Broadstone(US:BNL)2025-10-29 20:23Portfolio Overview - As of September 30, 2025, the portfolio includes 759 properties, with 752 located in 44 U.S. states and 7 in 4 Canadian provinces[112] - The portfolio was approximately 99.5% leased with an annualized base rent (ABR) weighted average remaining lease term of approximately 9.5 years[117] - The company has a diversified portfolio with no single geographic concentration exceeding 9.2% of ABR[117] - The total number of properties in the portfolio is 759, with a diverse range of tenants across various industries[125] - The company has a total of 759 properties with an Annual Base Rent (ABR) of $412,944,000, covering 40,653,000 square feet[130] Financial Performance - Net income for the three months ended September 30, 2025, was $27,065, representing an increase of $7,235, or 36.5%, compared to $19,830 for the previous quarter[154] - Lease revenues, net for the three months ended September 30, 2025, increased by $1,181, or 1.0%, to $114,167, compared to $112,986 for the previous quarter[146] - For the nine months ended September 30, 2025, lease revenues, net increased by $16,174, or 5.1%, to $335,844 compared to $319,670 for the same period in 2024[157] - Net income for the nine months ended September 30, 2025, was $64.4 million, a decrease of 54.5% compared to $141.4 million in 2024, primarily due to a $60.7 million decrease in gains on real estate sales[168] Investment Activity - For the three months ended September 30, 2025, total investments amounted to $203.9 million, with an initial cash capitalization rate of 7.1%[118] - The investment activity for the nine months ended September 30, 2025, included acquisitions totaling $253.2 million, with a straight-line yield of 8.2%[118] - The company closed on $145.0 million of acquisitions and revenue-generating capital expenditures at a weighted average cash capitalization rate of 7.1% during the three months ended September 30, 2025[146] Debt and Financing - As of September 30, 2025, total debt outstanding was $2.4 billion, with a Net Debt to Annualized Adjusted EBITDAre ratio of 5.7x[170] - Total unsecured debt as of September 30, 2025, was $2.28 billion, including $1.2 billion in senior unsecured notes[180] - The company completed a public offering of $350.0 million in senior unsecured notes with a 5.00% interest rate, maturing in 2032, to repay borrowings and fund investments[182] - A new unsecured term loan of $400.0 million was established, maturing in March 2028, with an additional $100.0 million drawn to repay part of the revolving credit facility[184] Operational Metrics - Approximately 97.5% of leases have contractual rent escalations, with an ABR weighted average increase of 2.0%[117] - Approximately 96.6% of tenants provide financial reporting, with 82.0% required to provide specified financial information periodically[117] - The company has 207 industrial properties, totaling 252,887 thousand square feet, which represents 81.4% of the total square footage[125] - The largest tenant industry is Restaurants, accounting for 13.3% of the total ABR and 2.9% of the total square feet[130] Impairment and Expenses - The company recognized an impairment charge of $6,999 for the three months ended September 30, 2025, down from $11,939 in the previous quarter, reflecting a $4.9 million decrease[149] - The impairment charge for the nine months ended September 30, 2025, was $35.1 million, primarily due to changes in the long-term hold strategy, including a $14.6 million charge on two healthcare properties[160] - General and administrative expenses increased by $1.7 million, mainly due to higher stock-based compensation expenses[162] Cash Flow and Liquidity - As of September 30, 2025, cash and cash equivalents totaled $83.3 million, up from $11.2 million a year earlier, with net cash provided by operating activities at $214.9 million[196] - The company reported a net cash used in investing activities of $(390.6) million, primarily due to increased build-to-suit development investments[197] - Financing activities generated net cash of $243.0 million, reflecting increased proceeds from unsecured term loans and senior unsecured notes[198] Market and Economic Conditions - The company anticipates that challenging macroeconomic conditions will continue to limit acquisition volumes and earnings growth compared to historical periods[116] - The company is exposed to foreign currency exchange rate risk due to investments in Canada, with a 10% change in the exchange rate between the Canadian dollar and USD potentially resulting in a $7.2 million unrealized foreign currency gain or loss[219]