Broadstone(BNL) - 2024 Q4 - Annual Report

Investment and Financial Performance - The company invested $404.8 million, including$234.3 million in new property acquisitions and $115.3 million in five build-to-suit developments, with a weighted average initial cash capitalization rate of 7.3$169.0 million or $0.86 per diluted share, and funds from operations (FFO) of$300.7 million or $1.52 per diluted share[20] - The company ended the year with total outstanding debt of$1.9 billion, with a Net Debt to Annualized Adjusted EBITDAre ratio of 5.0x[20] - The company has invested $52,200,000 in preferred equity with a stabilized cash capitalization rate of 8.0$395.5 million as of December 31, 2024[21] - The company maintained strong occupancy levels throughout the year, ending with 99.1%[20] - Approximately 99.1% of the portfolio is leased, with a weighted average remaining lease term of 10.2 years[30] - Total leased properties reached 759 with an Annual Base Rent (ABR) of $395,481,000, representing 100$86,431,000 in ABR, representing 21.9% of the total portfolio[24] - The total ABR from the top 20 tenants is $140,202,000, accounting for 35.5$54,839,000, which is 13.9% of the total portfolio[26] - The healthcare facilities sector includes 48 properties with an ABR of $23,990,000, representing 6.1$48,033,000, which is 12.1% of the total[26] Debt and Interest Rate Management - As of December 31, 2024, the company's fixed-rate debt had a carrying value of approximately $1.9 billion and a fair value of about$1.7 billion[294] - A 1% increase in market interest rates would decrease the fair value of the company's fixed-rate debt by approximately $35.7 million[294] - The company has$1.0 billion in borrowings under its Revolving Credit Facility, with $939.5 million swapped to a fixed rate[295] - The company has not engaged in speculative derivative transactions, focusing instead on managing interest rate risk through fixed-rate debt and swaps[296] Environmental and Compliance Considerations - Environmental assessments are conducted before property acquisitions to identify potential environmental concerns[56] - The company could be held liable for environmental contamination, which may adversely affect property value and investment[52] - Compliance with the Americans with Disabilities Act (ADA) may require modifications to properties, potentially incurring costs[51] Employee and Community Engagement - The company employs 73 full-time employees, focusing on various essential corporate activities[43] - The company has a commitment to employee wellness, offering competitive compensation, healthcare options, and various development opportunities[45] - The company engages in community service initiatives, providing employees with paid time off to volunteer and support underserved populations[45] Strategic Focus and Diversification - The company targets properties operated by creditworthy single tenants in industries with positive business drivers and trends[17] - The company targets investments primarily in industrial and retail property types, aiming to maintain diversification across property type, geography, tenant, and industry[40] - The company plans to acquire portfolios and assets that do not result in any one tenant representing more than 5% of ABR on a sustained basis[40] - The company is focused on long-term ownership of properties leased to national or large regional retailers in e-commerce resistant industries[42]