Development Projects - Broadstone Net Lease has added a new development project with an estimated total investment of approximately $78.2 million to its build-to-suit pipeline[1]. - The new project will be completed in partnership with Prologis, Inc., a leader in high-quality industrial property development[2]. - The company has secured land and commenced construction on a state-of-the-art distribution warehouse for FCA US, expected to deliver in Q3 2026[3]. - As of April 24, 2025, Broadstone's cumulative investments in active developments total approximately $311.4 million[3]. - The weighted average estimated yield on the total project investments is approximately 7.4%[3]. - The company plans to pursue additional opportunities with Prologis in the near future, marking the beginning of a new relationship[3]. Portfolio and Investment Strategy - Broadstone's diversified portfolio consists of 765 individual net leased commercial properties across 44 U.S. states and four Canadian provinces as of December 31, 2024[6]. - The company emphasizes a commitment to long-term value creation through strong credit analysis and prudent real estate underwriting[6]. - Broadstone's investment strategy focuses on single-tenant commercial real estate properties net leased on a long-term basis[6]. Risks and Forward-Looking Statements - Forward-looking statements indicate potential risks related to economic conditions, inflation, and tenant financial health that may impact future results[7].

Group 1 - The Conservative Income Portfolio targets high-value stocks with significant margins of safety, utilizing well-priced options to reduce investment volatility [1][3] - The Enhanced Equity Income Solutions Portfolio aims to generate yields of 7-9% while minimizing volatility [1][3] - Broadstone Net Lease (NYSE: BNL) has attractive valuation and high yield, but faces challenges with static to declining funds from operations (FFO) over time [2] Group 2 - Trapping Value is a team of analysts with over 40 years of combined experience in generating options income and focusing on capital preservation [3] - The investing group Conservative Income Portfolio collaborates with Preferred Stock Trader to offer two income-generating portfolios and a bond ladder [3]

Portfolio Overview - As of March 31, 2025, the portfolio includes 769 properties, with 762 located in 44 U.S. states and 7 in four Canadian provinces[105] - The portfolio is approximately 99.1% leased with an annualized base rent (ABR) weighted average remaining lease term of about 10.0 years[110] - The real estate investment portfolio has an annualized base rent (ABR) of $401.3 million, with industrial properties accounting for 59.8% of the total portfolio[115] - The company has 769 total properties, with 39,765 thousand square feet across various sectors[120] - Total leased properties amount to 769, with an Annual Base Rent (ABR) of $401,329,000, representing 100% of the total portfolio[126] - The company has 762 properties in the U.S., contributing $393,570,000 in ABR, which is 98.1% of the total[126] Lease and Rental Information - Approximately 97.5% of leases have contractual rent escalations, with an ABR weighted average increase of 2.0%[110] - As of March 31, 2025, 97.5% of leases provide for future ABR increases, with a weighted average annual increase of 2.0%[126] - The weighted average lease term for build-to-suit developments is 17.7 years, with a weighted average annual rent increase of 1.7%[111] - The top 10 tenants contribute 21.9% of the total ABR, with Roskam Baking Company, LLC being the largest at $16.236 million[118] - The restaurant industry represents 13.8% of the total ABR, with 258 properties generating $55.390 million[119] Financial Performance - Net income for the three months ended March 31, 2025, was $17.49 million, a decrease of $10.11 million, or 36.6%, from the previous quarter[140] - Net income for the three months ended March 31, 2025, was $17.5 million, a decrease of 74.3% compared to $68.2 million for the same period in 2024[150] - Net earnings per diluted share decreased to $0.09, down 75.1% from $0.35 in the prior year[150] - Lease revenues, net decreased by $3.4 million, or 3.1%, to $108.69 million for the three months ended March 31, 2025, primarily due to a $2.2 million write-off of accrued rental income[133] - Total operating expenses decreased by $6.58 million, or 8.5%, to $70.79 million, driven by a reduction in depreciation and amortization expenses[134] Investment Activity - During the three months ended March 31, 2025, total investments amounted to $88.333 million, with an initial cash capitalization rate of 7.2%[111] - The investment activity for acquisitions during the same period had an acquisition price of $59.004 million and an initial cash capitalization rate of 7.2%[111] - The company completed investments of $61.8 million in acquisitions and revenue-generating capital expenditures at a weighted average cash capitalization rate of 7.2% during the quarter[133] - The company has invested $52,200,000 in transitional capital, with an annualized initial cash NOI yield of 7.6%[130] Debt and Liquidity - Total debt outstanding as of March 31, 2025, was $2.0 billion, with a Net Debt to Annualized Adjusted EBITDAre ratio of 5.1x[153] - The company had approximately $336.0 million of expected obligations due throughout the remainder of 2025, including $183.8 million for investments and $58.2 million for declared dividends[157] - As of March 31, 2025, the company had $825.9 million of available capacity under its Revolving Credit Facility[157] - The company expects to meet long-term liquidity needs primarily through borrowings under its Revolving Credit Facility and proceeds from dispositions[160] - The company amended its Revolving Credit Facility on February 28, 2025, extending the maturity date to March 31, 2029, and increasing the facility size from $1.5 billion to $2.5 billion[166] Market Conditions and Risks - Current macroeconomic conditions have led to a challenging lending environment, impacting transaction volumes and earnings growth rates compared to historical periods[109] - The company is exposed to interest rate risk from floating-rate borrowings, which may affect net income and cash flow[174] - The company reported a 1% increase in market interest rates would lead to a decrease in the fair value of fixed-rate debt by approximately $34.1 million[201] - A 10% fluctuation in the exchange rate between the Canadian dollar and USD would result in a corresponding $7.0 million change in unrealized foreign currency gain or loss[204] Project Management and Development - As of March 31, 2025, the total project investment for in-process and stabilized developments is estimated at $438.036 million, with a cumulative investment of $428.595 million[112] - The company expects to update project timing estimates on a quarterly basis, indicating a proactive approach to project management[113] - The company has 5 in-process developments and 2 untenanted properties as of March 31, 2025[126] Other Financial Metrics - Funds From Operations (FFO) for the three months ended March 31, 2025, was $72.6 million, compared to $73.1 million for the same period in 2024[186] - Core Funds From Operations (Core FFO) increased to $75.3 million for the three months ended March 31, 2025, from $74.1 million in the prior year[186] - Adjusted Funds From Operations (AFFO) was $71.8 million for the three months ended March 31, 2025, compared to $70.9 million for the same period in 2024[186] - The company had 31 effective and seven forward-starting interest rate swaps with an aggregate notional amount of $1.4 billion as of March 31, 2025[175]

Financial Data and Key Metrics Changes - The company reported adjusted funds from operations (AFFO) of $71.8 million or $0.36 per share for Q1 2025, benefiting from recent investments and lower operating expenses [21] - The company maintained its 2025 AFFO guidance range at $1.45 to $1.49 per share, reflecting approximately 3% growth at the midpoint [9][23] - The pro forma leverage at the end of the quarter was 5.0 times net debt, with approximately $826 million available on the revolving credit facility [22] Business Line Data and Key Metrics Changes - The company invested $103.9 million in new property acquisitions, build-to-suit developments, and revenue-generating CapEx, with a weighted average initial cash cap rate of 7.2% [16] - The committed build-to-suit developments pipeline stands at approximately $305.9 million, with an expected initial cash cap rate in the 7s and straight-line yields in the mid-8s to mid-9s [6][13] - The company has $132.9 million of acquisitions under control and $4.5 million of commitments to fund revenue-generating CapEx with existing tenants [16] Market Data and Key Metrics Changes - The company reported 99.1% occupancy and 99.1% rent collection for the first quarter, indicating a resilient and diversified portfolio [9] - The company has minimal near-term rollover concerns, with only 1% of its annual base rent (ABR) remaining to be addressed for 2025 [17] Company Strategy and Development Direction - The company focuses on a differentiated strategy that includes a robust pipeline of build-to-suit projects, aiming to add at least $500 million in additional developments to its committed schedule [11][42] - The company emphasizes the importance of maintaining a flexible balance sheet and proactive portfolio management to navigate macroeconomic uncertainties [9][10] - The company is expanding its developer relationships to enhance its build-to-suit pipeline, with a recent partnership with Prologis for a $78.2 million project [7][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the risks presented by the current macroeconomic environment, including potential tariffs and consumer spending trends, but expressed confidence in the company's ability to manage these challenges [8][10] - The management team remains optimistic about the long-term growth potential, citing a strong pipeline and disciplined execution as key drivers for shareholder value [5][8] Other Important Information - The company has a watch list focusing on consumer-centric tenants and is closely monitoring the performance of certain tenants, including Zips and Stanislaus Surgical [18][20] - The company plans to maintain its dividend at $0.29 per share, payable to holders of record as of June 30, 2025 [23] Q&A Session Summary Question: How is the company monitoring credit risk related to industrial exposure and tariffs? - The management team is taking a top-down and bottom-up approach to assess individual tenants and industries affected by tariffs, emphasizing that manufacturing is not uniform and some tenants are well-positioned to manage these challenges [25][27] Question: What is the guidance for bad debt this year? - The company started the year with a bad debt guidance of 125 basis points and plans to maintain this figure, reassessing after Q2 [30][33] Question: What is the company's exposure to Claire's and how are they managing it? - The company owns Claire's sole distribution facility in the U.S., representing about 78 basis points of exposure, and is optimistic about their ability to navigate tariff-related challenges [36][39] Question: What is the status of the build-to-suit pipeline? - The company remains committed to its goal of $500 million in build-to-suit developments and is actively pursuing additional developer partnerships to enhance its pipeline [41][42] Question: How does the company plan to fund its existing build-to-suit pipeline? - The company has ample capacity on its credit facility and does not intend to seek permanent financing for its current projects, focusing on self-funding through its portfolio [46][48] Question: What is the nature of the relationship with Prologis? - The relationship with Prologis is expected to yield repeat business, with ongoing discussions about future projects, highlighting the importance of strong developer relationships [49][78]

Financial Data and Key Metrics Changes - The company reported adjusted funds from operations (AFFO) of $71.8 million or $0.36 per share for the quarter, benefiting from recent investments and lower operating expenses [20][23] - The company maintained its 2025 AFFO guidance range at $1.45 to $1.49 per share, reflecting approximately 3% growth at the midpoint [9][10] Business Line Data and Key Metrics Changes - The company invested $103.9 million in new property acquisitions, build-to-suit developments, and revenue-generating capital expenditures, with a weighted average initial cash cap rate of 7.2% and a weighted average straight-line yield of 8.3% [16][20] - The committed build-to-suit developments pipeline stands at approximately $305.9 million, with an expected initial cash cap rate in the 7s and straight-line yields in the mid-8s to mid-9s [5][12] Market Data and Key Metrics Changes - The company has approximately $132.9 million of acquisitions under control and $4.5 million of commitments to fund revenue-generating CapEx with existing tenants [16] - The company reported 99.1% occupancy and 99.1% rent collection for the first quarter, indicating a resilient and diversified portfolio [9] Company Strategy and Development Direction - The company emphasizes a differentiated strategy focused on disciplined growth, with a goal of adding at least $500 million in additional build-to-suit developments to its committed schedule [10][11] - The company is expanding its developer relationships, recently partnering with Prologis for a $78.2 million project, which is expected to enhance its pipeline and growth opportunities [6][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the macroeconomic uncertainties, including potential tariffs and consumer spending trends, but expressed confidence in the company's ability to manage risks [8][9] - The company remains vigilant in monitoring tenant credit risks, particularly in consumer-centric industries, while maintaining a diversified portfolio to mitigate impacts from individual credit events [17][18] Other Important Information - The company amended its $1 billion revolving credit facility, extending the maturity date to March 2029 and reducing the all-in borrowing rate by 10 basis points [21][22] - The company ended the quarter with pro forma leverage of 5.0 times net debt and approximately $826 million available on its revolving credit facility, providing ample capacity for future investments [22][23] Q&A Session Summary Question: How is the company monitoring credit exposure in the industrial sector due to tariffs? - The company is taking both top-down and bottom-up approaches to assess individual tenants and industries affected by tariffs, emphasizing that manufacturing is not uniform and varies by tenant [25][26] Question: What is the guidance for bad debt this year? - The company started the year with a bad debt guidance of 125 basis points and plans to maintain that figure, reassessing after Q2 and into Q3 [29][32] Question: What is the exposure to Claire's and how is the company managing it? - The company owns Claire's sole distribution facility in the U.S., which accounts for 78 basis points of exposure, and is actively monitoring their logistics and inventory sourcing due to tariff impacts [34][36] Question: Can you provide an update on the build-to-suit pipeline? - The company remains confident in its goal of $500 million in build-to-suit developments for the year, with a robust pipeline despite some macroeconomic uncertainties [39][40] Question: How does the company plan to fund its existing build-to-suit pipeline? - The company has ample capital available and does not intend to put permanent financing on any of the current deals, focusing on controlling its own destiny [43][46] Question: What is the nature of the relationship with Prologis? - The relationship with Prologis is expected to yield repeat business, with ongoing discussions for future projects, highlighting the value of their partnership [76][78]

Q1 2025 QUARTERLY SUPPLEMENTAL INFORMATION Broadstone Net Lease, Inc. (NYSE: BNL) is an industrial- focused, diversified net lease real estate investment trust (REIT) that invests in single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. www.broadstone.com Table of Contents | Section | Page | | --- | --- | | About the Data | 3 | | Company Overview | 4 | | Quarterly Financial Summary | 5 | | Balance Sheet | 6 | | Income Statement Summary | ...

Financial Performance - Broadstone Net Lease reported quarterly funds from operations (FFO) of $0.36 per share, consistent with the Zacks Consensus Estimate and unchanged from the previous year [1] - The company posted revenues of $108.69 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.62%, but showing an increase from $105.37 million year-over-year [2] - Over the last four quarters, Broadstone Net Lease has surpassed consensus FFO estimates only once [1] Market Performance - Broadstone Net Lease shares have increased approximately 1.2% since the beginning of the year, contrasting with a decline of -5.5% in the S&P 500 [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $0.36 on revenues of $112.44 million, and for the current fiscal year, it is $1.46 on revenues of $452.24 million [7] - The estimate revisions trend for Broadstone Net Lease is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The REIT and Equity Trust - Residential industry, to which Broadstone Net Lease belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Market Efficiency and Stock Price Movements - The market exhibits varying degrees of efficiency, particularly less efficient during erratic price movements, with recent intraday swings reaching up to 8 percentage points [1] - It is essential to differentiate between stocks that have declined for valid reasons and those that are merely affected by broader market movements [2] Categories of Stock Price Declines - Stock price declines can be categorized into two types: one where earnings decrease leading to a price drop, and another where multiples contract without a change in earnings [6] - The focus should be on investing in companies whose fundamentals remain intact despite a drop in multiples [2] Fundamental Impact on Stocks - Macro news tends to influence the entire market, often leading to mispricing, while individual stock news affects specific companies [3] - Companies like Apple (AAPL) are more susceptible to macroeconomic news, which can lead to a fundamental decline in earnings [4] Investment Opportunities in REITs - Centerspace (CSR), a midwestern apartment REIT, has seen a 13.7% decline in the last month, but its fundamentals remain strong due to decreasing apartment construction starts [5][11] - Broadstone Net Lease (BNL) has also experienced a 13% selloff, yet its long-term triple net lease structure ensures stable revenue growth [14][20] - Easterly Government Properties (DEA) faced a total drop of over 26% due to a dividend cut, but its earnings guidance remains unchanged, indicating a potential undervaluation [23][26] Market Reactions and Valuation - The market's reaction to dividend changes can lead to significant price drops that do not reflect the underlying fundamentals of the company [32] - The AFFO yield for DEA is now above 11%, suggesting it is undervalued compared to its reliable cash flows from long-term government leases [35] Conclusion on Investment Strategy - Market pricing inefficiencies create opportunities for investors to identify undervalued stocks that do not reflect their true fundamental value [36]

Company Overview - Broadstone Net Lease (NYSE: BNL) is identified as a 'turn-around' opportunity within the REIT sector, focusing on reducing exposure to healthcare-related properties and shifting its portfolio towards industrial and retail properties [1] Investment Strategy - The company emphasizes dividend investing as a key strategy for achieving financial freedom, highlighting its accessibility and potential for long-term wealth building [1] Analyst Background - The analyst has extensive experience in M&A and business valuation, having evaluated numerous businesses and participated in both sell-side and buy-side transactions [1]

Group 1 - The net lease sector is experiencing significant changes as 2025 approaches, indicating a dynamic environment in commercial real estate [1] - An article was recently published focusing on the broader commercial real estate market, highlighting the excitement surrounding it [1]