description of variable rate basis	LIBOR plus 150
Option to increase facility size	650,000
Line of credit payable	142,600	65,600
Line of credit facility available for future borrowings	307,400
Line of credit facility undrawn letters of credit	$ 3,800

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Reconciliation Of Residuals

The table below presents a reconciliation of the Residuals (dollars in thousands):

	Six Months Ended June 30, 2012
Balance at beginning of period	$	15,299
Total gains (losses) – realized/unrealized:
Included in earnings	(2,718		)
Included in other comprehensive income	213
Interest income on Residuals	1,471
Cash received from Residuals	(1,870		)
Purchases, sales, issuances and settlements, net	—
Transfers in and/or out of Level 3	—
Balance at end of period	$	12,395
Changes in gains (losses) included in earnings attributable to a change in unrealized gains (losses) relating to     assets still held at the end of period	$	(130	)

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Derivatives (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012 derivatives	Jun. 30, 2011
Schedule of Trading Securities and Other Trading Assets [Line Items]
Fair value of interest rate hedges recognized in other comprehensive income	$ 5,811
Interest rate hedges gain reclassified as and increase and as a (reduction) to interest expense	114	(85)
Interest rate hedges gain (loss) to be reclassified into interest expense over next 12 months	240
Number of interest rate derivatives held	0
Treasury Locks [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Number of interest rate derivatives terminated		2
Notional amount of interest rate hedges terminated		150,000
Treasury locks designated as cash flow hedges, fair value		5,300
Treasury locks designated as cash flow hedges, other comprehensive income		$ 5,218

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Commercial Mortgage Residual Interests

6 Months Ended

Jun. 30, 2012

Commercial Mortgage Residual Interests [Abstract]

Commercial Mortgage Residual Interests

Commercial Mortgage Residual Interests:

In 2010, NNN acquired the 21.1% non-controlling interest in its majority owned and controlled subsidiary, Orange Avenue Mortgage Investments, Inc. (“OAMI”), for $1,603,000, and OAMI became a wholly owned subsidiary of NNN. NNN accounted for the transaction as an equity transaction in accordance with the FASB guidance on consolidation. OAMI holds the residual interests (“Residuals”) from seven commercial mortgage securitizations. Each of the Residuals is recorded at fair value based upon an independent valuation. Unrealized gains and losses are reported as other comprehensive income in stockholders' equity and other than temporary losses as a result of a change in the timing, or amount of estimated cash flows are recorded as an other than temporary valuation impairment.

Due to the expected timing of future cash flows relating to the Residuals, the independent valuation adjusted certain of the valuation assumptions. The following table summarizes the key assumptions used in determining the value of the Residuals as of:

	June 30, 2012		December 31, 2011
Discount rate	25	%	25	%
Average life equivalent CPR (1) speeds range	0.80% to 20.42% CPR		2.18% to 18.57% CPR
Foreclosures:
Frequency curve default model	0.1% - 3.9% range		0.2% - 4.7% range
Loss severity of loans in foreclosure	20	%	20	%
Yield:
LIBOR	Forward 3-month curve		Forward 3-month curve
Prime	Forward curve		Forward curve

⁽¹⁾ Conditional prepayment rate.

The following table summarizes the recognition of unrealized gains and/or losses recorded as other comprehensive income as well as other than temporary valuation impairments recorded in condensed consolidated statements of earnings (dollars in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Unrealized gains	$	213	$	539	$	213	$	599
Other than temporary valuation impairment	2,718		267		2,718		396

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Real Estate - Portfolio (Classification Of Investment Property Leases) (Details)	6 Months Ended
	Jun. 30, 2012
Property Subject to or Available for Operating Lease [Line Items]
Weighted average remaining lease term (in years)	12 years
Operating [Member]
Property Subject to or Available for Operating Lease [Line Items]
Number of properties leased-operating	1,493
Direct Financing [Member]
Property Subject to or Available for Operating Lease [Line Items]
Number of properties leased-direct financing	14
Building Portion - Direct Financing / Land Portion - Operating [Member]
Property Subject to or Available for Operating Lease [Line Items]
Number of properties leased-building portion-direct financing land portion-operating	5

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Organization And Summary Of Significant Accounting Policies (Computation Of Basic And Diluted Earnings Per Share) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012		Jun. 30, 2011
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
Net earnings attributable to NNN	$ 33,505	$ 21,303	$ 63,337		$ 42,123
Less: Excess of redemption value over carrying value of preferred shares redeemed	0	0	(3,098)		0
Net earnings available to NNN's common stockholders	27,579	19,607	52,334		38,731
Less: Earnings attributable to unvested restricted shares	(180)	(152)	(312)		(286)
Net earnings used in basic earnings per share	27,399	19,455	52,022		38,445
Reallocated undistributed income (loss)	0	0	0		0
Net earnings used in diluted earnings per share	27,399	19,455	52,022		38,445
Weighted average number of shares outstanding	107,006,399	85,309,082	106,321,014		84,635,929
Less: Unvested restricted stock	(696,804)	(647,468)	(631,329)		(612,375)
Less: Contingent shares	(317,581)	(251,826)	(272,090)		(251,826)
Weighted average number of shares outstanding used in basic earnings per share	105,992,014	84,409,788	105,417,595		83,771,728
Contingent shares	0	0	12,735		0
Convertible debt	1,310,445	160,006	1,259,319		346,699
Common stock options	1,419	3,162	1,855		3,305
Directors' deferred fee plan	155,115	153,012	152,576		149,620
Weighted average number of shares outstanding used in diluted earnings per share	107,458,993	84,725,968	106,844,080		84,271,352
Series C Depositary Share [Member]
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
Less: Series C preferred stock dividends and Series D preferred stock dividends	0	(1,696)	(1,979)	[1]	(3,392)	[1]
Series D Depositary Share [Member]
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
Less: Series C preferred stock dividends and Series D preferred stock dividends	$ (5,926)	$ 0	$ (5,926)	[2]	$ 0	[2]

[1] The Series C preferred stock was redeemed in March 2012. The dividends paid during the quarter ended March 31, 2012 include accumulated and unpaid dividends through the redemption date.

[2] The Series D preferred stock dividends paid during the quarter ended June 30, 2012 include accumulated and unpaid dividends from the issuance date through the declaration date. The Series D preferred stock has no maturity date and will remain outstanding unless redeemed.

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Real Estate - Portfolio (Summary Of Real Estate Subject To Operating Leases) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Property Subject to or Available for Operating Lease [Line Items]
Real estate dubject to operating leases, gross	$ 3,700,544	$ 3,434,932
Less accumulated depreciation and amortization	(302,435)	(270,023)
Real estate subject to operating leases before work in process	3,398,109	3,164,909
Real estate subject to operating leases, net	3,485,819	3,225,119
Land And Improvements [Member]
Property Subject to or Available for Operating Lease [Line Items]
Real estate subject to operating leases, gross	1,390,175	1,315,339
Buildings And Improvements [Member]
Property Subject to or Available for Operating Lease [Line Items]
Buildings and improvements	2,309,079	2,118,303
Leasehold Interests [Member]
Property Subject to or Available for Operating Lease [Line Items]
Leasehold interests	1,290	1,290
Work In Progress [Member]
Property Subject to or Available for Operating Lease [Line Items]
Work in progess	$ 87,710	$ 60,210

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Real Estate - Portfolio (Remaining Funding Commitments) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012 properties
Real Estate Investments [Abstract]
Number of Properties with Funding Commitments	54
Total Commitment	$ 167,243	[1]
Amount Funded	127,693
Remaining Commitment	$ 39,550

[1] Includes land and construction costs.

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Real Estate - Portfolio

6 Months Ended

Jun. 30, 2012

Real Estate Investments [Abstract]

Real Estate - Investment Portfolio

Real Estate – Portfolio:

Leases – The following outlines key information for NNN’s leases:

	June 30, 2012
Lease classification:
Operating	1,493
Direct financing	14
Building portion – direct financing / land portion – operating	5
Weighted average remaining lease term	12 Years

The leases generally provide for limited increases in rent as a result of fixed increases, increases in the consumer price index, and/or increases in the tenant’s sales volume. Generally, the tenant is also required to pay all property taxes and assessments, substantially maintain the interior and exterior of the property and carry property and liability insurance coverage. Certain of NNN’s Properties are subject to leases under which NNN retains responsibility for specific costs and expenses of the property. Generally, the leases of the Properties provide the tenant with one or more multi-year renewal options subject to generally the same terms and conditions, including rent increases, consistent with the initial lease term.

Real Estate Portfolio – Accounted for Using the Operating Method – Real estate subject to operating leases consisted of the following as of (dollars in thousands):

	June 30, 2012			December 31, 2011
Land and improvements	$	1,390,175		$	1,315,339
Buildings and improvements	2,309,079			2,118,303
Leasehold interests	1,290			1,290
	3,700,544			3,434,932
Less accumulated depreciation and amortization	(302,435		)	(270,023		)
	3,398,109			3,164,909
Work in progress	87,710			60,210
	$	3,485,819		$	3,225,119

In connection with the improvements of leased Properties, NNN has the following funding commitments (dollars in thousands):

	June 30, 2012
	# of Properties	Total Commitment(1)		Amount Funded		Remaining Commitment
Real Estate Portfolio	54	$	167,243	$	127,693	$	39,550

⁽¹⁾ Includes land and construction costs.

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Commercial Mortgage Residual Interests Commercial Mortgage Residual Interests (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 securitizations		Jun. 30, 2011	Dec. 31, 2011		Dec. 31, 2010
Mortgage Loans on Real Estate [Line Items]
Equity method investment ownership percentage acquired								21.10%
Business acquisition, cost of acquired entity, purchase Price								$ 1,603
Number of securitizations			7
Discount rate			25.00%			25.00%
Loss severity of loans in foreclosure			20.00%			20.00%
LIBOR			Forward 3-month curve			Forward 3-month curve
Prime			Forward curve			Forward curve
Unrealized gains	213	539	213		599
Other than temporary valuation impairment	$ 2,718	$ 267	$ 2,718		$ 396
Maximum [Member]
Mortgage Loans on Real Estate [Line Items]
Average life equivalent CPR speeds range			20.42%	[1]		18.57%	[1]
Foreclosures frequency curve default model			3.90%			4.70%
Minimum [Member]
Mortgage Loans on Real Estate [Line Items]
Average life equivalent CPR speeds range			0.80%	[1]		2.18%	[1]
Foreclosures frequency curve default model			0.10%			0.20%

[1] Conditional prepayment rate.

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Fair Value Of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Financial Instruments, Owned, at Fair Value [Abstract]
Fair value of notes payable and convertible notes payable	$ 1,347,658	$ 1,362,922

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
ASSETS
Accounted for using the operating method, net of accumulated depreciation and amortization	$ 3,485,819	$ 3,225,119
Accounted for using the direct financing method	24,954	26,518
Real estate, held for sale	40,351	36,105
Investment in unconsolidated affiliate	4,283	4,358
Mortgages, notes and accrued interest receivable, net of allowance	36,740	33,428
Commercial mortgage residual interests	12,395	15,299
Cash and cash equivalents	2,907	2,082
Receivables, net of allowance of $1,113 and $1,403, respectively	1,456	2,149
Accrued rental income, net of allowance of $3,086 and $4,870, respectively	25,330	25,187
Debt costs, net of accumulated amortization of $16,986 and $15,332, respectively	9,148	10,802
Other assets	60,607	53,382
Total assets	3,703,990	3,434,429
LIABILITIES AND EQUITY
Line of credit payable	142,600	65,600
Mortgages payable, including unamortized premium of $216 and $0, respectively	29,341	23,171
Notes payable - convertible, net of unamortized discount of $4,256 and $6,363, respectively	357,479	355,371
Notes payable, net of unamortized discount of $4,763 and $5,033, respectively	845,237	894,967
Accrued interest payable	14,440	15,108
Other liabilities	87,483	76,336
Total liabilities	1,476,580	1,430,553
Stockholders' equity:
Common stock, $0.01 par value. Authorized 190,000,000 shares; 107,449,071 and 104,754,859 shares issued and outstanding, respectively	1,076	1,049
Excess stock, $0.01 par value. Authorized 205,000,000 shares; none issued or outstanding	0	0
Capital in excess of par value	2,015,121	1,958,225
Retained earnings (loss)	(74,123)	(44,946)
Accumulated other comprehensive income (loss)	(3,504)	(3,830)
Total stockholders' equity of NNN	2,226,070	2,002,498
Noncontrolling interests	1,340	1,378
Total equity	2,227,410	2,003,876
Total liabilities and equity	3,703,990	3,434,429
Series D Depositary Share [Member]
Stockholders' equity:
Series D, 11,500,000 depositary shares issued and outstanding, at stated liquidation value of $25 per share	287,500	0
Series C, 3,680,000 depositary shares issued and outstanding, at stated liquidation value of $25 per share	287,500	0
Series C Depositary Share [Member]
Stockholders' equity:
Series D, 11,500,000 depositary shares issued and outstanding, at stated liquidation value of $25 per share	0	92,000
Series C, 3,680,000 depositary shares issued and outstanding, at stated liquidation value of $25 per share	$ 0	$ 92,000

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Condensed Consolidated Statements Of Cash Flows (Parenthetical)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
shares of restricted and unrestricted common stock, pursuant to NNN's performance incentive plan	396,577	139,351
shares of common stock to directors pursuant to NNN's performance incentive plan	8,389	4,623
shares of common stock, pursuant to NNN's Deferred Director Fee Plan	10,247	13,879
shares of restricted stock surrendered	4,178	4,494

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Income Taxes (Details)	3 Months Ended
	Jun. 30, 2012
Income Tax Disclosure [Abstract]
Distribution of taxable income requirement	90.00%

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Commercial Mortgage Residual Interests Commercial Mortgage Residual Interests (Tables)

6 Months Ended

Jun. 30, 2012

Commercial Mortgage Residual Interests [Abstract]

Retained Interest, Fair Value Disclosure, Significant Assumptions [Table Text Block]

The following table summarizes the key assumptions used in determining the value of the Residuals as of:

	June 30, 2012		December 31, 2011
Discount rate	25	%	25	%
Average life equivalent CPR (1) speeds range	0.80% to 20.42% CPR		2.18% to 18.57% CPR
Foreclosures:
Frequency curve default model	0.1% - 3.9% range		0.2% - 4.7% range
Loss severity of loans in foreclosure	20	%	20	%
Yield:
LIBOR	Forward 3-month curve		Forward 3-month curve
Prime	Forward curve		Forward curve

⁽¹⁾ Conditional prepayment rate.

Schedule Of Amounts Recognized As Unrealized Gains And Or Losses Recorded As Other Comprehensive Income And Other Than Temporary Valuation Impairments Recorded In Earnings [Table Text Block]

The following table summarizes the recognition of unrealized gains and/or losses recorded as other comprehensive income as well as other than temporary valuation impairments recorded in condensed consolidated statements of earnings (dollars in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Unrealized gains	$	213	$	539	$	213	$	599
Other than temporary valuation impairment	2,718		267		2,718		396

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Earnings From Discontinued Operations (Summary Of Earnings From Discontinued Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Earned income from direct financing leases	$ 618	$ 693	$ 1,246	$ 1,433
Interest and other income from real estate transactions	764	543	1,470	1,164
Total revenues	82,751	61,865	161,350	123,336
General and administrative	7,024	6,568	14,627	13,226
Real estate	4,025	3,919	8,597	7,573
Depreciation and amortization	19,032	13,765	37,140	27,184
Total operating expenses	32,799	24,519	63,082	48,379
Interest expense	19,394	17,512	39,039	35,174
Total other expenses (revenues)	(19,033)	(17,229)	(38,320)	(34,549)
Earnings before gain on disposition of real estate and income tax expense	31,222	20,807	60,413	41,096
Income tax expense	(140)	(210)	(236)	(191)
Earnings from discontinued operations attributable to NNN	2,239	568	2,817	1,005
Earnings attributable to noncontrolling interests	(29)	(34)	(38)	0
Segment, Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Rental income from operating leases	687	1,273	1,571	2,163
Earned income from direct financing leases	0	20	6	40
Interest and other income from real estate transactions	110	165	262	359
Total revenues	797	1,458	1,839	2,562
General and administrative	4	3	7	7
Real estate	192	346	478	621
Depreciation and amortization	35	132	95	263
Impairment losses and other charges	345	0	380	0
Total operating expenses	576	481	960	891
Interest expense	360	340	717	681
Total other expenses (revenues)	360	340	717	681
Earnings before gain on disposition of real estate and income tax expense	(139)	637	162	990
Gain on disposition of real estate	2,438	1	2,752	132
Income tax expense	(60)	(70)	(97)	(117)
Earnings attributable to noncontrolling interests	(5)	(33)	(17)	(93)
Earnings from discontinued operations attributable to NNN	$ 2,234	$ 535	$ 2,800	$ 912

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Earnings From Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2012

Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

The following is a summary of the earnings from discontinued operations (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenues:
Rental income from operating leases	$	687		$	1,273		$	1,571		$	2,163
Earned income from direct financing leases	—			20			6			40
Interest and other income from real estate transactions	110			165			262			359
	797			1,458			1,839			2,562
Operating expenses:
General and administrative	4			3			7			7
Real estate	192			346			478			621
Depreciation and amortization	35			132			95			263
Impairment losses and other charges	345			—			380			—
	576			481			960			891
Other expenses (revenues):
Interest expense	360			340			717			681
	360			340			717			681
Earnings before gain on disposition of real estate and income tax    expense	(139		)	637			162			990
Gain on disposition of real estate	2,438			1			2,752			132
Income tax expense	(60		)	(70		)	(97		)	(117		)
Earnings from discontinued operations attributable to NNN	2,239			568			2,817			1,005
Earnings attributable to noncontrolling interests	(5		)	(33		)	(17		)	(93		)
Earnings from discontinued operations attributable to NNN	$	2,234		$	535		$	2,800		$	912

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Organization And Summary Of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Organization And Summary Of Significant Accounting Policies

Organization and Summary of Significant Accounting Policies:

Organization and Nature of Business – National Retail Properties, Inc., a Maryland corporation, is a fully integrated real estate investment trust (“REIT”) formed in 1984. The term “NNN” or the “Company” refers to National Retail Properties, Inc. and all of its consolidated subsidiaries. NNN has elected to treat certain subsidiaries as taxable REIT subsidiaries. These taxable subsidiaries and their majority owned and controlled subsidiaries are collectively referred to as the “TRS.”

NNN's assets include: real estate assets, mortgages and notes receivable, and commercial mortgage residual interests. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and primarily held for investment (“Properties” or “Property Portfolio”).

	June 30, 2012
Property Portfolio:
Total properties	1,506
Gross leasable area (square feet)	17,798,000
States	47

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. The unaudited condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. Operating results for the quarter and six months ended June 30, 2012, may not be indicative of the results that may be expected for the year ending December 31, 2012. Amounts as of December 31, 2011, included in the condensed consolidated financial statements have been derived from the audited consolidated financial statements as of that date. The unaudited condensed consolidated financial statements, included herein, should be read in conjunction with the consolidated financial statements and notes thereto as well as Management's Discussion and Analysis of Financial Condition and Results of Operations in NNN's Form 10-K for the year ended December 31, 2011.

Principles of Consolidation – NNN’s condensed consolidated financial statements include the accounts of each of the respective majority owned and controlled affiliates, including transactions whereby NNN has been determined to be the primary beneficiary in accordance with the Financial Accounting Standards Board (“FASB”) guidance included in Consolidation. All significant intercompany account balances and transactions have been eliminated. NNN applies the equity method of accounting to investments in partnerships and joint ventures that are not subject to control by NNN due to the significance of rights held by other parties.

Real Estate Portfolio – NNN records the acquisition of real estate which is not subject to a lease at cost, including acquisition and closing costs. The cost of properties developed by NNN includes direct and indirect costs of construction, property taxes, interest and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. During the quarter and six months ended June 30, 2012, NNN recorded $436,000 and $868,000, respectively, in capitalized interest and recorded $247,000 and $569,000 in capitalized interest during the same periods in 2011, respectively.

Purchase Accounting for Acquisition of Real Estate Subject to a Lease – In accordance with the FASB guidance on business combinations, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases and value of tenant relationships, based in each case on their relative fair values. Acquisition costs incurred in connection with a business combination are expensed when incurred.

The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and tenant improvements based on the determination of the fair values of these assets. The as-if-vacant fair value of a property is provided to management by a qualified appraiser.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease, including the probability of renewal periods. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant would renew the option whereby the Company would amortize the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the property as-if-vacant, determined as set forth above. The value of in-place leases exclusive of the value of above-market and below-market in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

Intangible assets and liabilities consisted of the following as of (in thousands):

	June 30, 2012		December 31, 2011
Intangible lease assets (included in Other assets):
Value of above market in-place leases, net	$	6,999	$	5,907
Value of in-place leases, net	38,342		31,970
Intangible lease liabilities (included in Other liabilities):
Value of below market in-place leases, net	25,377		23,367

Investment in an Unconsolidated Affiliate – NNN accounts for its investment in an unconsolidated affiliate under the equity method of accounting. In September 2007, NNN entered into a joint venture, NNN Retail Properties Fund I LLC (the “NNN Crow JV”) with an affiliate of Crow Holdings Realty Partners IV, L.P., which is accounted for under the equity method of accounting.

Cash and Cash Equivalents - NNN considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash and money market accounts. Cash equivalents are stated at cost plus accrued interest, which approximates fair value.

Cash accounts maintained on behalf of NNN in demand deposits at commercial banks and money market funds may exceed federally insured levels; however, NNN has not experienced any losses in such accounts.

Valuation of Receivables – NNN estimates the collectibility of its accounts receivable related to rents, expense reimbursements and other revenues. NNN analyzes accounts receivable and historical bad debt levels, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims.

Earnings Per Share – Earnings per share have been computed pursuant to the FASB guidance included in Earnings Per Share. Effective January 1, 2009, the guidance requires classification of the Company’s unvested restricted share units which contain rights to receive nonforfeitable dividends, as participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period.

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per common share using the two-class method (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Basic and Diluted Earnings:
Net earnings attributable to NNN	$	33,505		$	21,303		$	63,337		$	42,123
Less: Series C preferred stock dividends	—			(1,696		)	(1,979		)	(3,392		)
Less: Series D preferred stock dividends	(5,926		)	—			(5,926		)	—
Less: Excess of redemption value over carrying value of preferred shares redeemed	—			—			(3,098		)	—
Net earnings available to NNN’s common stockholders	27,579			19,607			52,334			38,731
Less: Earnings attributable to unvested restricted shares	(180		)	(152		)	(312		)	(286		)
Net earnings used in basic earnings per share	27,399			19,455			52,022			38,445
Reallocated undistributed income (loss)	—			—			—			—
Net earnings used in diluted earnings per share	$	27,399		$	19,455		$	52,022		$	38,445
Basic and Diluted Weighted Average Shares Outstanding:
Weighted average number of shares outstanding	107,006,399			85,309,082			106,321,014			84,635,929
Less: Unvested restricted stock	(696,804		)	(647,468		)	(631,329		)	(612,375		)
Less: Contingent shares	(317,581		)	(251,826		)	(272,090		)	(251,826		)
Weighted average number of shares outstanding used in basic earnings    per share	105,992,014			84,409,788			105,417,595			83,771,728
Effects of dilutive securities:
Contingent shares	—			—			12,735			—
Convertible debt	1,310,445			160,006			1,259,319			346,699
Common stock options	1,419			3,162			1,855			3,305
Directors’ deferred fee plan	155,115			153,012			152,576			149,620
Weighted average number of shares outstanding used in diluted earnings    per share	107,458,993			84,725,968			106,844,080			84,271,352

For the quarter and six months ended June 30, 2011, the potential dilutive shares related to certain convertible notes payable were not included in computing earnings per common share because their effects would be antidilutive.

Fair Value Measurement – NNN’s estimates of fair value of financial and non-financial assets and liabilities are based on the framework established in the fair value accounting guidance. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The guidance describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

• Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.

• Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

New Accounting Pronouncements – In December 2011, the FASB issued Accounting Standards Update ("ASU") 2011-10 entitled Derecognition of in Substance Real Estate - a Scope Clarification. The amendments in this update clarify the scope of current U.S. generally accepted accounting principals ("GAAP"). The amendments will resolve the diversity in practice about whether the guidance in subtopic 360-20 applies to the derecognition of in substance real estate when the parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate because of a default by the subsidiary on its nonrecourse debt. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. The adoption of the standard did not have a significant impact on NNN's financial position or results of operations.

In December 2011, the FASB issued ASU 2011-11 amending its guidance on offsetting assets and liabilities in financial statements. The objective of this update will require disclosure to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amendments in this update are effective for annual reporting periods beginning on or after January 1, 2013. NNN is currently evaluating the provisions to determine the potential impact, if any, the adoption will have on its financial position and results of operations.

In June 2011, the FASB issued ASU 2011-05 which amended its guidance on the presentation of comprehensive income in financial statements. The new guidance requires that all nonowner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The provisions of this new guidance were effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this guidance changed the presentation of NNN's condensed consolidated financial statements but did not have an effect on NNN's results of operations.

In December 2011, the FASB issued ASU 2011-12, which indefinitely defers certain provisions of ASU 2011-05, including a requirement for entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net earnings is presented and the statement in which other comprehensive income is presented. The effective dates and expected changes to our presentation are the same as noted in ASU 2011-05 above.

Use of Estimates – Management of NNN has made a number of estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with U.S. GAAP. Significant estimates include provision for impairment and allowances for certain assets, accruals, useful lives of assets and purchase price allocation. Actual results could differ from those estimates.

Reclassification – Certain items in the prior year’s consolidated financial statements and notes to consolidated financial statements have been reclassified to conform to the 2012 presentation.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Receivables, allowance	$ 1,113	$ 1,403
Accrued rental income, allowance	3,086	4,870
Debt costs, accumulated amortization	16,986	15,332
Debt Instrument, Unamortized Premium	216	0
Notes payable - convertible, unamortized discount	4,256	6,363
Notes payable, unamortized discount	$ 4,763	$ 5,033
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	15,000,000	15,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	190,000,000	190,000,000
Common stock, shares issued	107,449,071	104,754,859
Common stock, shares issued and outstanding	107,449,071	104,754,859
Excess stock, par value	$ 0.01	$ 0.01
Excess stock, shares authorized	205,000,000	205,000,000
Excess stock, shares issued	0	0
Excess stock, shares outstanding	0	0
Series D Depositary Share [Member]
Series D and Series C, depositary shares issued	11,500,000	0
Series D and Series C, depositary shares outstanding	11,500,000	0
Series D and Series C, stated liquidation value per share	$ (25)	$ 0
Series C Depositary Share [Member]
Series D and Series C, depositary shares issued	0	3,680,000
Series D and Series C, depositary shares outstanding	0	3,680,000
Series D and Series C, stated liquidation value per share	$ 0	$ (25)

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Fair Value Of Financial Instruments

6 Months Ended

Jun. 30, 2012

Financial Instruments, Owned, at Fair Value [Abstract]

Fair Value Of Financial Instruments

Fair Value of Financial Instruments:

NNN believes the carrying value of its Credit Facility approximates fair value based upon its nature, terms and variable interest rate. NNN believes that the carrying value of its cash and cash equivalents, mortgages, notes and other receivables, mortgages payable and other liabilities at June 30, 2012 and December 31, 2011, approximate fair value based upon current market prices of similar issues. At June 30, 2012 and December 31, 2011, the fair value of NNN’s notes payable and convertible notes payable, collectively, was 1,347,658,000 and $1,362,922,000, respectively, based upon the quoted market price, which is level one valuation.

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Document And Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 27, 2012
Entity Information [Line Items]
Entity Registrant Name	NATIONAL RETAIL PROPERTIES, INC.
Entity Central Index Key	0000751364
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		108,190,322

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Subsequent Events

6 Months Ended

Jun. 30, 2012

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events:

NNN reviewed all subsequent events and transactions that have occurred after June 30, 2012, the date of the condensed consolidated balance sheet. There were no reportable subsequent events or transactions.

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Condensed Consolidated Statements Of Comprehensive Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012		Jun. 30, 2011
Revenues:
Rental income from operating leases	$ 77,927	$ 57,578	$ 151,494		$ 114,526
Earned income from direct financing leases	618	693	1,246		1,433
Percentage rent	221	132	332		247
Real estate expense reimbursement from tenants	2,505	2,142	5,337		4,422
Interest and other income from real estate transactions	764	543	1,470		1,164
Interest income on commercial mortgage residual interests	716	777	1,471		1,544
Total revenues	82,751	61,865	161,350		123,336
Retail operations:
Revenues	7,784	12,450	19,008		21,300
Operating expenses	(7,481)	(11,760)	(18,543)		(20,612)
Net	303	690	465		688
Operating expenses:
General and administrative	7,024	6,568	14,627		13,226
Real estate	4,025	3,919	8,597		7,573
Depreciation and amortization	19,032	13,765	37,140		27,184
Impairment - commercial mortgage residual interests valuation	2,718	267	2,718		396
Total operating expenses	32,799	24,519	63,082		48,379
Earnings from operations	50,255	38,036	98,733		75,645
Other expenses (revenues):
Interest and other income	(361)	(283)	(719)		(625)
Interest expense	19,394	17,512	39,039		35,174
Total other expenses (revenues)	19,033	17,229	38,320		34,549
Earnings from continuing operations before income tax expense and equity in earnings of unconsolidated affiliate	31,222	20,807	60,413		41,096
Income tax expense	(140)	(210)	(236)		(191)
Equity in earnings of unconsolidated affiliate	155	104	305		213
Earnings from continuing operations	31,237	20,701	60,482		41,118
Earnings from discontinued operations, net of income tax expense (Note 7)	2,239	568	2,817		1,005
Earnings including noncontrolling interests	33,476	21,269	63,299		42,123
Loss (earnings) attributable to noncontrolling interests:
Continuing operations	34	67	55		93
Discontinued operations	(5)	(33)	(17)		(93)
Net loss (income) attributable to noncontrolling interest	29	34	38		0
Net earnings attributable to NNN	33,505	21,303	63,337		42,123
Excess of redemption value over carrying value of preferred shares redeemed	0	0	(3,098)		0
Net earnings attributable to common stockholders	27,579	19,607	52,334		38,731
Basic:
Continuing operations	$ 0.24	$ 0.23	$ 0.47		$ 0.46
Discontinued operations	$ 0.02	$ 0.00	$ 0.02		$ 0.00
Net earnings	$ 0.26	$ 0.23	$ 0.49		$ 0.46
Diluted:
Continuing operations	$ 0.24	$ 0.23	$ 0.46		$ 0.46
Discontinued operations	$ 0.02	$ 0.00	$ 0.03		$ 0.00
Net earnings	$ 0.26	$ 0.23	$ 0.49		$ 0.46
Weighted average number of common shares outstanding:
Basic	105,992,014	84,409,788	105,417,595		83,771,728
Diluted	107,458,993	84,725,968	106,844,080		84,271,352
Other comprehensive income
Net earnings attributable to NNN	33,505	21,303	63,337		42,123
Amortization of interest rate hedges	58	(42)	114		(85)
Fair value treasury locks	0	(6,881)	0		(5,218)
Unrealized gains - commerical mortgage residual interests	213	539	213		599
Stock value adjustments	0	(7)	(1)		(26)
Comprehensive income attributable to NNN	33,776	14,912	63,663		37,393
Series C Depositary Share [Member]
Loss (earnings) attributable to noncontrolling interests:
Series C preferred stock dividends and Series D preferred stock dividends	0	(1,696)	(1,979)	[1]	(3,392)	[1]
Series D Depositary Share [Member]
Loss (earnings) attributable to noncontrolling interests:
Series C preferred stock dividends and Series D preferred stock dividends	$ (5,926)	$ 0	$ (5,926)	[2]	$ 0	[2]

[1] The Series C preferred stock was redeemed in March 2012. The dividends paid during the quarter ended March 31, 2012 include accumulated and unpaid dividends through the redemption date.

[2] The Series D preferred stock dividends paid during the quarter ended June 30, 2012 include accumulated and unpaid dividends from the issuance date through the declaration date. The Series D preferred stock has no maturity date and will remain outstanding unless redeemed.

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes:

NNN has elected to be taxed as a REIT under the Internal Revenue Code (“Code”), commencing with its taxable year ended December 31, 1984.  To qualify as a REIT, NNN must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its REIT taxable income to its stockholders.  NNN intends to adhere to these requirements and maintain its REIT status. As a REIT, NNN generally will not be subject to corporate level federal income tax on taxable income that it distributes currently to its stockholders.  NNN may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income, if any.  The provision for federal income taxes in NNN's consolidated financial statements relates to its TRS operations and any potential taxable built-in gain.  NNN did not have significant tax provisions or deferred income tax items during the periods reported hereunder.

In June 2006, the FASB issued guidance, which clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements in accordance with FASB guidance included in Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

NNN, in accordance with FASB guidance included in Income Taxes, has analyzed its various federal and state tax filing positions. NNN believes that its income tax filing positions and deductions are well documented and supported. Additionally, NNN believes that its accruals for tax liabilities are adequate. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to the FASB guidance. In addition, NNN did not record a cumulative effect adjustment related to the adoption of the FASB guidance.

NNN has had no increases or decreases in unrecognized tax benefits for current or prior years since adopting the guidance. Further, no interest or penalties have been included since no reserves were recorded and no significant increases or decreases are expected to occur within the next 12 months. When applicable, such interest and penalties will be recorded as non-operating expenses. The periods that remain open under federal statute are 2008 through 2012. NNN also files in many states with varying open years under statute.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2012

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Stockholders' Equity:

The following table outlines the dividends declared and paid for each issuance of NNN's stock (in thousands, except per share data):

		Six Months Ended June 30,
		2012		2011
Series C preferred stock (1):
	Dividends	$	1,979	$	3,392
	Per share	0.5378		0.9218
Series D preferred stock (2):
	Dividends	5,926		—
	Per share	0.5153		—
Common stock:
	Dividends	81,511		63,887
	Per share	0.770		0.760

¹⁾ The Series C preferred stock was redeemed in March 2012. The dividends paid during the quarter ended March 31, 2012 include accumulated and unpaid dividends through the redemption date.

²⁾ The Series D preferred stock dividends paid during the quarter ended June 30, 2012 include accumulated and unpaid dividends from the issuance date through the declaration date. The Series D preferred stock has no maturity date and will remain outstanding unless redeemed.

In February 2012, NNN filed a shelf registration statement with the Securities and Exchange Commission (the "Commission") which permits the issuance by NNN of an indeterminate amount of debt and equity securities.

In February 2012, NNN issued 11,500,000 depositary shares representing interests in our 6.625% Series D Cumulative Redeemable Preferred Stock ("Series D Preferred Stock") at a price of $25.00 per depositary share generating net proceeds of $277,645,000. In connection with this offering, NNN incurred stock issuance costs totaling approximately $9,855,000, consisting primarily of underwriters' fees and commissions, legal and accounting fees and printing expenses.

In March 2012, NNN redeemed all outstanding depositary shares (3,680,000) representing interests in its 7.375% Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”). The Series C Preferred Stock was redeemed at $25.00 per depositary share, plus accumulated and unpaid distributions through the redemption date, for an aggregate redemption price of $25.0768229 per depositary share. The excess carrying amount of preferred stock redeemed over the cash paid to redeem the preferred stock was $3,098,000 representing Series C Preferred Stock issuance costs.

In May 2012, NNN established an at-the-market (“ATM”) equity program which allows NNN to sell up to an aggregate of 9,000,000 shares of common stock from time to time over the next three years. NNN intends to use the net proceeds from this offering to repay outstanding indebtedness under the Credit Facility, to fund potential property acquisitions and for other general corporate purposes. During the quarter and six months ended June 30, 2012, NNN issued approximately 395,000 shares of common stock through the ATM at an average price of $27.30 per share generating approximately $10,527,000 in net proceeds. In connection with the ATM, NNN incurred stock issuance costs totaling approximately $253,000, consisting primarily of underwriters' fees and commissions and legal and accounting fees.

In July2012, NNN declared a dividend of $0.395 per share, which is payable in August2012 to its common stockholders of record as of July 31, 2012.

In February 2012, NNN filed a shelf registration statement with the Commission for its Dividend Reinvestment and Stock Purchase Plan (“DRIP”) which permits the issuance by NNN of up to 16,000,000 shares of common stock. The following outlines the common stock issuances pursuant to the DRIP (dollars in thousands):

	Six Months Ended June 30,
	2012		2011
Shares of common stock	1,881,807		2,284,335
Net proceeds	$	49,476	$	56,447

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2012

Stockholders' Equity Note [Abstract]

Schedule of Dividends Declared and Paid [Table Text Block]

The following table outlines the dividends declared and paid for each issuance of NNN's stock (in thousands, except per share data):

		Six Months Ended June 30,
		2012		2011
Series C preferred stock (1):
	Dividends	$	1,979	$	3,392
	Per share	0.5378		0.9218
Series D preferred stock (2):
	Dividends	5,926		—
	Per share	0.5153		—
Common stock:
	Dividends	81,511		63,887
	Per share	0.770		0.760

¹⁾ The Series C preferred stock was redeemed in March 2012. The dividends paid during the quarter ended March 31, 2012 include accumulated and unpaid dividends through the redemption date.

²⁾ The Series D preferred stock dividends paid during the quarter ended June 30, 2012 include accumulated and unpaid dividends from the issuance date through the declaration date. The Series D preferred stock has no maturity date and will remain outstanding unless redeemed.

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

The following outlines the common stock issuances pursuant to the DRIP (dollars in thousands):

	Six Months Ended June 30,
	2012		2011
Shares of common stock	1,881,807		2,284,335
Net proceeds	$	49,476	$	56,447

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Organization And Summary Of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Principles Of Consolidation

Principles of Consolidation – NNN’s condensed consolidated financial statements include the accounts of each of the respective majority owned and controlled affiliates, including transactions whereby NNN has been determined to be the primary beneficiary in accordance with the Financial Accounting Standards Board (“FASB”) guidance included in Consolidation. All significant intercompany account balances and transactions have been eliminated. NNN applies the equity method of accounting to investments in partnerships and joint ventures that are not subject to control by NNN due to the significance of rights held by other parties.

Real Estate

Real Estate Portfolio – NNN records the acquisition of real estate which is not subject to a lease at cost, including acquisition and closing costs. The cost of properties developed by NNN includes direct and indirect costs of construction, property taxes, interest and other miscellaneous costs incurred during the development period until the project is substantially complete and available for occupancy. During the quarter and six months ended June 30, 2012, NNN recorded $436,000 and $868,000, respectively, in capitalized interest and recorded $247,000 and $569,000 in capitalized interest during the same periods in 2011, respectively.

Purchase Accounting for Acquisition of Real Estate Subject to a Lease – In accordance with the FASB guidance on business combinations, the fair value of the real estate acquired with in-place leases is allocated to the acquired tangible assets, consisting of land, building and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, value of in-place leases and value of tenant relationships, based in each case on their relative fair values. Acquisition costs incurred in connection with a business combination are expensed when incurred.

The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and tenant improvements based on the determination of the fair values of these assets. The as-if-vacant fair value of a property is provided to management by a qualified appraiser.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as other assets or liabilities based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease, including the probability of renewal periods. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. The capitalized below-market lease values are amortized as an increase to rental income over the initial term unless the Company believes that it is likely that the tenant would renew the option whereby the Company would amortize the value attributable to the renewal over the renewal period.

The aggregate value of other acquired intangible assets, consisting of in-place leases, is measured by the excess of (i) the purchase price paid for a property after adjusting existing in-place leases to market rental rates over (ii) the estimated fair value of the property as-if-vacant, determined as set forth above. The value of in-place leases exclusive of the value of above-market and below-market in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written off. The value of tenant relationships is reviewed on individual transactions to determine if future value was derived from the acquisition.

Intangible assets and liabilities consisted of the following as of (in thousands):

	June 30, 2012		December 31, 2011
Intangible lease assets (included in Other assets):
Value of above market in-place leases, net	$	6,999	$	5,907
Value of in-place leases, net	38,342		31,970
Intangible lease liabilities (included in Other liabilities):
Value of below market in-place leases, net	25,377		23,367

Investment In An Unconsolidated Affiliate

Investment in an Unconsolidated Affiliate – NNN accounts for its investment in an unconsolidated affiliate under the equity method of accounting. In September 2007, NNN entered into a joint venture, NNN Retail Properties Fund I LLC (the “NNN Crow JV”) with an affiliate of Crow Holdings Realty Partners IV, L.P., which is accounted for under the equity method of accounting.

Valuation Of Receivables

Valuation of Receivables – NNN estimates the collectibility of its accounts receivable related to rents, expense reimbursements and other revenues. NNN analyzes accounts receivable and historical bad debt levels, customer credit-worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, tenants in bankruptcy are analyzed and estimates are made in connection with the expected recovery of pre-petition and post-petition claims.

Earnings Per Share

Earnings Per Share – Earnings per share have been computed pursuant to the FASB guidance included in Earnings Per Share. Effective January 1, 2009, the guidance requires classification of the Company’s unvested restricted share units which contain rights to receive nonforfeitable dividends, as participating securities requiring the two-class method of computing earnings per share. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period.

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per common share using the two-class method (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Basic and Diluted Earnings:
Net earnings attributable to NNN	$	33,505		$	21,303		$	63,337		$	42,123
Less: Series C preferred stock dividends	—			(1,696		)	(1,979		)	(3,392		)
Less: Series D preferred stock dividends	(5,926		)	—			(5,926		)	—
Less: Excess of redemption value over carrying value of preferred shares redeemed	—			—			(3,098		)	—
Net earnings available to NNN’s common stockholders	27,579			19,607			52,334			38,731
Less: Earnings attributable to unvested restricted shares	(180		)	(152		)	(312		)	(286		)
Net earnings used in basic earnings per share	27,399			19,455			52,022			38,445
Reallocated undistributed income (loss)	—			—			—			—
Net earnings used in diluted earnings per share	$	27,399		$	19,455		$	52,022		$	38,445
Basic and Diluted Weighted Average Shares Outstanding:
Weighted average number of shares outstanding	107,006,399			85,309,082			106,321,014			84,635,929
Less: Unvested restricted stock	(696,804		)	(647,468		)	(631,329		)	(612,375		)
Less: Contingent shares	(317,581		)	(251,826		)	(272,090		)	(251,826		)
Weighted average number of shares outstanding used in basic earnings    per share	105,992,014			84,409,788			105,417,595			83,771,728
Effects of dilutive securities:
Contingent shares	—			—			12,735			—
Convertible debt	1,310,445			160,006			1,259,319			346,699
Common stock options	1,419			3,162			1,855			3,305
Directors’ deferred fee plan	155,115			153,012			152,576			149,620
Weighted average number of shares outstanding used in diluted earnings    per share	107,458,993			84,725,968			106,844,080			84,271,352

For the quarter and six months ended June 30, 2011, the potential dilutive shares related to certain convertible notes payable were not included in computing earnings per common share because their effects would be antidilutive.

Fair Value Measurement

Fair Value Measurement – NNN’s estimates of fair value of financial and non-financial assets and liabilities are based on the framework established in the fair value accounting guidance. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The guidance describes a fair value hierarchy based upon three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

• Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.

• Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

New Accounting Pronouncements – In December 2011, the FASB issued Accounting Standards Update ("ASU") 2011-10 entitled Derecognition of in Substance Real Estate - a Scope Clarification. The amendments in this update clarify the scope of current U.S. generally accepted accounting principals ("GAAP"). The amendments will resolve the diversity in practice about whether the guidance in subtopic 360-20 applies to the derecognition of in substance real estate when the parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate because of a default by the subsidiary on its nonrecourse debt. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. The adoption of the standard did not have a significant impact on NNN's financial position or results of operations.

In December 2011, the FASB issued ASU 2011-11 amending its guidance on offsetting assets and liabilities in financial statements. The objective of this update will require disclosure to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amendments in this update are effective for annual reporting periods beginning on or after January 1, 2013. NNN is currently evaluating the provisions to determine the potential impact, if any, the adoption will have on its financial position and results of operations.

In June 2011, the FASB issued ASU 2011-05 which amended its guidance on the presentation of comprehensive income in financial statements. The new guidance requires that all nonowner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The provisions of this new guidance were effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this guidance changed the presentation of NNN's condensed consolidated financial statements but did not have an effect on NNN's results of operations.

In December 2011, the FASB issued ASU 2011-12, which indefinitely defers certain provisions of ASU 2011-05, including a requirement for entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net earnings is presented and the statement in which other comprehensive income is presented. The effective dates and expected changes to our presentation are the same as noted in ASU 2011-05 above.

Use Of Estimates

Use of Estimates – Management of NNN has made a number of estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with U.S. GAAP. Significant estimates include provision for impairment and allowances for certain assets, accruals, useful lives of assets and purchase price allocation. Actual results could differ from those estimates.

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Segment Information Segment Information (Notes)

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Information:

As a result of a continued reduction of investments in real estate acquired for the purpose of resale, the previously reported segment of inventory assets no longer meets the criteria for significance for separate segment reporting. Therefore, for the quarters and six months ended June 30, 2012 and 2011, NNN's operations are reported within one business segment in the condensed consolidated financial statements.

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Earnings From Discontinued Operations

6 Months Ended

Jun. 30, 2012

Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract]

Earnings From Discontinued Operations

Earnings from Discontinued Operations:

NNN classified the revenues and expenses related to properties which were sold or were held for sale as of June 30, 2012, as discontinued operations. The following is a summary of the earnings from discontinued operations (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenues:
Rental income from operating leases	$	687		$	1,273		$	1,571		$	2,163
Earned income from direct financing leases	—			20			6			40
Interest and other income from real estate transactions	110			165			262			359
	797			1,458			1,839			2,562
Operating expenses:
General and administrative	4			3			7			7
Real estate	192			346			478			621
Depreciation and amortization	35			132			95			263
Impairment losses and other charges	345			—			380			—
	576			481			960			891
Other expenses (revenues):
Interest expense	360			340			717			681
	360			340			717			681
Earnings before gain on disposition of real estate and income tax    expense	(139		)	637			162			990
Gain on disposition of real estate	2,438			1			2,752			132
Income tax expense	(60		)	(70		)	(97		)	(117		)
Earnings from discontinued operations attributable to NNN	2,239			568			2,817			1,005
Earnings attributable to noncontrolling interests	(5		)	(33		)	(17		)	(93		)
Earnings from discontinued operations attributable to NNN	$	2,234		$	535		$	2,800		$	912

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Derivatives

6 Months Ended

Jun. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives:

In accordance with the guidance on derivatives and hedging, NNN records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

NNN’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements or other identified risks. To accomplish this objective, NNN primarily uses treasury locks, forward swaps and interest rate swaps as part of its cash flow hedging strategy. Treasury locks and forward starting swaps are used to hedge forecasted debt issuances. Treasury locks designated as cash flow hedges lock in the yield/price of a treasury security. Forward swaps also lock the associated swap spread. Interest rate swaps designated as cash flow hedges hedging the variable cash flows associated with floating rate debt involve the receipt of variable rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings) and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings.

NNN discontinues hedge accounting prospectively when it is determined that the derivative is no longer effective in offsetting changes in the cash flows of the hedged item, the derivative expires or is sold, terminated, or exercised, the derivative is re-designated as a hedging instrument or management determines that designation of the derivative as a hedging instrument is no longer appropriate.

When hedge accounting is discontinued, NNN continues to carry the derivative at its fair value on the balance sheet, and recognizes any changes in its fair value in earnings or may choose to cash settle the derivative at that time.

In June 2011, NNN terminated its two treasury locks with a total notional amount of $150,000,000 that were hedging the risk of changes in the interest-related cash outflows associated with the potential issuance of long-term debt. The fair value of the treasury locks, designated as cash flow hedges, when terminated was a liability of $5,300,000, of which $5,218,000 was deferred in other comprehensive income.

As of June 30, 2012, $5,811,000 remains in other comprehensive income related to the effective portion of NNN’s previous interest rate hedges. During the six months ended June 30, 2012 and 2011, NNN reclassed out of comprehensive income $114,000 as an increase to interest expense and $85,000 as a reduction to interest expense, respectively. Over the next 12 months, NNN estimates that an additional $240,000 will be reclassified as an increase in interest expense. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on NNN’s long-term debt.

NNN does not use derivatives for trading or speculative purposes or currently have any derivatives that are not designated as hedges. NNN had no derivative financial instruments outstanding at June 30, 2012.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Measurements:

NNN currently values its Residuals based upon an independent valuation which provides a discounted cash flow analysis based upon prepayment speeds, expected loan losses and yield curves. These valuation inputs are generally considered unobservable; therefore, the Residuals are considered Level 3 financial assets. The table below presents a reconciliation of the Residuals (dollars in thousands):

	Six Months Ended June 30, 2012
Balance at beginning of period	$	15,299
Total gains (losses) – realized/unrealized:
Included in earnings	(2,718		)
Included in other comprehensive income	213
Interest income on Residuals	1,471
Cash received from Residuals	(1,870		)
Purchases, sales, issuances and settlements, net	—
Transfers in and/or out of Level 3	—
Balance at end of period	$	12,395
Changes in gains (losses) included in earnings attributable to a change in unrealized gains (losses) relating to     assets still held at the end of period	$	(130	)

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Stockholders' Equity (Details) (USD $)	1 Months Ended		6 Months Ended		1 Months Ended	3 Months Ended		6 Months Ended					1 Months Ended	3 Months Ended		6 Months Ended					6 Months Ended		1 Months Ended	3 Months Ended	6 Months Ended
	Jul. 31, 2012	Feb. 29, 2012	Jun. 30, 2012	Jun. 30, 2011	Feb. 29, 2012 Series D Depositary Share [Member]	Jun. 30, 2012 Series D Depositary Share [Member]	Jun. 30, 2011 Series D Depositary Share [Member]	Jun. 30, 2012 Series D Depositary Share [Member]		Jun. 30, 2011 Series D Depositary Share [Member]		Dec. 31, 2011 Series D Depositary Share [Member]	Mar. 31, 2012 Series C Depositary Share [Member]	Jun. 30, 2012 Series C Depositary Share [Member]	Jun. 30, 2011 Series C Depositary Share [Member]	Jun. 30, 2012 Series C Depositary Share [Member]		Jun. 30, 2011 Series C Depositary Share [Member]		Dec. 31, 2011 Series C Depositary Share [Member]	Jun. 30, 2012 DRIP and ATM Equity Program [Member]	Jun. 30, 2011 DRIP and ATM Equity Program [Member]	May 31, 2012 ATM Equity Program [Member]	Jun. 30, 2012 ATM Equity Program [Member] Y	Jun. 30, 2012 ATM Equity Program [Member] Y
Class of Stock [Line Items]
Series C preferred stock dividends and Series D preferred stock dividends						$ 5,926,000	$ 0	$ 5,926,000	[1]	$ 0	[1]			$ 0	$ 1,696,000	$ 1,979,000	[2]	$ 3,392,000	[2]
Series C preferred stock and Series D preferred stock, dividends per share								$ 0.5153	[1]	$ 0	[1]					$ 0.5378	[2]	$ 0.9218	[2]
Payment of common stock dividends			81,511,000	63,887,000
Common stock, dividends, per share, cash paid			$ 0.770	$ 0.760
Common stock, dividends, per share, declared	$ 0.395
Common stock, shares reserved for future issuance, dividend reinvestment plan		16,000,000
Preferred stock, shares issued					11,500,000	11,500,000		11,500,000				0		0		0				3,680,000
Preferred stock, dividend rate, percentage					6.625%								7.375%
Preferred stock, redemption price per share					$ 25.00									$ 25.00		$ 25.00
Proceeds from issuance of preferred stock			287,500,000	0	277,645,000
Payments of Stock Issuance Costs			10,393,000	0	9,855,000																			253,000	253,000
Stock redeemed or called during period, shares													3,680,000
Preferred stock, fixed annual dividend per share, depository shares														$ 25.0768229		$ 25.0768229
Preferred stock redemption premium													3,098,000
Shares available for issuance under at market offering program																							9,000,000
At market offering equity program, period in force																								3	3
Stock Issued During Period, Shares, New Issues																								395,000	395,000
Sale of Stock, Average Stock Price Per Share																								$ 27.30	$ 27.30
Stock Issued During Period, Value, New Issues																								10,527,000	10,527,000
Stock issued during period, shares, dividend reinvestment plan																					1,881,807	2,284,335
Proceeds from issuance of common stock			$ 60,319,000	$ 56,391,000																	$ 49,476,000	$ 56,447,000

[1] The Series D preferred stock dividends paid during the quarter ended June 30, 2012 include accumulated and unpaid dividends from the issuance date through the declaration date. The Series D preferred stock has no maturity date and will remain outstanding unless redeemed.

[2] The Series C preferred stock was redeemed in March 2012. The dividends paid during the quarter ended March 31, 2012 include accumulated and unpaid dividends through the redemption date.

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Real Estate - Portfolio (Tables)

6 Months Ended

Jun. 30, 2012

Real Estate Investments [Abstract]

Classification Of Investment Property Leases

The following outlines key information for NNN’s leases:

	June 30, 2012
Lease classification:
Operating	1,493
Direct financing	14
Building portion – direct financing / land portion – operating	5
Weighted average remaining lease term	12 Years

Summary Of Real Estate Subject To Operating Leases

Real estate subject to operating leases consisted of the following as of (dollars in thousands):

	June 30, 2012			December 31, 2011
Land and improvements	$	1,390,175		$	1,315,339
Buildings and improvements	2,309,079			2,118,303
Leasehold interests	1,290			1,290
	3,700,544			3,434,932
Less accumulated depreciation and amortization	(302,435		)	(270,023		)
	3,398,109			3,164,909
Work in progress	87,710			60,210
	$	3,485,819		$	3,225,119

Remaining Funding Commitments

In connection with the improvements of leased Properties, NNN has the following funding commitments (dollars in thousands):

	June 30, 2012
	# of Properties	Total Commitment(1)		Amount Funded		Remaining Commitment
Real Estate Portfolio	54	$	167,243	$	127,693	$	39,550

⁽¹⁾ Includes land and construction costs.

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Organization And Summary Of Significant Accounting Policies (Summary Of NNN's Investment Portfolio) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012 states properties	Jun. 30, 2011	Jun. 30, 2012 sqft states properties	Jun. 30, 2011
Accounting Policies [Abstract]
Capitalized interest	$ 436	$ 247	$ 868	$ 569
Total properties	1,506		1,506
Gross leasable area (square feet)			17,798,000
States	47		47

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 Series C Depositary Share [Member]	Jun. 30, 2011 Series C Depositary Share [Member]	Jun. 30, 2012 Series D Depositary Share [Member]	Jun. 30, 2011 Series D Depositary Share [Member]
Cash flows from operating activities:
Earnings including noncontrolling interests	$ 63,299	$ 42,123
Adjustments to reconcile net earnings to net cash provided by operating activities:
Performance incentive plan expense	3,889	3,297
Depreciation and amortization	37,383	27,678
Impairment losses and other charges	380	0
Impairment - commercial mortgage residual interests valuation	2,718	396
Amortization of notes payable discount	2,378	3,335
Amortization of deferred interest rate hedges	114	(85)
Equity in earnings of unconsolidated affiliate	(305)	(213)
Distributions received from unconsolidated affiliate	362	286
Gain on disposition of real estate portfolio	(2,752)	(132)
Gain on note receivable and property foreclosure	(198)	0
Other	0	82
Change in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Additions to held for sale real estate	(4,472)	(212)
Proceeds from disposition of held for sale real estate	0	1,058
Decrease in real estate leased to others using the direct financing method	807	802
Increase in work in process	(889)	(575)
Increase in mortgages, notes and accrued interest receivable	(345)	(88)
Decrease in receivables	633	998
Decrease (increase) in commercial mortgage residual interests	399	(127)
Decrease (increase) in accrued rental income	(218)	149
Decrease (increase) in other assets	487	(19)
Decrease in accrued interest payable	(668)	(57)
Decrease in other liabilities	(3,490)	(1,631)
Increase in current tax liability	255	794
Net cash provided by operating activities	99,767	77,859
Cash flows from investing activities:
Proceeds from the disposition of real estate, Investment Portfolio	12,024	807
Additions to real estate:
Accounted for using the operating method	(287,923)	(111,673)
Accounted for using the direct financing method	0	(1,747)
Increase in mortgages and notes receivable	(7,861)	(4,090)
Principal payments on mortgages and notes receivable	3,085	2,107
Payment of lease costs	(1,154)	(672)
Other	557	402
Net cash used in investing activities	(281,272)	(114,866)
Cash flows from financing activities:
Proceeds from line of credit payable	614,400	328,800
Repayment of line of credit payable	(537,400)	(270,600)
Payment of interest rate hedge	0	(5,300)
Repayment of notes payable	(50,000)	0
Payment of debt costs	0	(2,920)
Repayment of mortgages payable	(680)	(541)
Proceeds from issuance of common stock	60,319	56,391
Proceeds from issuance of preferred stock	287,500	0
Redemption of preferred stock	(92,000)	0
Payment of Series C and Series D preferred stock dividends			(1,979)	(3,392)	(5,926)	0
Payment of common stock dividends	(81,511)	(63,887)
Noncontrolling interest distributions	0	(45)
Noncontrolling interest contributions	0	41
Stock issuance costs	(10,393)	0
Net cash provided by financing activities	182,330	38,547
Net increase in cash and cash equivalents	825	1,540
Cash and cash equivalents at beginning of year	2,082	2,048
Cash and cash equivalents at end of year	2,907	3,588
Supplemental disclosure of cash flow information:
Interest paid, net of amount capitalized	38,800	33,230
Taxes paid (received)	78	(487)
Supplemental disclosure of non-cash investing and financing activities:
Issued 396,577 and 139,351 shares of restricted and unrestricted common stock in 2012 and 2011, respectively, pursuant to NNN's performance incentive plan	8,576	3,407
Issued 8,389 and 4,623 shares of common stock in 2012 and 2011, respectively, to directors pursuant to NNN's performance incentive plan	229	118
Issued 10,247 and 13,879 shares of common stock in 2012 and 2011, respectively, pursuant to NNN's Deferred Director Fee Plan	149	245
Surrender of 4,178 and 4,494 shares of restricted stock in 2012 and 2011, respectively	98	94
Change in other comprehensive income	(326)	(4,730)
Change in lease classification (direct financing lease to operating lease)	757	2,243
Mortgage payable assumed in connection with real estate transaction	6,634	0
Real estate acquired in connection with mortgage receivable foreclosure	490	0
Real estate received in note receivable foreclosure	$ 1,595	$ 0

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Line Of Credit Payable

6 Months Ended

Jun. 30, 2012

Line of Credit Facility [Abstract]

Line Of Credit Payable

Line of Credit Payable:

In May 2011, NNN amended and restated its credit agreement increasing the borrowing capacity under its unsecured revolving credit facility from $400,000,000 to $450,000,000 and amending certain other terms under the former revolving credit facility (as the context requires, the previous and new revolving credit facility, the “Credit Facility”). The Credit Facility had a weighted average outstanding balance of $52,946,000 and a weighted average interest rate of 1.8 percent during the six months ended June 30, 2012. The Credit Facility matures May 2015, with an option to extend maturity to May 2016. The Credit Facility bears interest at LIBOR plus 150 basis points; however, such interest rate may change pursuant to a tiered interest rate structure based on NNN's debt rating. The Credit Facility also includes an accordion feature to increase the facility size up to $650,000,000, subject to lender approval. As of June 30, 2012, $142,600,000 was outstanding and $307,400,000 was available for future borrowings under the Credit Facility, excluding undrawn letters of credit totaling $3,800,000.

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Organization And Summary Of Significant Accounting Policies Gross Intangible Assets and Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Leases, Acquired, Above In-Place [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible lease assets	$ 6,999	$ 5,907
Leases, Acquired-in-Place [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible lease assets	38,342	31,970
Leases, Acquired-in-Place, Market Adjustment [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible lease liabilities	$ 25,377	$ 23,367

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Segment Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2012 segments	Jun. 30, 2011 segments	Jun. 30, 2012 segments	Jun. 30, 2011 segments
Segment Reporting [Abstract]
Reportable segments	1	1	1	1

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Organization And Summary Of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

Summary Of NNN's Investment Portfolio

NNN's assets include: real estate assets, mortgages and notes receivable, and commercial mortgage residual interests. NNN acquires, owns, invests in and develops properties that are leased primarily to retail tenants under long-term net leases and primarily held for investment (“Properties” or “Property Portfolio”).

	June 30, 2012
Property Portfolio:
Total properties	1,506
Gross leasable area (square feet)	17,798,000
States	47

Intangible Assets and Liabilities

Intangible assets and liabilities consisted of the following as of (in thousands):

	June 30, 2012		December 31, 2011
Intangible lease assets (included in Other assets):
Value of above market in-place leases, net	$	6,999	$	5,907
Value of in-place leases, net	38,342		31,970
Intangible lease liabilities (included in Other liabilities):
Value of below market in-place leases, net	25,377		23,367

Computation Of Basic And Diluted Earnings Per Share

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per common share using the two-class method (dollars in thousands):

	Quarter Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Basic and Diluted Earnings:
Net earnings attributable to NNN	$	33,505		$	21,303		$	63,337		$	42,123
Less: Series C preferred stock dividends	—			(1,696		)	(1,979		)	(3,392		)
Less: Series D preferred stock dividends	(5,926		)	—			(5,926		)	—
Less: Excess of redemption value over carrying value of preferred shares redeemed	—			—			(3,098		)	—
Net earnings available to NNN’s common stockholders	27,579			19,607			52,334			38,731
Less: Earnings attributable to unvested restricted shares	(180		)	(152		)	(312		)	(286		)
Net earnings used in basic earnings per share	27,399			19,455			52,022			38,445
Reallocated undistributed income (loss)	—			—			—			—
Net earnings used in diluted earnings per share	$	27,399		$	19,455		$	52,022		$	38,445
Basic and Diluted Weighted Average Shares Outstanding:
Weighted average number of shares outstanding	107,006,399			85,309,082			106,321,014			84,635,929
Less: Unvested restricted stock	(696,804		)	(647,468		)	(631,329		)	(612,375		)
Less: Contingent shares	(317,581		)	(251,826		)	(272,090		)	(251,826		)
Weighted average number of shares outstanding used in basic earnings    per share	105,992,014			84,409,788			105,417,595			83,771,728
Effects of dilutive securities:
Contingent shares	—			—			12,735			—
Convertible debt	1,310,445			160,006			1,259,319			346,699
Common stock options	1,419			3,162			1,855			3,305
Directors’ deferred fee plan	155,115			153,012			152,576			149,620
Weighted average number of shares outstanding used in diluted earnings    per share	107,458,993			84,725,968			106,844,080			84,271,352