National Retail Properties (NNN) 8-K Increased Third Quarter Operating Results

Exhibit 99.1

NEWS RELEASE
For information contact:
Kevin B. Habicht
Chief Financial Officer
(407) 265-7348	FOR IMMEDIATE RELEASE
	November 4, 2008

INCREASED THIRD QUARTER OPERATING RESULTS

ANNOUNCED BY NATIONAL RETAIL PROPERTIES, INC.

Orlando, Florida, November 4, 2008 – National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, today announced operating results for the quarter ended September 30, 2008, including a 25.8% increase in revenues and an 8.7% increase in Funds From Operations (“FFO”) per share compared to the same period for 2007. Additionally, the company announced a 30.3% increase in revenues and a 6.3% increase in FFO per share for the nine months ended September 30, 2008 compared to the same period for 2007. Highlights include:

Operating Results:

• Revenues, net earnings and FFO available to common stockholders:

	Quarter Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007
	(in thousands, except per share data)
Revenues	$	58,573	$	46,564	$	169,495	$	130,122
Net earnings available to common stockholders	$	28,578	$	45,690	$	89,126	$	117,656
Net earnings per common share (diluted)	$	0.39	$	0.68	$	1.22	$	1.82
FFO available to common stockholders	$	36,707	$	30,872	$	110,334	$	91,963
FFO per common share (diluted)	$	0.50	$	0.46	$	1.51	$	1.42

• Investment Portfolio occupancy was 96.9% at September 30, 2008.

Investments and Dispositions for the quarter ended September 30, 2008:

• Investments:

• $68.1 million in the Investment Portfolio, including acquiring 36 properties with an aggregate 213,000 square feet of gross leasable area

• $4 million in the Inventory Portfolio, including acquiring two properties and funding $1.8 million of development

• Dispositions:

• Six Investment properties with an aggregate 172,000 square feet of gross leasable area, with net proceeds of $19.7 million, resulting in a gain of $2.6 million

• Nine Inventory properties with net proceeds of $51.6 million

450 S. Orange Ave., Suite 900 | Orlando, FL 32801 (800) NNN-REIT | www.nnnreit.com

Investments and Dispositions for the nine months ended September 30, 2008:

• Investments:

• $321.9 million in the Investment Portfolio, including acquiring 97 properties with an aggregate 811,000 square feet of gross leasable area

• $28.7 million in the Inventory Portfolio, including acquiring seven properties and funding $4.9 million of development

• Dispositions:

• 17 Investment properties with an aggregate 280,000 square feet of gross leasable area, with net proceeds of $56.5 million, resulting in a gain of $9.2 million

• 24 Inventory properties with net proceeds of $152.4 million

Capital transactions for the quarter ended September 30, 2008:

• Issued 915,239 shares of common stock generating $20.4 million of net proceeds pursuant to the Dividend Reinvestment and Stock Purchase Plan.

• Executed 3,450,000 common share offering September 26, 2008 priced at $23.05 per share generating net proceeds of $75.9 million. Proceeds received October 1, 2008 and not reflected in third quarter financial statements.

• In October 2008, the Company exercised its option to extend the maturity date of its $400 million bank credit facility from May 2009 to May 2010.

National Retail Properties also announced revised 2008 FFO guidance of $1.97 to $1.99 per share to account for the dilution from its recent 3,450,000 share common equity offering. This new guidance approximates 6% growth over 2007’s FFO of $1.87 per share. The Company announced 2009 FFO guidance of $1.88 to $1.98 per share, before deduction of estimated additional non-cash interest expense of approximately 8 cents per share due to changes required in accounting for convertible debt interest for fiscal years beginning after December 15, 2008. This equates to net earnings before any gains or losses from the sale on investment properties of $1.35 to $1.45 per share plus $0.53 per share of expected real estate related depreciation and amortization and before deduction of estimated additional non-cash interest expense of approximately 8 cents per share due to changes required in accounting for convertible debt interest for fiscal years beginning after December 15, 2008. This guidance is based on current plans and assumptions and subject to the risks and uncertainties more fully described in this press release and the company’s reports filed with the Securities and Exchange Commission.

Craig Macnab, Chief Executive Officer, commented: “We are pleased to maintain strong operating results despite the difficulties in the capital markets, economy and retailing. Our recently completed $76 million equity offering provides us with additional capacity to take advantage of potential opportunities even though it weighs on near term per share results. We are currently maintaining a cautious posture and are more focused on capital preservation than acquisitions. Budgeting with this level of economic uncertainty is more speculative than usual and we are taking a cautious approach on our occupancy assumptions for 2009. If the business environment improves, we will all be pleasantly surprised.”

National Retail Properties invests primarily in high-quality retail properties subject generally to long-term, net leases. As of September 30, 2008, the company owned 990 Investment properties in 44 states with a gross leasable area of approximately 11 million square feet. For more information on the company, visit www.nnnreit.com.

Management will hold a conference call on November 4, 2008 at 2:00 p.m. EDT to review these results. The call can be accessed on National Retail Properties, Inc. web site live athttp://www.nnnreit.com. For those unable to listen to the live broadcast, a replay will be available on the company’s web site. In addition, a summary of any earnings guidance given on the call will be posted to the company’s web site.

Statements in this press release that are not strictly historical are “forward-looking” statements. Forward-looking statements involve known and unknown risks, which may cause the company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, changes in interest rates, increases in operating costs, the availability of capital, and the profitability of the company’s taxable subsidiary. Additional information concerning these and other factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the company’s Securities and Exchange Commission (“SEC”) filings, including, but not limited to, the company’s Annual Report on Form 10-K. Copies of each filing may be obtained from the company or the SEC. Consequently, such forward-looking statements should be regarded solely as reflections of the company’s current operating plans and estimates. Actual operating results may differ

2

materially from what is expressed or forecast in this press release. National Retail Properties undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

The reported results are unaudited and there can be no assurance that the results will not vary from the final information for the quarter ended September 30, 2008. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.

Funds From Operations, commonly referred to as FFO, is a relative non-GAAP financial measure of operating performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by the National Association of Real Estate Investment Trusts and is used by the company as follows: net earnings (computed in accordance with GAAP) plus depreciation and amortization of assets unique to the real estate industry, excluding gains (or including losses) on the disposition of real estate held for investment, and the company’s share of these items from the company’s unconsolidated partnerships.

FFO is generally considered by industry analysts to be the most appropriate measure of performance of real estate companies. FFO does not necessarily represent cash provided by operating activities in accordance with GAAP and should not be considered an alternative to net earnings as an indication of the company’s performance or to cash flow as a measure of liquidity or ability to make distributions. Management considers FFO an appropriate measure of performance of an equity REIT because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time, and because industry analysts have accepted it as a performance measure. The company’s computation of FFO may differ from the methodology for calculating FFO used by other equity REITs, and therefore, may not be comparable to such other REITs.

The company has determined that there are earnings from discontinued operations in each of its segments, real estate held for investment and real estate held for sale. All property dispositions from the company’s held for investment segment are classified as discontinued operations. In addition, certain properties in the company’s held for sale segment that have generated revenues before disposition are classified as discontinued operations. The results of operations for prior periods for these properties now classified as discontinued operations have been restated to reflect the results in earnings from discontinued operations for comparability purposes. These adjustments resulted in a decrease in the company’s reported total revenues and total and per share earnings from continuing operations and an increase in the company’s earnings from discontinued operations. However, the company’s total and per share FFO and net earnings available to common stockholders are not affected.

3

National Retail Properties, Inc.

(In thousands, except per share data)

(unaudited)

	Quarter Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Income Statement Summary
Revenues:
Rental and earned income	$	54,966		$	42,701		$	157,697		$	118,929
Real estate expense reimbursement from tenants		1,456			1,339			4,478			4,034
Interest and other income from real estate transactions		1,027			1,389			3,669			3,636
Interest income on commercial mortgage residual interests		1,124			1,135			3,651			3,523
		58,573			46,564			169,495			130,122
Disposition of real estate, Inventory Portfolio:
Gross proceeds		—			—			4,900			825
Costs		—			—			(4,879	)		(493	)
Gain		—			—			21			332
Operating expenses:
General and administrative		5,242			5,229			18,842			17,496
Real estate		2,359			1,778			6,972			5,426
Depreciation and amortization		11,559			8,048			32,382			22,186
Impairment – real estate, Inventory Portfolio		—			128			—			128
Impairment – commercial mortgage residual interests valuation		—			638			758			638
		19,160			15,821			58,954			45,874
Other expenses (revenues):
Interest and other income		(818	)		(793	)		(3,047	)		(3,120	)
Interest expense		14,791			11,833			44,823			35,377
Loss on interest rate hedge		—			—			804			—
		13,973			11,040			42,580			32,257
Income tax benefit		1,654			1,488			6,075			6,703
Minority interest		(113	)		(93	)		654			244
Equity in earnings of unconsolidated affiliate		100			—			280			—
Earnings from continuing operations		27,081			21,098			74,991			59,270
Earnings from discontinued operations:
Real estate, Investment Portfolio		2,997			24,377			12,626			56,013
Real estate, Inventory Portfolio, net of income tax expense and minority interest		196			1,911			6,598			7,462
		3,193			26,288			19,224			63,475
Net earnings		30,274			47,386			94,215			122,745
Series C preferred stock dividends		(1,696	)		(1,696	)		(5,089	)		(5,089	)
Net earnings available to common stockholders – basic and diluted	$	28,578		$	45,690		$	89,126		$	117,656

4

National Retail Properties, Inc.

(In thousands, except per share data)

(unaudited)

	Quarter Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Weighted average common shares outstanding:
Basic		73,717			66,796			73,041			64,545
Diluted		74,022			67,029			73,311			64,768
Net earnings per share available to common stockholders:
Basic:
Continuing operations	$	0.35		$	0.29		$	0.96		$	0.84
Discontinued operations		0.04			0.39			0.26			0.98
Net earnings	$	0.39		$	0.68		$	1.22		$	1.82
Diluted:
Continuing operations	$	0.35		$	0.29		$	0.96		$	0.84
Discontinued operations		0.04			0.39			0.26			0.98
Net earnings	$	0.39		$	0.68		$	1.22		$	1.82
Supplemental Information:
Selected Non-Cash Income Statement Items:
Straight-line rent	$	151		$	(660	)	$	(978	)	$	(2,051	)
Net capital lease rent adjustment	$	296		$	471		$	899		$	1,753
Above (below) market rent amortization	$	(245	)	$	(299	)	$	(547	)	$	(531	)
Stock based compensation expense	$	926		$	657		$	2,418		$	1,970
Impairment – real estate	$	3,930		$	273		$	4,097		$	463
Impairment – mortgage residual interests	$	—		$	638		$	758		$	638
Amortization of debt costs	$	798		$	503		$	2,194		$	1,486
Capitalized interest expense	$	(436	)	$	(1,176	)	$	(1,408	)	$	(2,620	)
Non-real estate depreciation expense	$	65		$	113		$	200		$	254
Other Information:
Percentage rent	$	202		$	181		$	563		$	779
Net Inventory Portfolio gain on disposition (TRS)	$	2,807		$	2,822		$	9,357		$	9,206
Scheduled debt principal amortization (excluding maturities)	$	298		$	398		$	882		$	1,300

5

National Retail Properties, Inc.

(in thousands, except per share data)

(unaudited)

	Quarter Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Reconciliation of net earnings to FFO and FFO available to common stockholders:
Net earnings	$	30,274		$	47,386		$	94,215		$	122,745
Real estate depreciation and amortization:
Continuing operations		10,696			7,405			29,962			20,381
Discontinued operations		33			238			344			796
Joint venture real estate depreciation		44			3			132			3
Gain on disposition of real estate Investment Portfolio		(2,644	)		(22,464	)		(9,230	)		(46,873	)
FFO		38,403			32,568			115,423			97,052
Series C preferred stock dividends		(1,696	)		(1,696	)		(5,089	)		(5,089	)
FFO available to common stockholders – basic and diluted		36,707			30,872			110,334			91,963
FFO per share:
Basic	$	0.50		$	0.46		$	1.51		$	1.42
Diluted	$	0.50		$	0.46		$	1.51		$	1.42

Real Estate Disposition Summary

	Quarter Ended September 30,							Nine Months Ended September 30,
	2008			2007				2008				2007
	# of Properties	Gain		# of Properties	Gain			# of Properties	Gain			# of Properties	Gain
Gain on disposition from continuing and discontinued operations as reported:
Continuing operations	—	$	—	1	$	—		1	$	21		2	$	332
Discontinued operations:
Investment Portfolio	6		2,644	13		22,464		17		9,230		27		46,873
Inventory Portfolio	9		2,807	26		3,647		23		12,643		64		9,877
Minority interest, Inventory Portfolio	—		—	—		(825	)	—		(3,307	)	—		(1,003	)
	15	$	5,451	40	$	25,286		41	$	18,587		93	$	56,079
Reconciliation of gain on disposition by type:
Inventory Portfolio:
Development	1	$	192	2	$	1,650		5	$	8,057		10	$	4,464
Exchange	8		2,615	25		1,997		19		4,607		56		5,745
Minority interest, Development	—		—	—		(825	)	—		(3,307	)	—		(1,003	)
Total Inventory gain (TRS)	9		2,807	27		2,822		24		9,357		66		9,206
Investment Portfolio	6		2,644	13		22,464		17		9,230		27		46,873
	15	$	5,451	40	$	25,286		41	$	18,587		93	$	56,079

6

National Retail Properties, Inc.

(in thousands)

(unaudited)

Earnings from Discontinued Operations:In accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”), the company has classified its investment assets sold and leasehold interests expired subsequent to December 31, 2001, the effective date of SFAS No. 144, as discontinued operations. In addition, the company has classified any investment asset or revenue generating inventory asset that was held for sale at September 30, 2008, as discontinued operations. The following is a summary of earnings from discontinued operations.

	Quarter Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Earnings from Discontinued Operations – Investment Portfolio:
Revenues:
Rental and earned income	$	198		$	2,214		$	2,595		$	10,128
Real estate expense reimbursement from tenants		7			146			29			288
Interest and other income from real estate transactions		287			72			1,236			298
		492			2,432			3,860			10,714
Expenses:
General and administrative		—			1			(79	)		(45	)
Real estate		106			134			32			491
Depreciation and amortization		33			238			344			796
Impairment – real estate		—			146			167			335
Interest		—			—			—			(3	)
		139			519			464			1,574
Gain on disposition of real estate		2,644			22,464			9,230			46,873
Earnings from discontinued operations	$	2,997		$	24,377		$	12,626		$	56,013
Earnings from Discontinued Operations – Inventory Portfolio:
Revenues:
Rental income	$	2,648		$	1,479		$	8,882		$	6,538
Real estate expense reimbursement from tenants		301			129			857			590
Interest and other income from real estate transactions		109			95			895			140
		3,058			1,703			10,634			7,268
Disposition of real estate:
Gross proceeds		52,185			51,735			151,098			151,743
Costs		(49,378	)		(48,088	)		(138,455	)		(141,866	)
Gain		2,807			3,647			12,643			9,877
Expenses:
General and administrative		23			16			72			40
Real estate		395			235			1,274			1,035
Depreciation and amortization		53			12			164			44
Impairment – real estate		3,930			—			3,930			—
Interest		1,136			1,366			3,912			2,776
		5,537			1,629			9,352			3,895
Income tax expense		(120	)		(1,169	)		(4,037	)		(4,566	)
Minority interest		(12	)		(641	)		(3,290	)		(1,222	)
Earnings from discontinued operations	$	196		$	1,911		$	6,598		$	7,462

7

National Retail Properties, Inc.

(in thousands)

	September 30, 2008		December 31, 2007
	(unaudited)		(Note 1)
Balance Sheet Summary
Assets:
Cash and cash equivalents	$	2,514	$	27,499
Receivables, net of allowance		4,654		3,818
Investment in unconsolidated affiliate		4,853		4,139
Mortgages, notes and accrued interest receivable, net of allowance		66,646		73,162
Real estate, Investment Portfolio:
Accounted for using the operating method, net of accumulated depreciation and amortization		2,313,293		2,055,846
Accounted for using the direct financing method		31,545		37,497
Real estate, Inventory Portfolio, held for sale		126,223		248,611
Commercial mortgage residual interests		22,496		24,340
Accrued rental income, net of allowance		23,933		24,652
Other assets		41,813		40,041
Total assets	$	2,637,970	$	2,539,605
Liabilities:
Line of credit payable		53,000		129,800
Mortgages payable		26,598		27,480
Notes payable – secured		—		12,000
Notes payable – convertible		406,535		172,500
Notes payable, net of unamortized discount		618,432		718,290
Other liabilities		64,721		69,916
Total liabilities		1,169,286		1,129,986
Minority interest		1,101		2,334
Stockholders’ equity		1,467,583		1,407,285
Total liabilities and equity	$	2,637,970	$	2,539,605
Common shares outstanding		74,920		72,528
Gross leasable area, Investment Portfolio (square feet)		11,144		10,610

Note 1: Amounts are derived from audited consolidated financial statements included in the company’s Form 10-K, as amended.

8

Orange Avenue Mortgage Investments, Inc.

(in thousands)

In May 2005, the company acquired a 78.9 percent equity investment of OAMI for $9.4 million. The company’s 78.9 percent share of OAMI’s net cash flow has totaled over $26 million since May 2005. The following summary represents the balances related to OAMI included in the company’s Balance Sheet and Income Statement Summary:

	September 30, 2008		December 31, 2007
	(unaudited)		(Note 1)
Assets:
Cash and cash equivalents	$	78	$	15,541
Receivables and other assets		34		1,417
Commercial mortgage residual interests		22,496		24,340
	$	22,608	$	41,298
Liabilities:
Notes payable – secured	$	—	$	12,000
Income tax liability		5,514		6,768
Other liabilities		—		145
	$	5,514	$	18,913
Minority interest	$	514	$	1,895

	Quarter Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
Interest income on commercial mortgage residual interests	$	1,124		$	1,135		$	3,651		$	3,523
Interest and other income		7			257			217			1,389
		1,131			1,392			3,868			4,912
Expenses:
General and administrative		58			108			205			318
Amortization		—			51			35			166
Impairment – commercial mortgage residual interests valuation		—			638			758			638
Interest		—			575			200			1,807
		58			1,372			1,198			2,929
Income tax benefit		457			551			1,247			2,010
Minority interest		(188	)		(2	)		(507	)		(486	)
Net earnings	$	1,342		$	569		$	3,410		$	3,507

Note 1: Amounts are derived from audited consolidated financial statements included in the company’s Form 10-K, as amended.

9

NNN Retail Properties Fund I LLC

(dollars in thousands)

In September 2007, the company entered into a joint venture, NNN Retail Properties Fund I LLC, with an affiliate of Crow Holdings Realty Partners IV, L.P. The company owns a 15 percent equity interest, and the following summary represents the Balance Sheet and Income Statement Summary for the joint venture. The company’s investment in the joint venture is included in the company’s Balance Sheet Summary under “Investment in unconsolidated affiliate.”

	September 30, 2008		December 31, 2007
	(unaudited)
Assets:
Cash and cash equivalents	$	217	$	30
Receivables		1		—
Real estate		74,759		65,413
Other assets		1,813		921
	$	76,790	$	66,364
Liabilities:
Notes payable	$	43,600	$	38,600
Other liabilities		194		180
Total liabilities		43,794		38,780
Members’ equity		32,996		27,584
Total liabilities and equity	$	76,790	$	66,364
	Quarter Ended September 30, 2008		Nine Months Ended September 30, 2008
	(unaudited)		(unaudited)
Revenues:
Rental income	$	1,565	$	4,627
Expenses:
General and administrative		67		205
Real estate		5		14
Depreciation and amortization		362		1,077
Interest		528		1,647
		962		2,943
Net earnings	$	603	$	1,684

10

National Retail Properties, Inc.

Investment Portfolio

Top 20 Lines of Trade

		As of September 30,
	Line of Trade	2008 (1)		2007 (2)
1.	Convenience stores	25.5	%	23.8	%
2.	Restaurants – full service	8.8	%	10.3	%
3.	Automotive service	8.1	%	3.7	%
4.	Theaters	6.2	%	4.1	%
5.	Automotive parts	4.8	%	1.5	%
6.	Drug stores	4.0	%	5.5	%
7.	Books	4.0	%	4.7	%
8.	Consumer electronics	3.7	%	4.6	%
9.	Restaurants – limited service	3.4	%	3.9	%
10.	Sporting goods	3.2	%	4.4	%
11.	Family entertainment centers	3.0	%	2.3	%
12.	Grocery	2.7	%	3.7	%
13.	Office supplies	2.5	%	3.1	%
14.	Furniture	2.5	%	3.3	%
15.	Travel plazas	2.4	%	3.2	%
16.	Beer, wine and liquor	1.7	%	2.3	%
17.	General merchandise	1.6	%	1.9	%
18.	Home furnishings	1.4	%	1.6	%
19.	Craft, fabric and novelty	1.3	%	1.5	%
20.	Auto dealerships	1.3	%	2.3	%
	Other	7.9	%	8.3	%
	Total	100.0	%	100.0	%

Top 10 States

	State	% of Total(1)			State	% of Total(1)
1.	Texas	19.9	%	6.	Georgia	5.0	%
2.	Florida	10.1	%	7.	Indiana	4.2	%
3.	Illinois	6.8	%	8.	Pennsylvania	4.2	%
4.	North Carolina	6.1	%	9.	Colorado	3.1	%
5.	California	5.1	%	10.	Arizona	3.1	%

Lease Expirations

	% of Total(1)		# of Properties	Gross Leasable Area(3)		% of Total(1)		# of Properties	Gross Leasable Area(3)
2008	0.2	%	3	113,000	2014	4.4	%	33	514,000
2009	1.2	%	22	358,000	2015	2.6	%	19	463,000
2010	2.9	%	41	411,000	2016	1.9	%	15	287,000
2011	2.1	%	21	338,000	2017	4.4	%	26	739,000
2012	3.6	%	35	552,000	2018	3.2	%	25	438,000
2013	4.4	%	37	829,000	Thereafter	69.1	%	682	5,780,000

⁽¹⁾ Based on annual base rent of $216,782,000, which is the annualized base rent for all leases in place as of September 30, 2008.

⁽²⁾ Based on annual base rent of $184,940,000, which is the annualized base rent for all leases in place as of September 30, 2007.

⁽³⁾ Square feet.

11