Broadstone(US:BNL)2022-08-03 16:00Investment 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].