Broadstone(BNL) - 2023 Q3 - Quarterly Report

Portfolio Overview - As of September 30, 2023, the company’s portfolio includes 800 properties, with an annualized base rent (ABR) of $390 million[9] - The portfolio is approximately 99.4% leased, with a weighted average remaining lease term of about 10.5 years[9] - The total number of properties in the portfolio is 800, with a total ABR of$ 390,021,000[17] - The total square footage of the properties is 38,240,000 square feet[17] - The company operates in 44 U.S. states and four Canadian provinces, with no single geographic concentration exceeding 9.9% of ABR[9] Lease Structure - Approximately 97.3% of leases have contractual rent escalations, with a weighted average minimum increase of 2.0%[9] - The company has a weighted average annual minimum increase of 2.0% for its leases, providing organic revenue growth and inflation protection[29] - 80.3% of the ABR is subject to annual lease escalations, contributing to revenue stability[29] Tenant Composition - Total ABR from the top 10 tenants is $75,443,000, representing 19.3% of the total portfolio[15] - The top 20 tenants contribute$ 124,956,000 in ABR, accounting for 32.0% of the total portfolio[15] - The largest tenant, Roskam Baking Company, has an ABR of $15,605,000, making up 4.0% of the total portfolio[17] - Approximately 93.7% of tenants provide financial reporting, with 86.2% required to submit specified financial information periodically[9] Sector Diversification - The company’s properties are diversified across various sectors, with 51% in industrial, 18% in healthcare, 14% in restaurants, and 11% in retail[11] - The industrial sector includes 193 properties, accounting for 51.2% of total ABR, with manufacturing representing 16.8%[14] - The healthcare sector comprises 129 properties, contributing 17.6% to total ABR, with clinical properties at 7.0%[14] - The restaurant sector consists of 248 properties, making up 13.7% of total ABR, with casual dining and quick service restaurants each at 7.1% and 6.6% respectively[14] Financial Performance - Total lease revenues, net for the three months ended September 30, 2023, were$ 109,543,000, representing a slight increase of 0.2% compared to $109,353,000 for the previous quarter[31] - Net income for the three months ended September 30, 2023, was$ 52,145,000, a decrease of 17.2% from $62,996,000 in the previous quarter[38] - Net earnings per diluted share decreased to$ 0.26, down 18.8% from $0.32 in the previous quarter[38] - The company recognized a gain of$ 15,163,000 on the sale of real estate during the three months ended September 30, 2023, compared to a gain of $29,462,000 in the previous quarter, reflecting a decrease of 48.5%[35] - Interest income increased by 54.9%, from$ 82,000 in the previous quarter to $127,000[35] - Total operating expenses for the three months ended September 30, 2023, were$ 54,383,000, an increase of 1.6% from $53,502,000 in the previous quarter[33] Lease Expirations - Lease expirations in 2030 represent 13.9% of total ABR, amounting to$ 54,288,000[26] - The company has 73 properties with lease expirations in 2029, representing 6.1% of total ABR[26] - The total ABR for properties expiring in 2024 is $6,438,000, which is 1.7% of the total portfolio[26] - The company has 12 properties with lease expirations categorized as "Thereafter," contributing$ 12,733,000 or 3.3% of total ABR[26] Other Financial Commitments - The company has a $1.0 billion unsecured revolving credit facility established on January 28, 2022[8] - The company has commitments to fund two build-to-suit transactions with remaining obligations of$ 157.3 million expected to fund through October 2024[199] - The company executed a ten-year lease for new corporate office space with total expected future lease payments of $8.9 million[200] Adjustments and Expenses - Operating expenses billed to tenants increased by$ 587,000, or 12.8%, from $4,594,000 in the previous quarter to$ 5,181,000[31] - The adjustment to revenue recognized for uncollectible rental amounts billed, net improved by $141,000, or 59.7%, from$ (236,000) in the previous quarter to $(95,000)[31] - The company has 2 untenanted properties, which do not contribute to the ABR[26]