For a sector known to just sit and collect rent, triple net REITs sure have a lot going on right now. Three factors have changed, making the sector particularly opportunistic. This article will discuss these fundamental factors and then detail 3 triple net REITs we find to be particularly well positioned for double digit returns. 3 Factors Reviving Triple Net Sector Cap rates have risen considerably Escalators are back Valuation is cheaper Higher cap rates When interest rates went down to 0 following COVI ...

Group 1 - The net lease sector has faced significant challenges in recent years, with some leading figures struggling to adapt [1] - Realty Income Corporation is highlighted as a prominent example within the net lease REIT space [1]

Part I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position, operations, and cash flows, reflecting asset growth and a significant net income decline [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets increased to **$5.33 billion** by June 30, 2025, due to rental property investments, while liabilities rose and equity slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$5,326,679** | **$5,216,417** | | Investment in rental property, net | $4,454,231 | $4,340,363 | | **Total Liabilities** | **$2,290,858** | **$2,074,993** | | Unsecured revolving credit facility | $197,880 | $93,014 | | Unsecured term loans, net | $994,028 | $897,201 | | **Total Equity** | **$3,035,821** | **$3,141,424** | [Condensed Consolidated Statements of Income and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income%20(Unaudited)) Net income significantly declined to **$37.3 million** for H1 2025, primarily due to lower real estate sale gains, despite increased lease revenues Key Income Statement Data (in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Lease revenues, net | $112,986 | $105,907 | $221,677 | $211,274 | | Total operating expenses | $69,088 | $56,463 | $139,873 | $135,727 | | Gain on sale of real estate | $566 | $3,384 | $971 | $62,515 | | Net income | $19,830 | $35,937 | $37,323 | $104,114 | | Diluted EPS | $0.10 | $0.19 | $0.19 | $0.53 | [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20(Unaudited)) Total equity decreased to **$3.04 billion** by June 30, 2025, primarily due to **$116.7 million** in distributions and a decline in other comprehensive income - Distributions declared for the six months ended June 30, 2025, totaled **$116.7 million** (**$58.9 million** in Q1 and **$57.9 million** in Q2)[13](index=13&type=chunk) - Accumulated other comprehensive income decreased by **$31.6 million** during the first half of 2025, mainly due to changes in the fair value of interest rate swap agreements[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash from operating activities was **$150.7 million** for H1 2025, with investing activities using **$216.6 million**, largely offset by financing inflows Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $150,739 | $145,039 | | Net cash used in investing activities | ($216,593) | ($21,423) | | Net cash provided by (used in) financing activities | $71,837 | ($124,352) | | **Net increase (decrease) in cash** | **$5,983** | **($736)** | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes provide detailed information supporting the financial statements, including company structure, property transactions, and financing arrangements - The company is an industrial-focused, diversified net lease REIT with a portfolio of **766 commercial properties** across 44 U.S. states and four Canadian provinces as of June 30, 2025[21](index=21&type=chunk) Investment Activity - Six Months Ended June 30 | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Acquisitions** | | | | Number of Properties | 13 | 22 | | Acquisition Price | $161.3M | $217.1M | | **Dispositions** | | | | Number of Properties | 11 | 40 | | Aggregate Sale Price | $21.0M | $276.1M | | Gain on Sale | $1.0M | $62.5M | - On February 28, 2025, the company amended its credit facility and entered into a new **$500 million** unsecured term loan, using the proceeds to repay its **$400 million** 2026 term loan and reduce revolving credit facility borrowings[71](index=71&type=chunk) - As of June 30, 2025, the company has commitments to fund six build-to-suit transactions with remaining obligations of **$238.8 million**, expected to be funded through August 2026[102](index=102&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a diversified and **99.1% leased** portfolio, AFFO growth, and strong liquidity [Overview](index=35&type=section&id=Overview) The company, an industrial-focused REIT, outlines its growth strategy centered on portfolio performance and strong liquidity - The company's growth strategy is based on four core building blocks: (1) same-store NOI growth from rent escalations and portfolio management, (2) revenue-generating capex, (3) build-to-suit developments, and (4) a diversified acquisition pipeline[116](index=116&type=chunk)[119](index=119&type=chunk) [Real Estate Portfolio Information](index=39&type=section&id=Real%20Estate%20Portfolio%20Information) The company's real estate portfolio is highly diversified and **99.1% leased**, with a long weighted average lease term and contractual rent escalations Portfolio Diversification by Property Type (% of ABR) | Property Type | % of ABR | | :--- | :--- | | Industrial | 60.7% | | Retail | 31.0% | | Other (Office, Clinical) | 8.3% | - The portfolio is occupied by **205 different tenants** across **56 industries**, with the top 10 tenants representing **21.8%** of ABR[120](index=120&type=chunk)[129](index=129&type=chunk) - Leases have a weighted average remaining term of **9.7 years**, and **97.5%** of leases by ABR have contractual rent escalations, averaging a **2.0%** annual increase[120](index=120&type=chunk)[140](index=140&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) H1 2025 lease revenues increased, but net income sharply declined due to lower property sale gains and higher interest expense Comparison of Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total lease revenues, net | $221,677 | $211,274 | +4.9% | | Gain on sale of real estate | $971 | $62,515 | -98.4% | | Total operating expenses | $139,873 | $135,727 | +3.1% | | Interest expense | ($41,186) | ($36,334) | +13.4% | | **Net income** | **$37,323** | **$104,114** | **-64.2%** | - The significant decrease in net income for H1 2025 compared to H1 2024 is primarily attributable to a **$61.5 million** reduction in gains from property sales[161](index=161&type=chunk)[163](index=163&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with substantial credit facility capacity, a healthy leverage ratio, and no material debt maturities until 2027 - The company seeks to maintain a Leverage Ratio (Net Debt to Annualized Adjusted EBITDAre) of less than **6.0x**; as of June 30, 2025, this ratio was **5.3x**[165](index=165&type=chunk)[204](index=204&type=chunk) - As of June 30, 2025, the company had **$802.1 million** of available capacity under its **$1.0 billion** unsecured revolving credit facility[169](index=169&type=chunk) - The company has no material debt maturities until 2027[171](index=171&type=chunk) Contractual Obligations for Remainder of 2025 (in thousands) | Obligation Type | Amount | | :--- | :--- | | Mortgages & Term Loans | $19,015 | | Interest Expense (projected) | $41,637 | | Dividends (declared) | $58,451 | | Commitments to Fund Investments | $137,209 | | Lessee Obligations | $759 | | **Total** | **$257,071** | [Non-GAAP Measures](index=57&type=section&id=Non-GAAP%20Measures) Key non-GAAP metrics show H1 2025 AFFO increased, demonstrating core operational growth and a stable leverage profile Non-GAAP Performance Metrics (in thousands) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | FFO | $146,322 | $146,861 | | Core FFO | $152,430 | $147,073 | | AFFO | $146,120 | $141,276 | Leverage Ratios as of June 30, 2025 | Ratio | Value | | :--- | :--- | | Net Debt to Annualized EBITDAre | 5.5x | | Net Debt to Annualized Adjusted EBITDAre | 5.3x | | Pro Forma Net Debt to Annualized Adjusted EBITDAre | 5.2x | [Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk on variable-rate debt through swaps, while foreign currency risk from Canadian investments is naturally hedged - A **1%** increase or decrease in interest rates would result in a corresponding **$0.5 million** change in annual interest expense, after accounting for interest rate swaps[209](index=209&type=chunk) - A **10%** change in the USD/CAD exchange rate would lead to a **$7.3 million** unrealized foreign currency gain or loss on its Canadian dollar borrowings, which acts as a natural hedge against its Canadian investments[211](index=211&type=chunk) [Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[212](index=212&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[213](index=213&type=chunk) Part II - OTHER INFORMATION [Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect - The company reports no material legal proceedings[214](index=214&type=chunk) [Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors have been identified since the last annual and quarterly reports - No material changes to risk factors have been identified since the last annual and quarterly reports[215](index=215&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[218](index=218&type=chunk) [Other Information](index=64&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated a Rule 10b5-1 trading plan or related trading arrangement during the period - No officers or directors adopted or terminated a Rule 10b5-1 trading plan[221](index=221&type=chunk) [Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files

Financial Data and Key Metrics Changes - The company raised its full year 2025 AFFO guidance to $1.48 to $1.50 per share, reflecting a 4.2% growth at the midpoint, with a second quarter AFFO per share of $0.38, representing a 5.6% increase compared to 2024 [4][34] - Year-to-date bad debt totaled 45 basis points, and the bad debt reserve for the remainder of the year was reduced from 125 basis points to 75 basis points [34][80] Business Line Data and Key Metrics Changes - The company has invested approximately $262.2 million in new property acquisitions, build-to-suit developments, transitional capital, and revenue-generating CapEx [24] - The build-to-suit pipeline includes eight projects totaling over $370 million, expected to generate $28 million of new incremental ABR through 2026, representing a growth of 6.9% off the current ABR [15][26] Market Data and Key Metrics Changes - The company reported a 99.1% lease rate at quarter end, with only two of its 766 properties vacant, and collected 99.6% of base rents due for the quarter, a 60 basis point increase compared to Q2 2024 [31] - The company has closed $113.7 million in new property acquisitions with a weighted average initial cash cap rate of 7.2% [30] Company Strategy and Development Direction - The company is focused on a differentiated growth strategy, emphasizing build-to-suit projects and relationship-based acquisitions to mitigate competition [15][56] - The management team has successfully repositioned the portfolio, reducing clinical healthcare exposure to 2.4% of ABR, while still growing AFFO per share [6][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage through tenant credit events, citing successful resolutions in the past [8][80] - The company anticipates attractive mid-single-digit AFFO per share growth in 2026 and beyond, supported by a strong portfolio and committed pipeline [20][21] Other Important Information - The company plans to host an Investor Day on December 2, 2025, to discuss its differentiated strategy and preliminary guidance for 2026 [22] - The Board of Directors declared a $0.29 dividend per share, payable on or before October 15, 2025 [34] Q&A Session Summary Question: Plans for incremental developments in 2025 - The company still aims for $500 million in incremental developments in 2025, focusing on long-term growth [39] Question: Details on acquisitions under control - The acquisitions under control are primarily industrial deals with expected cap rates around 7%, and most are anticipated to close in the third quarter [44][45] Question: Impact of accelerated depreciation on deals - There has been excitement in the market regarding accelerated depreciation, particularly in sectors like car washes, which may drive additional deal flow [48] Question: Competition in build-to-suit projects - The company is not filtering out opportunities but is focused on maximizing the number of deals to choose from, ensuring the best risk-adjusted returns [50] Question: Insights on bad debt guidance - The reduction in bad debt guidance is due to positive resolutions with tenants like Zips, At Home, and Claire's, along with strong performance from the rest of the portfolio [79]

Company Performance - Broadstone Net Lease, Inc. (BNL) reported quarterly funds from operations (FFO) of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.37 per share, and up from $0.36 per share a year ago, representing an FFO surprise of +2.70% [1] - The company posted revenues of $112.99 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.23%, compared to year-ago revenues of $105.91 million [2] - Over the last four quarters, Broadstone Net Lease has surpassed consensus revenue estimates three times [2] Future Outlook - The sustainability of the stock's immediate price movement will depend on management's commentary during the earnings call and future FFO expectations [3] - The current consensus FFO estimate for the coming quarter is $0.37 on revenues of $113.73 million, and for the current fiscal year, it is $1.47 on revenues of $450.58 million [7] - The estimate revisions trend for Broadstone Net Lease was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The REIT and Equity Trust - Residential industry, to which Broadstone Net Lease belongs, is currently in the top 35% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8]

[About the Data](index=3&type=section&id=About%20the%20Data) The report data is as of and for the three months ended June 30, 2025, unless otherwise specified, and should be read in conjunction with company filings - The report data is as of and for the three months ended June 30, 2025, unless otherwise specified. It should be read in conjunction with the company's 10-K and 10-Q filings[9](index=9&type=chunk) - The document contains forward-looking statements subject to various risks and uncertainties, including economic conditions, inflation, interest rates, and tenant financial health. Readers are cautioned not to place undue reliance on these statements[10](index=10&type=chunk)[11](index=11&type=chunk) [Company Overview](index=4&type=section&id=Company%20Overview) Broadstone Net Lease, Inc. (NYSE: BNL) is an industrial-focused, diversified net lease REIT investing in single-tenant commercial properties with creditworthy tenants and long-term net leases - Broadstone Net Lease, Inc. (NYSE: BNL) is an industrial-focused, diversified net lease REIT. It primarily invests in single-tenant commercial real estate properties, focusing on industrial and retail sectors with creditworthy tenants and long-term net leases[13](index=13&type=chunk) - The company's strategy targets properties that are integral to tenants' businesses, allowing tenants to allocate capital to core operations instead of real estate ownership[13](index=13&type=chunk) - Key leadership includes John D. Moragne as Chief Executive Officer and Laurie A. Hawkes as Chairman of the Board[14](index=14&type=chunk) [Financial Performance](index=5&type=section&id=Financial%20Performance) The company's financial performance in Q2 2025 showed revenue growth and increased FFO/AFFO per share, despite a decline in net income due to impairment provisions [Quarterly Financial Summary](index=5&type=section&id=Quarterly%20Financial%20Summary) In Q2 2025, Broadstone Net Lease reported revenues of **$113.0 million** and net income of **$19.8 million**, with Core FFO per share at **$0.39** and AFFO per share at **$0.38** Q2 2025 Key Financial Metrics (in thousands, except per share data) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $112,986 | $108,690 | $105,907 | +6.7% | | Net Income | $19,830 | $17,493 | $35,937 | -44.8% | | FFO per share, diluted | $0.37 | $0.37 | $0.37 | No Change | | Core FFO per share, diluted | $0.39 | $0.38 | $0.37 | +5.4% | | AFFO per share, diluted | $0.38 | $0.36 | $0.36 | +5.6% | | Distributions declared per diluted share | $0.290 | $0.290 | $0.290 | No Change | - Total assets increased to **$5.33 billion** as of June 30, 2025, up from **$5.26 billion** a year prior[16](index=16&type=chunk) - Net cash provided by operating activities was **$79.3 million** for the quarter, an increase from **$74.2 million** in Q2 2024[16](index=16&type=chunk) [Balance Sheet](index=6&type=section&id=Balance%20Sheet) As of June 30, 2025, the company's balance sheet shows total assets of **$5.33 billion**, supported by **$3.04 billion** in total equity, with total liabilities at **$2.29 billion** Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Investment in rental property, net | $4,454,231 | $4,340,363 | | Cash and cash equivalents | $20,784 | $14,845 | | Total assets | $5,326,679 | $5,216,417 | | **Liabilities & Equity** | | | | Total liabilities | $2,290,858 | $2,074,993 | | Total equity | $3,035,821 | $3,141,424 | - The primary liability components include **$994.0 million** in unsecured term loans and **$846.4 million** in senior unsecured notes, net of costs[17](index=17&type=chunk) [Income Statement Summary](index=7&type=section&id=Income%20Statement%20Summary) For the three months ended June 30, 2025, BNL generated **$113.0 million** in lease revenues, with net income of **$20.2 million** and a **$11.9 million** provision for impairment Q2 2025 Income Statement (in thousands) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Lease revenues, net | $112,986 | $105,907 | | Total operating expenses | $69,088 | $56,463 | | *Provision for impairment* | *$11,939* | *$3,852* | | Interest expense | $21,112 | $17,757 | | Net income attributable to BNL | $20,160 | $35,329 | | Diluted EPS | $0.10 | $0.19 | - Depreciation and amortization expense was **$42.6 million** in Q2 2025, an increase from **$37.4 million** in Q2 2024[18](index=18&type=chunk) [Funds From Operations (FFO), Core FFO, and Adjusted Funds From Operations (AFFO)](index=8&type=section&id=Funds%20From%20Operations%20%28FFO%29%2C%20Core%20Funds%20From%20Operations%20%28Core%20FFO%29%2C%20and%20Adjusted%20Funds%20From%20Operations%20%28AFFO%29) The company reported strong non-GAAP performance metrics for Q2 2025, with FFO at **$73.7 million**, Core FFO at **$77.2 million**, and AFFO at **$74.3 million**, reflecting adjustments for depreciation and foreign exchange losses Reconciliation of Net Income to AFFO for Q2 2025 (in thousands) | Metric | Amount | | :--- | :--- | | Net income | $19,830 | | Real property depreciation and amortization | $42,492 | | Provision for impairment | $11,939 | | **FFO** | **$73,695** | | Other (income) expenses (incl. FX loss) | $3,445 | | **Core FFO** | **$77,150** | | Straight-line rent adjustment | ($5,586) | | Stock-based compensation | $2,471 | | **AFFO** | **$74,308** | - A significant adjustment in the quarter was a **$3.4 million** unrealized and realized foreign exchange loss, primarily from Canadian dollar denominated revolver borrowings[20](index=20&type=chunk) [Lease Revenues Detail](index=9&type=section&id=Lease%20Revenues%20Detail) Total lease revenues of **$113.0 million** in Q2 2025 were primarily composed of **$101.0 million** in contractual rental amounts, with a **$5.8 million** straight-line rent adjustment Q2 2025 Lease Revenue Components (in thousands) | Component | Amount | | :--- | :--- | | Contractual rental amounts billed (operating leases) | $101,014 | | Straight-line rent adjustment | $5,753 | | Operating expenses billed to tenants | $4,795 | | Other income/adjustments | $1,424 | | **Total lease revenues, net** | **$112,986** | [Capitalization and Debt Management](index=10&type=section&id=Capitalization%20and%20Debt%20Management) The company maintains a conservative capital structure with predominantly fixed-rate, unsecured debt, and a well-staggered maturity profile [Capital Structure](index=10&type=section&id=Capital%20Structure) As of June 30, 2025, BNL's total capitalization was approximately **$5.3 billion**, with a conservative structure of **59.9% equity** and **40.1% debt** Capitalization as of June 30, 2025 (in thousands) | Component | Amount | % of Total | | :--- | :--- | :--- | | Implied Equity Market Capitalization | $3,170,389 | 59.9% | | Total Debt | $2,123,612 | 40.1% | | **Total Capitalization** | **$5,294,001** | **100.0%** | - The company's debt profile is heavily weighted towards **fixed-rate (97.7%)** and **unsecured (96.4%)** obligations, minimizing exposure to interest rate volatility and maintaining a large unencumbered asset pool[25](index=25&type=chunk) [Equity Rollforward](index=11&type=section&id=Equity%20Rollforward) During the first half of 2025, the total number of diluted shares increased slightly from **197.3 million** to **197.5 million**, primarily due to restricted stock grants Change in Total Diluted Shares (in thousands) | Description | Total Diluted Shares | | :--- | :--- | | Balance, January 1, 2025 | 197,272 | | Net activity in H1 2025 | +260 | | **Balance, June 30, 2025** | **197,532** | [Debt Outstanding](index=12&type=section&id=Debt%20Outstanding) As of June 30, 2025, total debt outstanding was **$2.12 billion**, comprising a revolving credit facility, unsecured term loans, senior unsecured notes, and mortgages Debt Composition as of June 30, 2025 (in thousands) | Debt Type | Amount | | :--- | :--- | | Unsecured revolving credit facility | $197,880 | | Unsecured term loans | $1,000,000 | | Senior unsecured notes | $850,000 | | Mortgages | $75,732 | | **Total** | **$2,123,612** | - The company refinanced its 2026 Unsecured Term Loan on February 28, 2025, using funds from the newly established 2028 Unsecured Term Loan[29](index=29&type=chunk) [Interest Rate Swaps](index=14&type=section&id=Interest%20Rate%20Swaps) As of June 30, 2025, BNL held interest rate swaps with a total notional amount of **$1.35 billion** to manage interest rate risk, with a weighted average maturity of **3.6 years** Interest Rate Swap Summary as of June 30, 2025 | Swap Type | Notional Amount (thousands) | Fair Value (thousands) | | :--- | :--- | :--- | | Effective Swaps | $1,148,080 | $19,069 | | Forward Starting Swaps | $205,000 | ($3,204) | | **Total Swaps** | **$1,353,080** | **$15,865** | - The weighted average maturity for effective swaps is **3.3 years**, and for the combined effective and forward-starting swaps, it is **3.6 years**[31](index=31&type=chunk) - The weighted average interest rate on all outstanding borrowings was **3.89%**, inclusive of a weighted average fixed rate on effective interest rate swaps of **2.62%**[32](index=32&type=chunk) [EBITDA, EBITDAre, and Other Non-GAAP Operating Measures](index=16&type=section&id=EBITDA%2C%20EBITDAre%2C%20and%20Other%20Non-GAAP%20Operating%20Measures) For Q2 2025, the company reported EBITDAre of **$95.1 million** and Adjusted EBITDAre of **$98.2 million**, with Annualized Adjusted Cash NOI reaching **$402.0 million** Q2 2025 Non-GAAP Operating Measures (in thousands) | Metric | Q2 2025 | Annualized | | :--- | :--- | :--- | | EBITDAre | $95,089 | $380,356 | | Adjusted EBITDAre | $98,242 | $392,968 | | Pro Forma Adjusted EBITDAre | $99,871 | $399,484 | | Adjusted Net Operating Income (NOI) | $107,766 | $431,064 | | Adjusted Cash NOI | $100,504 | $402,016 | - Adjustments to EBITDAre to arrive at Adjusted EBITDAre include normalizing for investment and disposition activity, and excluding items like foreign exchange losses and other non-recurring expenses[34](index=34&type=chunk) [Net Debt Metrics & Covenants](index=17&type=section&id=Net%20Debt%20Metrics%20%26%20Covenants) As of June 30, 2025, the company's Net Debt was **$2.1 billion**, with Net Debt to Annualized Adjusted EBITDAre at **5.3x**, and compliance with all financial covenants Leverage Ratios as of June 30, 2025 | Ratio | Value | | :--- | :--- | | Net Debt to Annualized EBITDAre | 5.5x | | Net Debt to Annualized Adjusted EBITDAre | 5.3x | | Pro Forma Net Debt to Annualized Adjusted EBITDAre | 5.2x | - The company is in compliance with its key financial covenants, such as the leverage ratio (**0.34** vs. required ≤ **0.60**) and fixed charge coverage ratio (**4.23** vs. required ≥ **1.50**)[39](index=39&type=chunk) [Debt & Swap Maturities](index=19&type=section&id=Debt%20%26%20Swap%20Maturities) The company maintains a well-staggered debt maturity profile with a weighted average maturity of **4.2 years**, and no significant maturities until 2027 - The weighted average debt maturity is **4.2 years**, assuming the exercise of extension options on its revolving credit facility and 2028 term loan[41](index=41&type=chunk)[42](index=42&type=chunk) - The company has a manageable near-term maturity schedule, with only **$19.0 million** due in 2025 and **$16.8 million** in 2026[30](index=30&type=chunk) - The weighted average maturity of effective swaps is **3.3 years**, and when including forward-starting swaps, it extends to **3.6 years**[44](index=44&type=chunk) [Investment and Disposition Activity](index=21&type=section&id=Investment%20and%20Disposition%20Activity) The company actively manages its portfolio through strategic investments in acquisitions and build-to-suit developments, alongside dispositions of non-core assets [Investment Activity](index=21&type=section&id=Investment%20Activity) Year-to-date 2025, BNL invested **$229.1 million** across acquisitions, build-to-suit developments, and transitional capital, primarily in the industrial sector YTD 2025 Investment Summary (dollars in thousands) | Investment Type | Amount | Properties/Transactions | | :--- | :--- | :--- | | Acquisitions | $113,726 | 7 Properties | | Build-to-suit developments | $89,789 | - | | Transitional capital | $22,781 | 2 Transactions | | **Total investments** | **$229,131** | | - Acquisitions year-to-date had a weighted average initial cash capitalization rate of **7.1%** and a weighted average lease term of **12.2 years**[46](index=46&type=chunk) [Built-to-Suit Development Projects](index=22&type=section&id=Built-to-Suit%20Development%20Projects) As of June 30, 2025, the company has an in-process build-to-suit development pipeline with an estimated total project investment of **$329.6 million** In-Process Development Pipeline Summary (dollars in thousands) | Metric | Value | | :--- | :--- | | Number of Projects | 6 | | Total Rentable Square Feet | 1,959 | | Estimated Total Project Investment | $329,558 | | Cumulative Investment to Date | $90,719 | | Remaining Investment | $238,838 | | Weighted Average Est. Cash Cap Rate | 7.5% | [Transitional Capital](index=23&type=section&id=Transitional%20Capital) In Q2 2025, the company made two preferred equity transitional capital investments totaling **$75.0 million** in retail and industrial properties - Invested **$52.7 million** in preferred equity for a St. Louis, MO retail center with a 2-year term and an **8.0%** stabilized cash capitalization rate[52](index=52&type=chunk) - Invested **$22.3 million** in preferred equity for an industrial park in Olyphant, PA, designated for build-to-suit development, with a 3-year term and a **7.8%** stabilized cash capitalization rate[52](index=52&type=chunk)[53](index=53&type=chunk) [Dispositions](index=24&type=section&id=Dispositions) Year-to-date 2025, BNL disposed of **11 properties** for a total price of **$20.5 million**, with a weighted average cash capitalization rate of **9.4%** YTD 2025 Disposition Summary (dollars in thousands) | Metric | Value | | :--- | :--- | | Number of Properties | 11 | | Disposition Price | $20,483 | | Net Book Value | $26,430 | | Weighted average cash cap rate | 9.4% | [Portfolio Overview and Diversification](index=24&type=section&id=Portfolio%20Overview%20and%20Diversification) The company's portfolio is highly diversified by property type, tenant, industry, and geography, maintaining high occupancy and a long weighted average lease term [Portfolio at a Glance: Key Metrics](index=24&type=section&id=Portfolio%20at%20a%20Glance%3A%20Key%20Metrics) As of June 30, 2025, the portfolio consisted of **766 properties** with **99.1% occupancy** and a weighted average remaining lease term of **9.7 years** Key Portfolio Metrics as of June 30, 2025 | Metric | Value | | :--- | :--- | | Properties | 766 | | Occupancy (based on SF) | 99.1% | | Rent Collection | 99.6% | | Weighted average remaining lease term | 9.7 years | | Top 10 tenant concentration | 21.8% | | Investment grade (tenant/guarantor) | 20.7% | [Diversification: Tenants and Brands](index=29&type=section&id=Diversification%3A%20Tenants%20and%20Brands) The portfolio demonstrates strong tenant diversification with the top 10 tenants accounting for **21.8%** of total ABR, and the largest tenant representing **4.0%** - The top 10 tenants represent **21.8%** of total Annualized Base Rent (ABR), and the top 20 tenants represent **35.2%**[62](index=62&type=chunk) - The top three tenants by ABR are Roskam Baking Company (**4.0%**), United Natural Foods, Inc. (**3.6%**), and AHF, LLC (**2.4%**)[62](index=62&type=chunk) [Diversification: Property Type](index=31&type=section&id=Diversification%3A%20Property%20Type) The portfolio is heavily weighted towards industrial properties, which constitute **60.7%** of ABR and **81.5%** of total square footage, reflecting a strategic focus Portfolio Breakdown by Property Type (% of ABR) | Property Type | % of ABR | | :--- | :--- | | Industrial | 60.7% | | Retail | 31.0% | | Other | 8.3% | - Within the industrial segment, the largest sub-types are Distribution & Warehouse (**19.1%** of ABR) and Manufacturing (**17.6%** of ABR)[73](index=73&type=chunk) [Key Statistics by Property Type](index=32&type=section&id=Key%20Statistics%20by%20Property%20Type) The portfolio's allocation to industrial properties increased from **56.0%** to **60.7%** of ABR year-over-year, aligning with the company's strategic focus on industrial assets Change in ABR % by Property Type (YoY) | Property Type | Q2 2025 ABR % | Q2 2024 ABR % | | :--- | :--- | :--- | | Industrial | 60.7% | 56.0% | | Retail | 31.0% | 31.8% | | Other | 8.3% | 12.2% | - Industrial properties have a weighted average lease term of **10.5 years** and an average annual rent escalation of **2.1%**[74](index=74&type=chunk) [Diversification: Tenant Industry](index=33&type=section&id=Diversification%3A%20Tenant%20Industry) The portfolio is diversified across **56 tenant industries**, with the top three being Restaurants (**13.6%**), Packaged Foods & Meats (**12.7%**), and Food Distributors (**6.8%**) Top 5 Tenant Industries by ABR % | Tenant Industry | % of Total ABR | | :--- | :--- | | Restaurants | 13.6% | | Packaged Foods & Meats | 12.7% | | Food Distributors | 6.8% | | Healthcare Facilities | 5.3% | | Auto Parts & Equipment | 5.2% | [Diversification: Geography](index=34&type=section&id=Diversification%3A%20Geography) The company's portfolio is geographically diversified across **44 U.S. states** and **4 Canadian provinces**, with Texas (**9.5%**) as the largest state exposure - The portfolio is primarily located in the U.S. (**98.0%** of ABR), with a minor presence in Canada (**2.0%** of ABR)[77](index=77&type=chunk) Top 5 State Exposures by ABR % | State | % of Total ABR | | :--- | :--- | | Texas (TX) | 9.5% | | Michigan (MI) | 9.1% | | Florida (FL) | 6.6% | | Illinois (IL) | 5.7% | | California (CA) | 5.5% | [Lease Expirations](index=35&type=section&id=Lease%20Expirations) The portfolio has a well-laddered lease expiration schedule with minimal near-term risk, with only **0.8%** of ABR expiring in 2025 and **3.0%** in 2026 Near-Term Lease Expirations (% of Total ABR) | Expiration Year | ABR as a % of Total Portfolio | | :--- | :--- | | 2025 | 0.8% | | 2026 | 3.0% | | 2027 | 6.5% | | 2028 | 4.9% | | 2029 | 4.6% | - A significant portion of the portfolio's ABR (**68.9%**) expires in 2030 or later[81](index=81&type=chunk) [Portfolio Occupancy](index=36&type=section&id=Portfolio%20Occupancy) The portfolio maintains a very high occupancy rate of **99.1%** by rentable square footage as of June 30, 2025, with stable vacant properties - Portfolio occupancy by rentable square footage was **99.1%** as of June 30, 2025[82](index=82&type=chunk)[59](index=59&type=chunk) - The number of vacant properties remained at **2** at the end of Q2 2025, unchanged from the beginning of the year, as **7** lease expirations were balanced by **4** leasing activities and **3** vacant property dispositions[84](index=84&type=chunk) [Definitions and Explanations](index=37&type=section&id=Definitions%20and%20Explanations) This section provides detailed definitions for non-GAAP financial measures and key operational metrics used throughout the report - This section provides detailed definitions for non-GAAP financial measures used throughout the report, including FFO, Core FFO, AFFO, EBITDAre, Adjusted EBITDAre, and Adjusted NOI[86](index=86&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - It also clarifies the calculation methods for key operational metrics such as Annualized Base Rent (ABR), Cash Capitalization Rate, Occupancy, and various terms related to development properties[88](index=88&type=chunk)[89](index=89&type=chunk)[93](index=93&type=chunk)[96](index=96&type=chunk)

Core Viewpoint - Broadstone Net Lease (NYSE: BNL) is highlighted as a promising investment opportunity within the non-popular REIT sector, suggesting it deserves greater recognition and a higher valuation multiple due to its potential [1]. Company Insights - The company is undergoing reorganization initiatives, which may contribute to the market's modest sentiment towards it [1]. - The author emphasizes the importance of dividend investing as a strategy for achieving financial freedom, indicating that Broadstone Net Lease plays a role in this investment approach [1]. Investment Strategy - The focus on dividend investing is presented as an accessible path for individuals seeking to build long-term wealth, with insights shared to demystify the process [1]. - The author’s background in M&A and business valuation supports the analysis of Broadstone Net Lease, as it involves evaluating the company's financial health and potential for growth [1].

Group 1 - The article promotes iREIT on Alpha as a source for in-depth research on various income alternatives including REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs [1] - It highlights the positive feedback from users, with 438 testimonials, most rated 5 stars, indicating high satisfaction with the service [1] Group 2 - The article includes a disclosure stating that the author has no stock or derivative positions in any mentioned companies and has no plans to initiate such positions in the near future [2] - It clarifies that the opinions expressed are solely those of the author and not influenced by any business relationships with the companies mentioned [2] Group 3 - Seeking Alpha emphasizes that past performance does not guarantee future results and that no specific investment recommendations are provided [3] - The article notes that the views expressed may not reflect those of Seeking Alpha as a whole, highlighting the diversity of opinions among its analysts [3]

Group 1 - The market is currently in a risk-on mode, with the S&P 500 and Nasdaq Composite Index nearing all-time highs [2] - The focus is on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] Group 2 - The article emphasizes the importance of defensive stocks for medium- to long-term investment horizons [2]

Core Viewpoint - Broadstone Net Lease, Inc. (BNL) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, particularly influenced by institutional investors who adjust their valuations based on these estimates [4][6]. - Rising earnings estimates for Broadstone Net Lease indicate an improvement in the company's underlying business, suggesting that investors may respond positively by driving the stock price higher [5][10]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - Broadstone Net Lease's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Broadstone Net Lease is expected to earn $1.47 per share, with a 0.2% increase in the Zacks Consensus Estimate over the past three months [8].