Investment and Portfolio Overview - The company invested $596.9 million during the nine months ended September 30, 2022, at a weighted average initial cash capitalization rate of 6.2%[105] - As of September 30, 2022, the portfolio comprised 790 properties, with an annualized base rent (ABR) of $371.9 million[107] - Approximately 99.3% of the portfolio was leased, with an ABR weighted average remaining lease term of approximately 10.7 years[105] - The company acquired properties in various sectors, with industrial assets accounting for 49% of the total volume acquired[108] - The portfolio is diversified across 44 U.S. states and four Canadian provinces, with no single geographic concentration exceeding 10.6% of ABR[105] - The total number of properties in the portfolio is 790, with a total ABR of $371,906,000[116] - The total square footage of the portfolio is 36,788,000 square feet[116] Lease and Tenant Information - Approximately 94.1% of tenants provide financial reporting, with 85.3% required to provide specified financial information periodically[105] - The company targets properties integral to tenants' businesses, allowing them to secure long-term net leases[105] - 97.2% of leases have contractual rent escalations, with an ABR weighted average minimum increase of 2.0%[105] - Total ABR (Annual Base Rent) from the top 10 tenants is $63,760,000, accounting for 17.1% of the total portfolio[112] - The top 20 tenants contribute a total ABR of $110,717,000, representing 29.8% of the total portfolio[112] - The healthcare sector represents 18.5% of the total portfolio based on ABR[110] - The restaurant sector accounts for 14.2% of the total portfolio based on ABR, with casual dining and quick service restaurants being significant contributors[110] - The healthcare facilities industry has 103 properties with an ABR of $54,541,000, which is 14.7% of the total portfolio[116] - The restaurant industry consists of 253 properties with an ABR of $53,326,000, making up 14.3% of the total portfolio[116] - The packaged foods and meats industry has 22 properties with an ABR of $22,220,000, representing 6.0% of the total portfolio[116] - The healthcare services industry has 18 properties with an ABR of $9,211,000, which is 2.5% of the total portfolio[116] Financial Performance - Net income for the three months ended September 30, 2022, was $28.7 million, a decrease of 19.2% from $35.6 million for the three months ended June 30, 2022[140] - Total lease revenues for the three months ended September 30, 2022, were $103.5 million, representing a 5.6% increase from $98.0 million for the three months ended June 30, 2022[131] - The company reported a net income of $92.7 million for the nine months ended September 30, 2022, up 19.9% from $77.3 million in 2021[151] - Funds From Operations (FFO) for the nine months ended September 30, 2022, was $202.0 million, compared to $194.1 million for the same period in 2021[171] - Core Funds From Operations (Core FFO) reached $196.7 million for the nine months ended September 30, 2022, compared to $168.2 million in the prior year[171] - Adjusted Funds From Operations (AFFO) was $186.6 million for the nine months ended September 30, 2022, compared to $157.3 million for the same period in 2021[171] - The increase in AFFO reflects the company's ability to manage non-cash revenues and expenses effectively[171] Debt and Liquidity - As of September 30, 2022, total outstanding debt was $2.1 billion, with a Net Debt to Annualized Adjusted EBITDAre ratio of 5.5x[153] - The company aims to maintain a Net Debt to Annualized Adjusted EBITDAre ratio generally less than 6.0x to ensure financial stability[153] - The company has $1.97 billion in total unsecured debt as of September 30, 2022, which includes $900 million in unsecured term loans and $850 million in senior unsecured notes[160] - The company completed a public offering in August 2022, selling 13 million shares at $21.35 per share, expected to provide net proceeds of approximately $270.7 million[159] - The company has $780.5 million of available capacity under its Revolving Credit Facility[156] - The company expects to meet long-term liquidity requirements primarily from borrowings under the Revolving Credit Facility, future debt and equity financings, and limited property sales[156] - The company has a total of $2.5 billion in contractual obligations as of September 30, 2022, which includes interest expense projections based on outstanding borrowings[165] Operational Expenses and Impairments - Operating expenses increased by 16.2% to $59.1 million for the three months ended September 30, 2022, compared to $50.9 million for the three months ended June 30, 2022[132] - The company recognized $4.2 million of impairment on investments in rental properties during the three months ended September 30, 2022, compared to $1.4 million for the previous quarter[134] - The provision for impairment of investment in rental properties decreased significantly to $5.5 million from $28.0 million, an 80.2% reduction[144] Interest and Borrowing Costs - Interest expense increased by 12.3% to $20.1 million for the three months ended September 30, 2022, compared to $17.9 million for the previous quarter[136] - Interest expense increased to $54.9 million, a 16.4% rise from $47.1 million in the previous year, attributed to higher average borrowings[147] - The weighted average cost of borrowings increased, with approximately $154.0 million, or 7.5%, of total outstanding indebtedness of $2.1 billion being variable[137] - The company has 32 interest rate swaps outstanding with an aggregate notional amount of $973 million to manage interest rate risk on variable-rate borrowings[167] Strategic Focus and Future Plans - The company plans to continue expanding its real estate portfolio to drive future growth and revenue[168] - The company is focused on a disciplined acquisition strategy and active asset management, including selective property sales[173] - The company’s acquisition growth strategy relies on obtaining acquisition financing on favorable terms while maintaining an appropriate mix of debt and equity capitalization[158]

Financial Data and Key Metrics Changes - The company generated AFFO of $62.8 million or $0.35 per share, representing approximately 6.1% growth over the same period last year [27] - AFFO per share was flat quarter-over-quarter compared to Q1 2022, largely driven by revenue from late Q1 acquisitions offset by accelerated equity raise [27][36] - The company ended the quarter with leverage of 5.3 times on a net debt to annualized adjusted EBITDAre basis, maintaining a conservative leverage profile of less than six times [31][34] Business Line Data and Key Metrics Changes - The company invested $182 million in 15 properties during Q2 at a weighted average initial cash cap rate of 6.4% [15] - Acquisitions during the quarter were heavily concentrated in industrial opportunities at 82%, with retail and healthcare transactions at 11% and 7%, respectively [17] - The portfolio comprised 764 properties with 213 tenants across 57 industries, achieving 100% base rent collection and 99.8% leased status as of quarter end [9][11] Market Data and Key Metrics Changes - The company has underwritten over $4 billion in opportunities through Q2, indicating a significant increase in transaction volume [46] - The acquisition environment has seen a shift with levered buyers exiting the market, creating cap rate relief and making certain asset classes more attractive [48] - Bid ranges across sophisticated parties have widened by 100 to 150 basis points, allowing for more favorable acquisition opportunities [49] Company Strategy and Development Direction - The diversified net lease strategy positions the company defensively in the current economic environment, allowing for consistent and predictable results [6][8] - The company aims to maintain a strong balance sheet while being selective in acquisitions, focusing on industrial and non-investment-grade assets [25][40] - The company is confident in achieving its full-year acquisition guidance range of $700 million to $800 million, with approximately $544 million of acquisitions either closed or under control year-to-date [24][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and rising rates, emphasizing the importance of a diversified portfolio [6][9] - The company is focused on maintaining a strong balance sheet and is prepared to execute additional growth opportunities in the second half of the year [36][40] - Management highlighted the importance of being selective in acquisitions while also being able to pivot quickly in response to market changes [12][25] Other Important Information - The company declared a $0.27 dividend per common share, payable on or before October 14 [38] - The company is evaluating alternative equity raise methods and intends to opportunistically utilize its ATM program to manage its leverage profile [32][30] Q&A Session Summary Question: Can you describe the acquisition environment and pricing changes? - Management noted that transaction volume remains robust, with a significant increase in opportunities underwritten compared to last year, and highlighted the impact of market dynamics on cap rates [46][48] Question: How do you balance raising equity for acquisitions versus additional assets? - Management indicated a preference for funding acquisitions through equity rather than disposing of lower-performing assets, emphasizing the long-term value of their portfolio [60] Question: How is the change in cost of capital impacting tenants and underwriting? - Management stated that they maintain a downside-oriented approach to tenant financial health, with a heightened focus on stress testing and refinancing risks [63][67] Question: Are you winning transactions where you are not the top bid due to your reputation? - Management confirmed that their strong track record and ability to close without financing contingencies have allowed them to win deals even when not the highest bidder [69] Question: How do you view the current environment for your watch list? - Management reported no significant changes to the watch list but continues to monitor tenants, particularly in consumer discretionary sectors [80] Question: What is the opportunity set in Canada? - Management views Canada as complementary to their U.S. portfolio and continues to explore opportunities, particularly in industrial and retail sectors [85][86] Question: Where are you seeing the most cap rate widening? - Management identified non-investment-grade industrial and retail spaces as areas with the most cap rate widening, while healthcare has been quieter this year [88]

Investment and Portfolio Overview - The company invested $392.4 million in 42 properties during the six months ended June 30, 2022, at a weighted average initial cash capitalization rate of 6.1%[102]. - As of June 30, 2022, the portfolio comprised 764 properties, with 757 located in 44 U.S. states and 7 in four Canadian provinces[102]. - The portfolio was approximately 99.8% leased with an ABR weighted average remaining lease term of approximately 10.6 years[102]. - The company has a diversified portfolio of approximately 34.4 million rentable square feet of operational space[102]. - The acquisitions included properties in industrial (47.2%), restaurant (25.4%), retail (23.8%), and healthcare (3.6%) asset classes[102]. - The company’s properties are diversified across 57 different industries, with no single tenant accounting for more than 2.0% of the ABR[102]. Lease and Rental Information - Approximately 97.3% of leases have contractual rent escalations, with an ABR weighted average minimum increase of 2.0%[102]. - The portfolio's annualized base rent (ABR) was $360.0 million as of June 30, 2022[104]. - Total portfolio consists of 764 properties with an aggregate ABR of $360,019,000, representing 100% of the total portfolio[107]. - The company has a weighted average remaining lease term of approximately 10.6 years, with 67.4% of ABR derived from leases expiring in 2030 and beyond[118]. - The company’s properties are predominantly leased under long-term net leases, with 99.8% of the portfolio subject to a lease as of June 30, 2022[117]. Tenant and Revenue Concentration - Total revenue from the top 10 tenants reached $59.453 million, accounting for 16.5% of the total portfolio[109]. - The top 20 tenants generated a total of $105.742 million, representing 29.4% of the total portfolio[109]. - The top 10 brands generated a total ABR of $58.644 million, representing 16.2% of the total portfolio[109]. - The top 20 brands produced an ABR of $104.533 million, accounting for 29.0% of the total portfolio[109]. Financial Performance - Net income for the six months ended June 30, 2022, was $63,993,000, a 36.8% increase from $46,780,000 in the same period of 2021[150]. - Net earnings per diluted share increased to $0.36, up 20.0% from $0.30 in the prior year[150]. - Lease revenues for the six months ended June 30, 2022, totaled $191,854,000, reflecting a 14.6% increase from $167,457,000 in the same period of 2021[140]. - The increase in lease revenues was primarily driven by growth in the real estate portfolio, with contractual rental amounts billed for operating leases rising to $171,901,000, a 15.9% increase from $148,256,000[140]. - Funds From Operations (FFO) for the six months ended June 30, 2022, was $129.84 million, up from $102.11 million for the same period in 2021[173]. Debt and Liquidity - The total outstanding indebtedness of the company is $1.9 billion, with approximately $200.5 million (10.8%) being variable rate debt[135]. - As of June 30, 2022, total debt outstanding was $1.9 billion, with a Net Debt to Annualized Adjusted EBITDAre ratio of 5.3x, below the target of 6.0x[152]. - The company has a $1.0 billion unsecured revolving credit facility established on January 28, 2022[101]. - The company has $679.3 million of available capacity under its Revolving Credit Facility, which is expected to meet long-term liquidity needs[155]. - The company has contractual obligations totaling approximately $2.22 billion as of June 30, 2022, including interest expenses and mortgages[164]. Operating Expenses and Gains - Operating expenses totaled $50,875,000 for the three months ended June 30, 2022, reflecting a 5.6% increase from $48,162,000 in the previous quarter[130]. - The company recognized a gain of $4.1 million on the sale of three properties during the three months ended June 30, 2022, compared to a gain of $1.2 million on the sale of one property in the previous quarter[136]. - The company recognized a gain of $5.3 million on the sale of four properties during the six months ended June 30, 2022, compared to a gain of $8.6 million on the sale of 19 properties in the same period of 2021[147]. Cash Flow and Investments - Net cash provided by operating activities increased to $117.96 million for the six months ended June 30, 2022, compared to $99.02 million for the same period in 2021, primarily due to growth in the real estate portfolio[169]. - Net cash used in investing activities rose to $(379.97) million for the six months ended June 30, 2022, up from $(242.71) million in the prior year, driven by increased acquisition volume[169]. - Net cash provided by financing activities increased to $263.22 million for the six months ended June 30, 2022, compared to $119.98 million in 2021, reflecting higher borrowings on the unsecured revolving credit facility[169]. Interest Rate Management - The company has entered into interest rate swaps to manage interest rate risk, with $717.7 million of variable-rate debt swapped to fixed rate[182]. - A 1% increase in market interest rates would decrease the fair value of fixed-rate debt by approximately $82.4 million as of June 30, 2022[182]. - As of June 30, 2022, the company had 28 interest rate swaps with an aggregate notional amount of $717.7 million to manage interest rate risk[167].

Financial Data and Key Metrics Changes - The company reported an AFFO of $60.4 million or $0.35 per share, representing a growth of approximately 13% year-over-year and 3% quarter-over-quarter [22] - The company ended the quarter with a leverage of 5.1x net debt to annualized adjusted EBITDAre, consistent with the previous quarter [24] - The company reiterated its AFFO per share guidance for 2022 to be between $1.38 and $1.42, implying a growth rate of 6.9% at the midpoint compared to 2021 [26] Business Line Data and Key Metrics Changes - During Q1, the company invested $210 million in 27 properties with a weighted average initial cash cap rate of 5.7% and a GAAP cap rate of 6.4% [11] - The acquisitions were primarily focused on restaurants (50%) and retail (37%), with industrial properties making up the remaining 13% [12] - The company increased its restaurant exposure from 13% to 15% of total ABR through two separate transactions [15] Market Data and Key Metrics Changes - The company successfully expanded its footprint into Canada with its first targeted acquisition, which included six high-quality retail locations [16] - The Canadian assets now represent 2.4% of total ADR, and the company plans to evaluate additional opportunities in Canada [17] Company Strategy and Development Direction - The company emphasized its diversified strategy, which allows it to adapt quickly to changes in the market environment and maintain a consistent flow of acquisition opportunities [9] - The management highlighted the importance of maintaining a selective approach to acquisitions while still achieving meaningful growth in earnings [10] - The company aims to continue its prudent capital allocation and maintain a conservative leverage profile of less than 6x [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current competitive transaction environment, despite challenges such as elevated inflation and rising interest rates [8] - The company is focused on carrying the momentum from Q1 into the remainder of 2022, believing that its diversified strategy will yield exceptional results [29] Other Important Information - The company declared a $0.27 dividend per common share, representing an increase of approximately 2% over the previous rate [27] - The company has a robust pipeline with over $164 million of opportunities under control, defined as executed contracts or letters of intent [19] Q&A Session Summary Question: What were some of the key decisions regarding the Canadian expansion? - Management highlighted the exceptional nature of the portfolio and the opportunity for scaled acquisitions as key factors in their comfort with underwriting assets in Canada [31][32] Question: Is there a difference in cap rates between the U.S. and Canada? - Management indicated that cap rates are very similar across the border, particularly in large urban markets [37] Question: Can you elaborate on the portfolio's tenant health and any potential headwinds? - Management reported strong rent collection and a stable internal watch list, focusing on potential risks related to inflation and labor pressures [40][41] Question: What are the thoughts on the capital release strategy for this year? - Management stated that there is currently no need for a debt offering this year, but they are well-positioned to pursue growth objectives without immediate market access [46] Question: Can you provide details on the disposition strategy? - Management mentioned that the disposition strategy includes portfolio pruning and the sale of a casual dining site, with plans to sell an office asset later in the year [48][49]

Investment and Portfolio Overview - The company invested $210.0 million in 27 properties during the three months ended March 31, 2022, at a weighted average initial cash capitalization rate of 5.7%[79] - As of March 31, 2022, the portfolio comprised 752 properties, with an annualized base rent (ABR) of $347.7 million[81] - The portfolio was approximately 99.8% leased with an ABR weighted average remaining lease term of approximately 10.5 years[79] - Approximately 97.3% of leases have contractual rent escalations, with an ABR weighted average minimum increase of 2.0%[79] - The company’s properties are diversified across 56 different industries, with no single tenant accounting for more than 2.1% of the ABR[79] - The industrial property type represents 46% of the total portfolio ABR, with manufacturing and distribution & warehouse making up 14.6% and 14.1% respectively[82] - Healthcare properties account for 19.1% of the total portfolio ABR, with clinical and healthcare services comprising 7.4% and 3.6% respectively[84] - Restaurant properties make up 15.0% of the total portfolio ABR, with casual dining and quick service restaurants at 7.8% and 7.2% respectively[84] - The portfolio includes properties located in 43 U.S. states and four Canadian provinces, with no single geographic concentration exceeding 10.5% of the ABR[79] Tenant and Revenue Information - Total top 10 tenants contributed $59,529,000 in annual base rent (ABR), representing 17.1% of the total portfolio[86] - The top 20 tenants accounted for $104,215,000 in ABR, which is 30.0% of the total portfolio[86] - The largest tenant, Jack's Family Restaurants LP, has 43 properties with an ABR of $7,166,000, making up 2.1% of the total portfolio[86] - Dollar General Corporation operates 55 properties with an ABR of $5,391,000, representing 1.6% of the total portfolio[86] - The total square footage for the top 10 tenants is 4,215,000 square feet, which is 12.9% of the total portfolio[86] - The top 20 brands have a total ABR of $103,446,000, accounting for 29.8% of the total portfolio[86] - Krispy Kreme Doughnut Corporation has 27 properties with an ABR of $5,034,000, representing 1.4% of the total portfolio[86] - The largest property type by ABR is Quick Service Restaurants, contributing $12,200,000 across multiple tenants[86] - The total number of properties for the top 20 tenants is 327, with a total square footage of 7,815,000 square feet[86] - The ABR for the top 10 brands is $58,545,000, which is 16.8% of the total portfolio[86] Financial Performance - Total lease revenues for the three months ended March 31, 2022, were $93,841,000, an increase of 1.3% compared to $92,642,000 for the three months ended December 31, 2021[99] - The company recognized a gain of $1,196,000 on the sale of real estate during the three months ended March 31, 2022, compared to $3,732,000 for the three months ended December 31, 2021, representing a decrease of 68.0%[104] - Net income for the three months ended March 31, 2022, was $28,441,000, a decrease of 11.7% from $32,226,000 for the three months ended December 31, 2021[106] - The company reported a net earnings per diluted share of $0.16 for the three months ended March 31, 2022, down 15.8% from $0.19 for the three months ended December 31, 2021[106] - Operating expenses for the three months ended March 31, 2022, totaled $48,162,000, an increase of 3.2% from $46,649,000 for the three months ended December 31, 2021[101] - Depreciation and amortization expenses increased to $34,290,000 for the three months ended March 31, 2022, up 2.4% from $33,476,000 for the three months ended December 31, 2021[101] - The company experienced a $1,126,000 increase in other expenses primarily due to a $1,100,000 unrealized foreign exchange loss on CAD borrowings[105] - The company anticipates significant lease expirations in 2030, with 100 properties and an ABR of $53,209,000, accounting for 15.3% of the total portfolio[97] - The company reported a decrease in variable rental amounts earned, totaling $(1,326,000) for the three months ended March 31, 2022, a 100% decline compared to the previous period[99] - Lease revenues increased to $93.841 million for the three months ended March 31, 2022, up 13.5% from $82.698 million in the same period of 2021[108] - The net write-offs of accrued rental income increased by over 100%, from $(442,000) in 2021 to $(1.326 million) in 2022[108] - Net income rose to $28.441 million, an 18.7% increase from $23.960 million in the prior year[118] - The company reported a decrease in general and administrative expenses by 17.0%, from $10.633 million in 2021 to $8.828 million in 2022[108] Debt and Liquidity - Total debt outstanding as of March 31, 2022, was $1.8 billion, with a Net Debt to Annualized Adjusted EBITDAre ratio of 5.14x[121] - The company has a total of 745 properties in the U.S., which accounts for 97.6% of the total portfolio[91] - The company has a remaining capacity of $733.9 million on its Revolving Credit Facility as of March 31, 2022[128] - The company aims to maintain a Net Debt to Annualized Adjusted EBITDAre ratio below 6.0x on a sustained basis through the use of follow-on equity offerings and the ATM Program[126] - Cash and cash equivalents totaled $65.5 million as of March 31, 2022, an increase from $18.4 million at the same time in 2021[137] - The company had approximately $51.9 million of expected obligations due throughout the remainder of 2022, primarily consisting of $48.4 million of interest expense[123] - The company has contractual obligations totaling approximately $2,187.2 million as of March 31, 2022, including interest expenses and tenant improvement allowances[132] - Borrowings under the Revolving Credit Facility and other variable-rate debt totaled $863.6 million as of March 31, 2022, with $720.1 million swapped to a fixed rate[152] Cash Flow and Operations - Net cash provided by operating activities for the three months ended March 31, 2022, was $59,104, compared to $51,780 for the same period in 2021, representing a 14.5% increase[139] - Net cash used in investing activities was $(207,678) for the three months ended March 31, 2022, compared to $(67,661) for the same period in 2021, indicating a significant increase in investment outflows[139] - Net cash provided by financing activities was $186,352 for the three months ended March 31, 2022, compared to $(76,497) for the same period in 2021, showing a substantial improvement in financing cash flows[139] - Funds from Operations (FFO) for the three months ended March 31, 2022, was $61,504, compared to $51,929 for the same period in 2021, reflecting a 18.4% increase[141] - Adjusted EBITDAre for the three months ended March 31, 2022, was $84,440, compared to $81,453 for the same period in 2021, indicating a 3.6% growth[144] - Annualized Adjusted EBITDAre for March 31, 2022, was $337,759, compared to $325,812 for December 31, 2021, showing a 3.7% increase[144] Interest Rate and Currency Risk - The company has fixed-rate debt with a carrying value of approximately $1.7 billion and a fair value of $1.6 billion as of March 31, 2022[150] - A 1% increase in market interest rates would result in a decrease in the fair value of the company's fixed-rate debt by approximately $90.7 million[150] - The company expects a 1% increase or decrease in interest rates to correspond to a $1.4 million increase or decrease in annual interest expense[152] - The company is exposed to foreign currency exchange rate risk due to investments in Canada, funded partially through Canadian dollar borrowings[153] - Unrealized foreign currency gains and losses from Canadian dollar borrowings do not impact cash flows from operations until settled[153] - The company has not engaged in transactions in derivative financial instruments or derivative commodity instruments, except for interest rate swaps[152] - The company believes the foreign currency exchange rate risk on remaining cash flows is immaterial[153] - The company manages interest rate risk by entering into long-term fixed-rate debt and interest rate swaps[150] Accounting Policies and Estimates - There have been no significant changes to critical accounting policies and estimates during the three months ended March 31, 2022[148]

Broadstone Net Lease, Inc. (NYSE:BNL) Q4 2021 Earnings Conference Call February 23, 2022 1:00 PM ET Company Participants Mike Caruso - Senior Vice President of Corporate Finance and Investor Relations Chris Czarnecki - Chief Executive Officer Ryan Albano - Chief Financial Officer John Moragne - Chief Operating Officer Conference Call Participants Caitlin Burrows - Goldman Sachs Ki Bin Kim - Truist Ronald Kamdem - Morgan Stanley Operator Hello, and welcome to the Broadstone Net Lease Fourth Quarter 2021 Earn ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39529 BROADSTONE NET LEASE, INC. (Exact name of registrant as specified in its charter) Maryland 26-1516177 (State ...

Financial Data and Key Metrics Changes - The company reported robust investment activity totaling over $225 million during Q3 2021, with 100% rent collections [7] - Generated AFFO of $55.8 million during the quarter, or $0.33 per diluted share, remaining flat quarter-over-quarter [31] - Revised full-year AFFO guidance to a range of $1.30 to $1.32 per diluted share, representing an implied growth rate of 9.2% at the midpoint [34] Business Line Data and Key Metrics Changes - Closed 11 transactions comprising 18 properties for a total investment of $225.9 million at a weighted average cash cap rate of 6.5% [8] - Acquisitions were primarily in industrial (59%) and health care (31%) sectors, with a smaller concentration in investment-grade retail properties (10%) [8] - Sold six properties for $26.6 million, reflecting the company's disposition strategy focused on risk mitigation [21] Market Data and Key Metrics Changes - Approximately $102 million of additional assets under control, defined as under contract or executed letter of intent, primarily across industrial and retail assets [19] - The current market environment remains highly competitive, with substantial capital from both public and private buyers [19] Company Strategy and Development Direction - The company aims to maximize financial flexibility and support a defensive growth profile as it prepares for an active 2022 [7] - Focused on closing out 2021 with strong Q4 investment activity, revising full-year acquisitions guidance higher to a range of $600 million to $700 million [20] - The company continues to monitor its portfolio closely, with a strong emphasis on tenant quality and lease strength [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current operating profile and health of tenants, with 100% base rent collections during the quarter [25] - The company is optimistic about the acquisition pace being sustainable, despite a highly competitive environment [42] - Management remains cautious about further capital deployment into the office space, monitoring each asset closely [58] Other Important Information - Established a $400 million ATM program and completed a $375 million inaugural public bond offering, enhancing access to capital [28] - Received an upgraded credit rating of Baa2 with a stable outlook from Moody's, aligning with the BBB rating from S&P [29] Q&A Session Summary Question: Acquisition volume guidance increase - Management indicated that the team is capable of supporting a higher level of acquisition volume and continues to source across a broad range of property types [40][41] Question: Seasonality in acquisition activity - Management acknowledged past seasonality but aims for more consistency quarter-to-quarter, with Q4 expected to be robust [43][44] Question: Impact of early lease terminations on AFFO growth - The early lease termination resulted in a drag on FFO per share due to the loss of ABR, but it is viewed as a timing issue [48][49] Question: Office transaction context and future exposure - Management clarified that the recent office transaction was a specific one-off situation and expressed confidence in the broader office portfolio [52][56] Question: Geographic shifts in risk-return benefits - Management noted robust pipeline activity in the Southeast and Southwest, with a focus on risk-adjusted returns in secondary and tertiary markets [60][61] Question: Sourcing of transactions in the quarter - Management highlighted the strength of sourcing capabilities, with many deals being repeat business and some low-marketed opportunities [64][66]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.00025 par value BNL The New York Stock Exchange Large accelerated filer ☐ Accelerated filer ☐ FORM 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021, or ☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 Comm ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.00025 par value BNL The New York Stock Exchange Large accelerated filer ☐ Accelerated filer ☐ FORM 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2021, or ☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 Commissio ...