NNN REIT 2026年第3四半期決算説明会：AFFOは5.8%増加、ガイダンスを維持

主要ハイライト

• NNN REITの2026年第3四半期の1株当たりAFFOは前年同期比5.8%増の0.91ドル、1株当たりコアFFOは同5.9%増の0.90ドルとなりました。
• 全3,817物件の稼働率は99.2%に達し、空室物件はわずか31件にとどまりました。ポートフォリオの加重平均残存賃料期間は約10年です。
• 当四半期中、同社は76物件に2億2200万ドルを投資しました。初期キャップレートは7.3%、予想長期利回りは8.4%です。取得物件の加重平均賃金期間は19年以上となっています。
• 経営陣は2026年の1株当たりAFFO業績予想（ガイダンス）を3.55〜3.59ドルに据え置きました。中間値は前年比3.8%の伸びを示しています。
• 利用可能な流動性は合計14億ドルとなりました。純負債/EBITDA倍率は5.6倍に低下し、未決済のフォワード株式を含めると5.3倍となります。
• 経営陣によると、第4四半期の物件取得時のキャップレートは第3四半期の水準から30〜40ベーシスポイント上昇する見込みであり、市場価格設定が合理的に調整されれば、2027年序盤にさらなる上昇の可能性があるとのことです。

主要財務データ

事業および運用実績

NNN REITは、当四半期末時点で3,817件の独立型単一テナント物件を保有しています。第3四半期中に5件、最初の9か月間で18件の物件で再賃貸契約が締結され、賃料回収率はそれぞれ132%と121%となりました。

当四半期中、満料を迎えた36件の賃貸契約のうち33件が改定前賃料の105%で更新されました。年初来では、121件中106件の契約が改定前賃料の104%で更新されています。

第3四半期の物件取得は76物件、計2億2200万ドルに達しました。年初来の取引完了物件のうち約40%は500万ドル未満の取引であり、経営陣はこれをリスク調整後リターンの重要な源泉かつ幅広い機会の創出と捉えています。

2026年の最初の9か月間における物件取得は206物件、計6億5800万ドルに達しました。初期キャップレートは7.3%、予想長期利回りは8.6%でした。

NNNは第3四半期中に空室11物件を含む32物件を5000万ドルで売却しました。収益物件は7.8%のキャップレートで売却されました。年初来の物件売却収入は、空室46物件を含む83物件から計1億2300万ドルとなりました。

同社は9月30日時点で約2億400万ドルの未決済フォワード株式を保有していました。四半期末のスワップ取引実施後、5億ドルのタームローンはオールイン固定金利4.35%で完全にヘッジされています。

業績予想（ガイダンス）

NNN REITは2026年の1株当たりAFFOガイダンスを3.55〜3.59ドルに維持しました。経営陣によると、中間値は年間3.8%の成長を意味し、2025年の2.7%成長から加速することになります。

同社は通期の物件売却見通しの中間値を3000万ドル引き上げ、1億6000万〜1億8000万ドルとしました。また、年末調整や破談となった取引に関連する費用を反映し、一般管理費の予想中間値を100万ドル引き上げました。

年初来の良好な信用実績を受け、通期の貸倒損失は年換算基本賃料の約25ベーシスポイントに上方修正され、従来の想定である40ベーシスポイントから低下しました。

経営陣は、2026年の物件取得額の中間値約7億5000万ドルに引き続き意欲を示しています。ただし、取引価格の再交渉を進めており、一部の売り手が撤退する可能性があるため、第4四半期の結果には不確実性が残ります。

12月中旬に償還を迎える3億5000万ドルの社債について、NNNの予測では信用供与枠の年末残高を低水準に抑えつつ、永続的な資金調達を行うことを前提としています。経営陣は無担保社債、タームローン、転換社債型新株予約権付社債などを引き続き検討していると述べました。

リスクと注目点

資本コストの上昇に伴い、NNNは買収パイプラインの価格改定を実施しました。経営陣によると、価格設定は平均して30〜40ベーシスポイント引き上げられ、一部の取引では50〜60ベーシスポイント引き上げられました。これにより、取引解約費用の増加や足元の物件取得量に関する不確実性が生じています。

12月償還の3億5000万ドルの社債の表面利率（クーポン）は3.6%です。経営陣は、現在の市場金利での借り換えにより、2027年の業績に一定の押し下げ圧力がかかると予想しています。

NNNは、ファストフード店（QSR）、フルサービスレストラン、エンターテインメント分野における消費圧力を注視しています。デイブ＆バスターズ（Dave & Buster’s）は企業業績の低迷から引き続き警戒リストに入っていますが、経営陣によると物件レベルでの賃料カバー率は健全を維持しているとのことです。

キャンピング・ワールド（Camping World）も、レクリエーション・ビークル（RV）市場の景気循環的な圧力にさらされています。経営陣は、在庫削減、費用削減、物件レベルでの業績を挙げ、即座に懸念すべき状況ではないとしています。

コンビニエンスストアの来店客数は伸び悩んでおり、店内利益率は約35%から30%台前半へと低下しています。ただし、経営陣は懸念されるような賃料カバー率の悪化は見られないと述べました。

アナリスト質疑応答の要点

• 物件取得の価格設定：経営陣は第4四半期の初期キャップレートが第3四半期の水準を30〜40ベーシスポイント上回ると予想しています。セール・アンド・リースバックの売り手は、既存の賃貸契約を持つ公開市場の売り手よりも一般的に迅速に調整が行われています。
• 資金調達力：NNNは、新規の普通株式を発行することなく、年間約6億ドルの物件取得を完了できると試算しています。既存のフォワード株式を含めると、許容可能な価格設定を条件として、買収余力は概ね9億〜10億ドルになると経営陣は推計しています。
• ポートフォリオの信用状況：警戒リストに重大な変更は報告されておらず、2026年中に大規模なテナントの事業再編はありませんでした。経営陣はレストラン、エンターテインメント、消費動向の影響を受けやすいテナントの監視を継続しています。
• 配当実績：同社は37年連続での増配を達成し、経営陣によると、この記録に達した上場REIT 3社のうちの1社となりました。
• 資産売却：物件売却は主に防御的なポートフォリオ管理を反映したものであり、残存賃貸期間が限定的な物件、営業実績が低調な物件、または賃料収入の再開に向けた明確な道筋がない物件などが含まれます。
• テナントの集中度：メイビス・タイヤ（Mavis Tire）のエクスポージャー増加は、新規の直接取引ではなく同社による既存のNNNテナントの買収によるものです。経営陣はCVSへのエクスポージャーは軽微であると説明しました。

決算説明会文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good day, ladies and gentlemen, and welcome to the NNN REIT, Inc. Third Quarter 2026 Earnings Conference Call. [Operator Instructions] And please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Steve Horn, CEO at NNN REIT. Sir, the floor is yours.

Stephen Horn

Thanks, Ollie. Good morning. Thank you for joining NNN's Third Quarter 2026 Earnings Call. Today on the call with me is our Chief Financial Officer, Vin Chao. NNN's disciplined growth strategy, proven operations and commitment to deploying shareholder capital in sufficiently accretive acquisitions continues. Our focus remains on delivering long-term value, navigating market challenges and capitalizing on opportunities that drive sustainable growth.

As detailed in this morning's press release, NNN delivered another strong quarter of operating and financial performance, highlighted by a 5.8% growth in AFFO compared to the prior year and delivered its 37th year of dividend growth being only 1 of 3 publicly traded REITs that hit that milestone. With $1.4 billion in total availability and an industry-leading average debt maturity of nearly 10 years, our balance sheet remains a significant competitive advantage, providing us with the capacity to pursue attractive investment opportunities while maintaining our disciplined approach to capital allocation.

As we look ahead to the fourth quarter and begin planning for 2027, we remain focused on our core objective of delivering sustainable long-term value growth for shareholders through disciplined capital allocation and accretive growth. NNN is in position to fund our acquisition activity through the undrawn forward equity, internally generated free cash flow and strategic dispositions without the need to access equity capital while maintaining a leverage-neutral balance sheet. This allows us to pursue investment opportunities without putting unnecessary pressure on our balance sheet or diluting existing shareholders.

Importantly, we retain significant flexibility to accelerate dispositions should compelling acquisition opportunities emerge. One of the distinct advantages of our mature portfolio is the substantial value we've created in our real estate over decades of ownership and active asset management. These embedded gains provide us with a valuable source of capital that we can selectively unlock and redeploy into higher return opportunities. Before I get into the details of the quarter, I'd like to take a moment to welcome Christina Chiu and Chaz Mueller to the NNN Board of Directors.

Both are highly respected leaders who bring extensive public REIT and Board experience, along with valuable real estate experience and perspectives. Their insights will be important as we continue to execute our strategy and focus on creating long-term value for our shareholders. I look forward to working with both. At the same time, I want to express my sincere appreciation to Betsy Holden’ for her many years of dedicated service to NNN. Her leadership, sound judgment and steady voice has been invaluable to our company and our Board. NNN is a stronger company today because of her contributions, and we are grateful for her commitment to our success. We wish her all the best in the years ahead.

Shifting to the highlights of the third quarter financial results. Our portfolio of 3,817 freestanding single-tenant properties continued to deliver consistent and predictable performance, supported by our weighted average remaining lease term of approximately 10 years. Occupancy remained exceptionally strong at 99.2% above our long-term historical average of approximately 98% with only 31 vacant properties across the entire portfolio. Contributing to that high occupancy was re-leasing 5 assets during the quarter and 18 year-to-date with a recovery rate of 132% and 121%, respectively.

In addition, 33 of 36 assets renewed at 105% of prior rent for the quarter and 106 of 121 year-to-date at 104% for the prior rent, tracking above historical averages. This continued stability reinforces the quality of our real estate, the strength of our tenant relationships and the durability of the cash flows that support the dividend. Turning to acquisitions during the quarter. We invested $222 million in 76 properties at an initial cap rate of 7.3%. Importantly, when you factor in the contractual rent escalators, these investments are expected to generate a projected long-term yield of 8.4%. The transactions also carried a weighted average lease term of over 19 years, reflecting the attractive economics and long-term income visibility associated with the sale-leaseback strategy.

Through the first 9 months of the year, we invested $658 million in 206 properties at an initial cap rate of 7.3% as well, with an expected projected long-term yield of 8.6%. One point worth noting is nearly 40% of our closings were transactions under $5 million. We continue to believe the smaller transactions represent an important and often overlooked opportunity to create shareholder value. While these investments may not individually attract significant attention, collectively, they provide attractive risk-adjusted returns, expand our investment opportunity set and demonstrate the scalability and the efficiency of the acquisition platform. Ultimately, our focus is on the quality of real estate, the returns we generate and the long-term value we create for our shareholders.

As we move towards the year-end, we are seeing a meaningful shift in the acquisition market with cap rates moving higher following the third quarter. It's important to recognize that the transactions we closed during the third quarter were either completed or fully committed before significant moves in both the debt and equity capital markets. As a result, initial pricing on those investments were largely established before the market adjusted.

Late in the quarter, call it, mid-September, we took a disciplined approach to reprice our acquisition pipeline to reflect the changes of cost of capital and our return expectations. In some cases, sellers accepted the revised economics while others elected not to move forward. While this resulted in elevated dead deal cost, which is in our revised guidance, we believe walking away from transactions that no longer meet our investment criteria is the right decision for the shareholders.

Looking ahead, we expect initial cap rates on fourth quarter acquisitions to reflect the higher pricing environment. And assuming markets behave rationally, we anticipate further upward movement in initial acquisition yields during the first part of 2027. Our objective remains unchanged to deploy shareholder capital only when the risk-adjusted returns justify the investment, recognizing that sometimes the most valuable decision we make is the transaction we choose not to pursue. During the quarter, we sold 32 properties, which included 11 vacant, raising $50 million of proceeds. Income-producing assets were sold at 7.8%.

Year-to-date, we now have raised $123 million of proceeds from the sale of 83 assets, which included 46 vacant. Income-producing were sold at 7.3%. But if you include the vacant assets, it's about a 3.2%. The mission is always to re-lease vacancies, but we'll continue to sell nonperforming assets if we don't see a clear path to generate rental income within a reasonable time frame. Our balance sheet remains one of the strongest in the sector. Our credit facility is nearly fully available and a 9.8-year weighted debt maturity remains industry-leading. NNN is in a good position to fund the remaining of 2026 and beyond.

With that, I'll turn the call over to Vin for more color and detail on the quarterly numbers and updated guidance.

Vincent Chao

Thanks, Steve. Let's start with our customary cautionary statements. During this call, we will make certain statements that may be considered forward-looking statements under federal securities laws. The company's actual future results may differ significantly from matters discussed in these forward-looking statements, and we may not release revisions to these forward-looking statements to reflect changes after the statements are made. Factors and risks that could cause actual results to differ from expectations are disclosed in greater detail in the company's filings with the SEC and in this morning's press release.

Now moving on to results. This morning, we reported AFFO per share of $0.91 and core FFO per share of $0.90, up 5.8% and 5.9%, respectively, over the prior year. Results were ahead of our internal projections with upside driven primarily by lower-than-expected bad debt and higher-than-expected interest and other income from real estate transactions. The upside in this line item was driven by settlement income from prior bankruptcies as well as land sale income.

Our NOI margin for the quarter was 96.7%, up 10 basis points sequentially as occupancy continued to tick higher to 99.2%. Annualized base rent was $974 million at quarter end, up 6.8% year-over-year, fueled by our strong year-to-date acquisition volume. G&A as a percentage of total revenue was 5.4%, down from 5.8% last quarter, while our cash G&A margin was 4.1% compared with 4.4% in the second quarter. Free cash flow after dividend was about $56 million in the third quarter. As noted earlier, bad debt was better than expected as near-term credit issues remain limited. While we will always remain vigilant, there have been no material changes to our watch list. We continue to proactively identify opportunities to improve portfolio quality through leasing and targeted asset sales prior to potential issues arising.

On the capital markets front, we sold about 500,000 shares under forward sale agreements at an average price of over $47 per share in the third quarter. We also settled over 2 million forward shares, generating just under $90 million in net proceeds. As of September 30, we had about $204 million of available unsettled forward equity. Subsequent to quarter end, we entered into swaps totaling $100 million that when combined with previously completed swaps, fully hedged our $500 million term loan at an all-in fixed rate of 4.35%.

Turning to the balance sheet. At quarter end, we had unencumbered -- no encumbered assets, $1.4 billion of available liquidity and just 2.3% of our debt was tied to floating rates. Net debt-to-EBITDA of 5.6x was down 10 basis points from last quarter. And when including the impact of unsettled forward equity, pro forma net debt to EBITDA was 5.3x, down from 5.4x last quarter. We ended the third quarter with a sector-leading debt duration of 9.8 years, which continues to be well matched versus our average lease duration of 10.1 years.

On October 15, we announced a $0.62 quarterly dividend, an increase of 3.3% over the prior year, which -- and paid a $0.62 quarterly dividend in the third quarter, marking our 37th consecutive annual dividend increase. The current dividend equates to an attractive 6% dividend yield and a well-covered 68% AFFO payout ratio. Finally, I'll end my comments with some additional color regarding our updated 2026 outlook.

As disclosed in our earnings release, we are maintaining our AFFO per share guidance for 2026 of $3.55 to $3.59, which represents 3.8% year-over-year growth at the midpoint and an acceleration from 2.7% growth in 2025. There are a few line items -- a few line item updates that are summarized on Page 3 of our earnings release. First, given year-to-date activity and expected sales in the fourth quarter, we are raising our disposition outlook by $30 million at the midpoint to a new range of $160 million to $180 million. The increase reflects our disciplined approach to portfolio management as well as strong demand for our high-quality properties. We also increased our G&A guidance by $1 million at the midpoint. This was primarily driven by typical year-end true-ups as well as some dead deal costs booked in the quarter as we remain disciplined on transaction pricing.

From a credit loss perspective, we are leaving our fourth quarter assumption unchanged. But given the year-to-date outperformance versus plan, we now project full year bad debt to be about 25 basis points of ABR, down from 40 basis points as of last quarter. Regarding our $350 million bond that matures in mid-December, we have assumed in our model a permanent financing in our forecast to repay the notes while maintaining a low year-end balance on our line of credit. Given our liquidity and access to multiple sources of capital, we have optionality regarding how we ultimately address this maturity. A few other run rate items to keep in mind as you update your models.

First, we booked roughly $1 million in settlement and/or land sale income for the third quarter that is not expected to recur. Second, our lease termination fees for the quarter totaled $1.4 million. But as we look forward, we do not expect a material amount of lease termination fees in the fourth quarter. And lastly, the 2 million shares that we settled in the third quarter settled in late September and therefore, did not have a material impact on our reported average diluted share count. So please keep that in mind as you're updating your models.

In closing, we are very pleased with our quarterly and year-to-date performance and with $1.4 billion of total liquidity, including over $200 million of unsettled forward equity, over $200 million of annual free cash flow generation and a conservatively managed balance sheet, NNN remains well positioned to perform in the currently evolving environment.

With that, I'll turn the call back to Ollie for the questions.

Operator

[Operator Instructions] Our first question today is coming from Nick Joseph with Citigroup.

質疑応答

Nicholas Joseph

I appreciate the comments about cap rates moving, I think, mid-September and after the third quarter. Obviously, rates rose significantly. We've seen them pull back a bit. I was just hoping you could quantify kind of where you're seeing cap rates today and how you're thinking about returns just given the volatility that we're seeing in the interest rate environment?

Stephen Horn

Yes. I'll take the first part about that, Nick, and Vin will handle the second part. As far as the cap rates, kind of said in the opening remarks, the third quarter was pretty much baked, and it was really kind of the last couple of weeks of the third quarter that when we revisited our pipeline, in some cases, we were moving 50, 60 basis points. But overall, kind of seeing that 30 to 40 basis point movement for the fourth quarter expect it to go higher if everybody remains rational in the first part of 2027. And that's our opportunity set and the mix of clients that we deal with. And some of the sellers didn't want to take any increase, which is okay, and we'll move on to other transactions. But yes, 30 to 40 basis points range.

Vincent Chao

Yes. And Nick, on the return side of things, I mean look, our outlook and our expectations on returns really don't change given the volatility. I mean we are repricing deals. We did push back on some of the pricing that we had in the third quarter and again in the fourth quarter. I think the volatility means folks are not sure what they're willing to accept on the seller side. And so we have built in a little bit of cushion in the fourth quarter outlook on acquisitions that people might walk away from some deals. So we're going to continue to be disciplined like we have over the last 40-plus years. We've operated in high interest rate cycles, low interest rate cycles. We've operated through lots of different economic cycles. And so all of that has allowed us to continue to raise that dividend year in, year out regardless of what's going on around us. And so we're going to maintain that discipline going forward.

Nicholas Joseph

That's very helpful. And then it looked like Mavis Tire, I think, increased by 13 properties, ABR up about 60 basis points. Can you just touch on kind of what drove that and exposure to the tenant?

Vincent Chao

The main driver of that increase was an M&A event where they acquired a tenant of ours, not that we did more deals with them directly.

Operator

Our next question is coming from Jamie Feldman with Wells Fargo.

James Feldman

So I guess just a follow-up on the changes in the market. I mean, can you talk more about the types of assets that you think are moving the most types of sellers that are willing to change and those that are less willing to change, just so we have a better sense of how the stands shifting?

Stephen Horn

Yes. Good question, Jamie. We're in the market, but we don't participate as far as transactions in every industry. So I can only specifically speak to what we're pursuing. And for us, it was more of the sale-leaseback transaction of the middle market clients that are sophisticated as we joke internally, they have CFOs. So the groups that understand that interest rates were changing because they're always talking in the capital markets, primarily, those are the ones that accept the change. The open market transaction where there may be an existing lease, those we found were a little bit stickier initially.

Do I think they'll move up eventually? Yes. But it's usually the sale-leaseback guys are moving a little bit quicker and the open market are a little bit stickier currently.

James Feldman

Okay. And then I guess with the election results last night, just wondering if bonus depreciation transactions accelerate a bit, just people may be concerned that it's not going to be around for much longer. Just can you remind us, is that something you -- as you think about your disposition pipeline, what would qualify in the portfolio? Like how large of a magnitude of assets do you think you could even sell under those kind of deals? And just any other thoughts on the disposition market and how those buyers are changing based on rates?

Stephen Horn

Not specifically on the disposition market. When we look at dispositions, we look at defensive sales when we're having conversations with our tenants that they may or may not renew an asset or the store level performance that we're monitoring is slipping over a course of time.

So we'll look to do active portfolio management and sell those and that they may be at a little bit elevated cap rates because of the performance. As far as the accelerated depreciation is primarily convenience stores and car washes. And you know our portfolio. We have a lot of convenience stores and car washes that qualify for that. And we selectively will sell into that market when somebody is willing to pay us an extremely low cap rate that we will. And we do -- we prune the portfolio that way where we don't sell our gems. You can't sell the real bad assets per se over time. So kind of sell the lower performers that the accelerated depreciation asset will pay.

James Feldman

So can you provide like just a ballpark of like just dollar amount, like how big that potential sales bucket might be in the portfolio? Just on the depreciation side.

Vincent Chao

Yes, Jamie, that's pretty hard to quantify just because those sellers kind of come in very late in last minute because they're tax planning at the end of the year. For instance, last year, we had a deal come in on the 15th of December, I want to say, and they were trying to close by year-end. So it's a little episodic. I think from our perspective, we have a large pool of potential sellable properties. And we have identified -- we proactively identified a pool that we would be happy to part ways with at the right price. So if someone does come to us, we're ready to go pretty quickly.

And again, it's a great opportunity for both sides, really. I mean, I think there's this view that depreciated buyers are not sophisticated or don't know what they're doing. I mean, obviously, they are getting a legitimate benefit with the tax savings. And so we're kind of splitting that value between them and us, and so we can get better cap rates. And also, they're a little bit less quality focused because, again, their primary goal is to reduce their taxes. So it is a great opportunity for us. Hard to say what the total potential is just because they're very episodic and when they come in.

Operator

Our next question is coming from Jana Galan with Bank of America.

Jana Galan

This year, you've had very favorable performance on the portfolio bad debt. So just curious how you're thinking about the watch list from here and any categories you're watching more closely?

Vincent Chao

Yes. So I mean we look at the headlines just like you guys do, and we obviously have our conversations with our tenants very regularly. So we are always actively monitoring the portfolio. As I mentioned in my prepared remarks, we don't have any real changes to the watch list today. But we certainly are aware of the consumer pressures on the consumer today. And some of the -- there's been some pressure in the QSR space, a couple of full-service restaurants as well. But it is not completely broad-based, right?

There are lots of QSR and lots of full service that are doing quite well. And so we're not looking at one broad brush, but we certainly are keeping an eye on those industries and then entertainment has been in the news as well. So we do follow that and we do watch it closely. But given our current coverages and current outlook, we don't really see any immediate impacts on the portfolio from those areas in any material way. So we're hopeful that continues, but we will be vigilant.

Jana Galan

And then I also appreciate you kind of calling out the settlement and land sale and other nonrecurring items. I guess just as we think about next year, if you can kind of help us think any one-timers in '26 that could be either positive or negatively offset?

Vincent Chao

Yes. I mean that's the nature of the onetimers is hard to predict. Unfortunately, Jana, I wish I could tell you with a crystal ball there. But look, we always do have some of that stuff. So I mean, I wouldn't say it's not -- nonrecurring is not a good word. It's not predictable, but it is recurring. We do have that stuff come through every year, some amount. I just can't tell you exactly when it's going to hit. But if you look at historically, we've always had some fair amount of that, some years more than others.

I don't think there's anything to look into for next year that would particularly jump out at us as something meaningful. Yes. I think lease termination fees are in that bucket. We've talked about those more in the past, thankfully. We've talked about it less today, which is great. But we don't have as many of the really, really big sort of dark or paying or sublease tenants out there that created some very large swings in lease termination fees a couple of years ago. So we do think we'll have a similar level in '27 as '26 in terms of lease termination fees for the full year. Exactly when they hit, I can't really say.

Operator

Our next question is coming from Ronald Kamdem with Morgan Stanley.

Jenny Leeds

This is Jenny on for Ron. I think my first is I want to ask about the balance sheet. So think about the term loan swap reset to 3.55% in mid-November. Yes, maybe talk a little bit more on the impact of interest expenses next year? And how should we think about the refinancing upcoming?

Vincent Chao

Sure, sure. So I mean, one, we have very, very little floating rate debt following the swap in November, we'll have even less. And so the actual short-term rate movements that we're expecting and people are projecting increases on shouldn't really have much of an impact on our 2027 outlook. We do have a $350 million loan or bond, I should say, that comes due in December. That's at a 3.6% coupon. And so we would be hard-pressed to find a 3.6% coupon that had any sort of duration to it. And so there will be some drag from that in 2027. The range of options available to us, we could hit the term loan market again. It's not my preference.

Obviously, we do have unsecured bonds that we could issue anywhere you can pick your duration there, but 5-year bond would be probably in the 5-6, 5-7 range today. A 10-year bond would be more like [ 6%, 6.1%. ] So those are 2 extremes there. A lot of our peers in the space have been active in the convert market. That's something we have explored as well. So we could get a bit better coupon than the 5-year that I just mentioned on a convert. So those are all things that we are evaluating and watching. And just given the volatility in the markets with the 10-year moves that we've seen in the last couple of weeks and months and this year overall, we want to be nimble, and we want to be able to act quickly when the time is right.

Jenny Leeds

Very helpful. I guess the follow-up is on equities. So you do have about 25 million shares ATM program now and think about dividend yield moved to about 6%. So how should we think about going forward that you measure issuing equities versus using the lines from here?

Vincent Chao

Well, I mean, the equity and debt question is always a function of leverage, right? We're trying to maintain a leverage neutrality, targeting sort of 5.5x plus or minus. We're very close to that right now. And so we'll -- whatever we buy, we're going to do it on a leverage-neutral mix. As far as actual equity versus, say, dispositions or free cash flow, right now, one thing I really do think is a great advantage for us is that we don't have we don't -- we use less common equity as part of our acquisition plan year in, year out than most of our peers do.

So we rely on free cash flow and dispositions to fund a very large percentage of our investment activity. And so we don't have to enter the equity markets if we don't need to. And we are sitting on $200 million or so that was raised at just under $46 a share. So we feel pretty good about that equity that we raised already. And when you combine that with our sort of, call it, $600 million of annual acquisition volume that we can do without new equity, we probably have buying power in the, call it, $900 million to $1 billion-ish range. Whether or not we execute on that depends on if we get the price that makes sense to us. We're not just going to buy because our raised cost of equity or cost of capital is lower. It doesn't mean we're going to overpay for assets. So that's kind of how we're thinking about that.

Operator

Our next question is coming from Brad Heffern with RBC.

Brad Heffern

I wanted to check in on a couple of tenant things. First on CVS. I know it's not in the top 20 list anymore, but I assume you still own some. Any initial thoughts on the separation and how you would view that for the outlook there?

Vincent Chao

Yes. Look, I mean, it's pretty recent news. I mean, I think it's funny. I was a retail sell-side analyst covering CVS when they bought the PBM business and got into the insurance side of things, and it was this great deal, now they're unwinding it. I think as a landlord, it probably makes it simpler if you just have the retail business rather than having to worry about the insurance side as well. But we really don't have exposure to CVS. So we're not really -- I guess, we haven't thought about that much.

Brad Heffern

Okay. Got it. And then I was wondering if you could give an update on Dave & Buster's. Obviously, been some negative ratings outlook changes there. The debt is trading at a pretty penal level. I guess, do you have any coverage data on your locations? And then how would you be positioned if something were to happen there?

Vincent Chao

Yes. Look, Dave & Buster's is an entertainment company. It's going through a cycle right now, a downward shift in the cycle. So they've been posting less than great results for a while at the corporate level. I would say that at the property level, our coverages are still very healthy. And even at the corporate level, even though EBITDA margins have come down fairly significantly over the last say, 2 years or so, they're still relatively high. And so again, we think that we have priced those deals at a level where we can weather the current cycle. But we will want to see some improvement here relatively soon.

They do have a new management team in place. They do have a back-to-basics strategy in place. We think that will help them. But if the consumer is under pressure, then obviously, a concept like a Dave & Buster's will typically have a little bit more difficulty. But right now, again, we're not seeing anything in the numbers, anything in our property level that would cause us to have immediate concerns. But that's one we're watching closely.

Operator

Our next question is coming from Michael Goldsmith with UBS.

Michael Goldsmith

While we're talking about tenants, maybe can we talk a little bit about Camping World as well? Their third quarter adjusted EBITDA was down 62% year-over-year. I just wanted to get a sense of what you're seeing from that tenant in terms of coverage and how you're looking at it going forward.

Vincent Chao

Yes. So not to sound like a broken record, but yes, same kind of situation, obviously, a different market, but RVs are more cyclical business by nature. Consumer is under pressure. And this most recent quarter, which was this week, certainly reflected that. I think in the case of Camping World, they really have been doing everything they can to offset some of the pressures that they're seeing on the business near term.

So they had leaned into their used business for a long time, and that was a successful strategy. The used business has also seen some pressure most recent quarter. But they've also leaned into their insurance business, which is performing well and then seeing margin expansion. Even their used business saw margin expansion this quarter, even though the volumes were down. And I think the key there is they are doing whatever they can control, they are controlling. So they brought inventory down. It's as low as it's ever been like 5 or 6 years going into the fourth quarter. They have increased their SG&A sort of run rate improvements to $150 million annualized. So they're trying to control the controllables. And based on our property level performance, we don't really have any immediate concerns with them either. They're one of our longest tenured partners. So we have a very good relationship with them and no maturities for quite a while with these guys.

Michael Goldsmith

And then just my second question is just on the implied fourth quarter acquisitions. I know you've talked about being disciplined in today's market, but it implies a material deceleration. I just wanted to just say or ask about whether we should interpret that as like the right way to think about acquisition volume in the near term and then just the prospects for that reaccelerating next year, just given the evolving backdrop.

Stephen Horn

Yes. As far as the fourth quarter, we're in process of repricing the deals, and that's why we left it because we don't know at the end of the day, where it will fall out. So we're very comfortable putting the midpoint at that $750 million range. We're not giving any guidance for 2027 acquisition volume quite yet. But no, the pipeline, there's a lot of opportunities in it. And so it's a pretty big bandwidth, which way it goes.

Operator

Our next question is coming from Wes Golladay with Baird.

Wesley Golladay

For the buyers of the assets you're selling, are they coming back to you as well saying, "Hey, we want a little bit of a cap rate higher -- a little higher cap rate?'

Stephen Horn

The buyers that we're selling into. Currently, no. Most of it -- the 7.8% for the quarter was primarily what I would say, defensive sales of the portfolio, assets that we wanted to get rid of to strengthen the overall portfolio. That's why it was elevated. It wasn't because the sellers came back to change in cap rates. And then you factor in the accelerated depreciation buyers, the overall 1031 guys, they're still fairly low right now. They're incentivized to defer taxes more than anything than actually the price.

Wesley Golladay

Okay. And then I guess for the deals that you end up passing on or the seller walks away, do those never just come back to you if the rates were to come back, rates are volatile right now. So if the 10-year were to go high 4s, would those deals come back to you? Or do you think they're just gone for good for the majority of them?

Stephen Horn

No, it's not only if the rates back up, do they come back to us. It's if the seller actually realizes that's the new pricing of the deal, then they come back to us. So yes, those conversations are ongoing. There's sometimes you lose it, you change the price of a deal and the deal has gone forever because of egos. In some cases, the sophisticated seller will come back to you and understand that economics need to change. And if it's M&A, that seller is also rechanging his pricing on the M&A as far as the multiple he's probably pursuing.

Operator

Our next question is coming from John Massocca with B. Riley.

John Massocca

I know you kind of touched on it in terms of like where deals are kind of being kind of repriced that you had in the pipeline. But is that same kind of cap rate we get to by adding 30 to 40 basis points to 3Q reflective of what you see in the pipeline for '27? Or do you think yields can move even higher just given where rates ultimately kind of shaking out here?

Stephen Horn

Yes. I don't have a data set for '27 pipeline yet. So the deals might slip into the first quarter of '27 that we're pricing. But we're still a little bit close to the market shifting that we haven't seen a higher cap rate closing in the first quarter. But it is my expectation as sellers finally realize that cap rates need to go up. And again, that assumes a rational market of the institutions that are buying that lease assets.

John Massocca

Okay. And then on the disposition front, maybe I had 2 questions. Any color on kind of what made those rent-producing sales defensive? And then on the vacant assets, is that just kind of a hodgepodge of various things? Or is any of that kind of the very tail end of some of the tenant credit-related vacancy you had 2 years ago now?

Stephen Horn

Yes. The first part, a little bit of color. One of the assets we sold was a fitness center that was leased or I should say, re-leased to a noncredit tenant, very small. So we elected to divest out of that. That was a little bit higher of a cap rate. And then there was actually a leasehold position in there, which, by definition, leaseholds at a higher cap rate that skewed that number to the 7.8%. On the same turn, we had some that we sold in there that had 4 handles on them that were kind of rental equipment facilities. As far as the vacancy.

Vincent Chao

Yes. In terms of vacant sales, really, we don't have -- I think we're done with the tenants you're referring to from a couple of years ago are out of the portfolio in terms of the impact. I mean there's no -- there was not really anything tied to that.

Stephen Horn

I mean it was a hodgepodge.

Vincent Chao

I would say, too, on the cap rates the defensive nature that Steve talked about, they also had pretty limited term left. So very short-term deals.

Operator

Our next question is coming from Jim Kammert with Evercore.

James Kammert

I believe in a recent NACS show, some C-store executives were lamenting indications of stalling foot traffic coming into the stores and maybe impacting the higher-margin in-store sales. I'm curious, are you seeing any of that -- hearing any of that color from your C-store tenants and any translation to potential plateauing or moderation of the rent coverage?

Stephen Horn

You're spot on. The foot traffic has softened a little bit at the convenience stores. Our primary tenant is 7-Eleven as far as the C-store world. But as far as the margin softening inside the store, yes, they're going from 35% to the low 30s, but still highly profitable at the inside store sales and gallons are kind of remaining flat for the most part and still getting a decent healthy margin. But as far as the rent coverage deterioration, nothing that we're concerned with in the C-store world.

Operator

Our next question is coming from Marc Akinbi with Barclays.

Marc Akinbi

Just to tack on to a few that were already asked. I was wondering if you could elaborate on how you're thinking about residual value for your Dave & Buster's and Camping World properties in a worst-case scenario?

Vincent Chao

That's a pretty theoretical question. So I mean, I don't know if we really have a great answer on that. I mean I think it all depends on the location, obviously. And when it happened, what's going on in the rest of the market, I mean, it's a pretty hard answer -- question to answer. But if you want to know what the 10-year is going to be at December 31, I can tell you that. Joking.

Stephen Horn

As far as, I'll speak specifically to Camping World. Camping World, as Vin alluded to earlier, has been a long-term tenant of ours. And we do a lot of portfolio management with Camping World, where they will buy some assets back of markets they want to divest out of and at the same time, extend term on assets that we own. So our rent coverage, while it's not as healthy as it was in '21, '22, it's still fairly healthy at the Camping World. So we haven't got into the granular. But those are primarily land plays. So the land percentage of acquisition cost is fairly high, and they're good real estate, high visibility real estate.

As far as the Dave & Buster's, yes, they're big boxes. So that's why we try to avoid big boxes. But 50% of our Dave & Buster's assets were related to Main Event assets, which were a little bit smaller and the coverage is acceptable right now.

Operator

Our next question is coming from Spenser Glimcher with Green Street.

Spenser Allaway

Just 2 quick follow-ups on the credit losses, which I know you guys have noted have trended better than expected. So first, does that figure include any rent negotiations or restructurings? I don't believe it does. And then two, has there been much of that activity in '26, just given the solid health of the portfolio?

Vincent Chao

Yes. So in terms of our credit loss, yes, that's whatever we're owed if we got paid or not. So if it's renegotiated or there's a new lease in place, then that wouldn't fall into that bucket now. But it would show up in our rent recapture renewal rates and our re-leasing rates. So it'd show up in that metric. And as far as like restructurings of this year, nothing material.

Operator

[Operator Instructions] Our next question is coming from Jamie Feldman with Wells Fargo.

James Feldman

I guess since the news is fresh, as you thought about the potential for a Democratic sweep in the election last night or in terms last night, do you or your clients think anything might be different coming out of this, like when you think about the bingo card and [ planned ] your strategy? Or do you think it's just business as usual? Just wondering if there's anything we may not be thinking about that could come from this?

Stephen Horn

No, Jamie, our tenants are thinking it's business as usual. It's one thing it's the beauty of the long-term lease that we go through political cycles, interest rate cycles, so no, it's business as usual. NNN we'll keep focusing on the real estate metrics as the primary security of our investment.

Operator

As we have no further questions in queue at this time, I'd like to turn the call back over to Mr. Horn for any closing remarks.

Stephen Horn

Thanks. I appreciate you guys taking the time and interest in NNN. We're in a really good position. Looking forward to finishing out the year strong and getting the 2027 game plan all wrapped up. And we'll see the majority of you here in a couple of weeks at NAREIT. Thanks.

Operator

Thank you. Ladies and gentlemen, this does conclude today's call, and you may disconnect your lines at this time, and we thank you for your participation.