Broadstone Net Lease Inc
For the period ended Sep 30, 2024. Filed Oct 31, 2024.
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Sep 30, 2024 · Filed Oct 31, 2024
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Real Estate Portfolio Information
Our Real Estate Investment Portf olio
The following charts summarize our portfolio diversification by property type, tenant, brand, industry, and geographic location as of September 30, 2024. These portfolio statistics exclude transitional capital investments. The percentages below are calculated based on our ABR of $398.2 million as of September 30, 2024.
Diversification by Property Type
| Property Type | # Properties | ABR (’000s) | ABR as a % of Total Portfolio | Square Feet (’000s) | SF as a % of Total Portfolio |
|---|---|---|---|---|---|
| Industrial | |||||
| Manufacturing | 80 | $69,796 | 17.5% | 12,319 | 31.0% |
| Distribution & Warehouse | 49 | 56,238 | 14.1% | 9,596 | 24.2% |
| Food Processing | 34 | 49,209 | 12.4% | 5,736 | 14.4% |
| Cold Storage | 4 | 23,344 | 5.9% | 1,739 | 4.4% |
| Flex and R&D | 6 | 16,298 | 4.1% | 1,157 | 2.9% |
| Industrial Services | 29 | 14,795 | 3.8% | 725 | 1.9% |
| Untenanted | 1 | — | — | 178 | 0.4% |
| Industrial Total | 203 | 229,680 | 57.8% | 31,450 | 79.2% |
| Restaurant | |||||
| Casual Dining | 102 | 27,107 | 6.8% | 674 | 1.7% |
| Quick Service Restaurants | 151 | 26,433 | 6.6% | 514 | 1.3% |
| Restaurant Total | 253 | 53,540 | 13.4% | 1,188 | 3.0% |
| Retail | |||||
| General Merchandise | 138 | 29,549 | 7.4% | 2,195 | 5.5% |
| Automotive | 65 | 12,069 | 3.0% | 764 | 1.9% |
| Home Furnishings | 13 | 7,353 | 1.9% | 797 | 2.0% |
| Child Care | 2 | 725 | 0.2% | 20 | 0.1% |
| Retail Total | 218 | 49,696 | 12.5% | 3,776 | 9.5% |
| Healthcare | |||||
| Animal Health Services | 27 | 11,216 | 2.8% | 399 | 1.0% |
| Surgical | 6 | 7,777 | 2.0% | 231 | 0.6% |
| Clinical | 17 | 7,756 | 1.9% | 336 | 0.8% |
| Life Science | 8 | 7,727 | 1.9% | 519 | 1.3% |
| Healthcare Services | 25 | 7,515 | 1.9% | 273 | 0.7% |
| Untenanted | 2 | — | — | 225 | 0.6% |
| Healthcare Total | 85 | 41,991 | 10.5% | 1,983 | 5.0% |
| Office | |||||
| Strategic Operations | 5 | 10,516 | 2.6% | 615 | 1.5% |
| Corporate Headquarters | 7 | 8,610 | 2.2% | 409 | 1.0% |
| Call Center | 2 | 4,126 | 1.0% | 287 | 0.8% |
| Office Total | 14 | 23,252 | 5.8% | 1,311 | 3.3% |
| Total | 773 | $398,159 | 100.0% | 39,708 | 100.0% |
Diversification by Tenant
| Tenant | Property Type | # Properties | ABR(’000s) | ABR as a % of Total Portfolio | Square Feet(’000s) | SF as a % of Total Portfolio |
|---|---|---|---|---|---|---|
| Roskam Baking Company, LLC* | Food Processing | 7 | $15,917 | 4.0% | 2,250 | 5.7% |
| United Natural Foods, Inc. | Cold Storage | 1 | 13,367 | 3.4% | 1,016 | 2.6% |
| AHF, LLC* | Distribution & Warehouse/Manufacturing | 8 | 9,612 | 2.4% | 2,284 | 5.8% |
| Joseph T. Ryerson & Son, Inc | Distribution & Warehouse | 11 | 7,870 | 2.0% | 1,599 | 4.0% |
| Jack’s Family Restaurants LP* | Quick Service Restaurants | 43 | 7,456 | 1.8% | 147 | 0.4% |
| Tractor Supply Company | General Merchandise | 23 | 6,353 | 1.6% | 462 | 1.2% |
| Axcelis Technologies, Inc. | Flex and R&D | 1 | 6,263 | 1.6% | 417 | 1.1% |
| J. Alexander’s, LLC* | Casual Dining | 16 | 6,207 | 1.6% | 131 | 0.3% |
| Salm Partners, LLC* | Food Processing | 2 | 6,168 | 1.5% | 426 | 1.1% |
| Nestle’ Dreyer's Ice Cream Company | Cold Storage | 2 | 6,151 | 1.5% | 504 | 1.1% |
| Total Top 10 Tenants | 114 | 85,364 | 21.4% | 9,236 | 23.3% | |
| Hensley & Company* | Distribution & Warehouse | 3 | 6,109 | 1.5% | 577 | 1.5% |
| Dollar General Corporation | General Merchandise | 60 | 5,983 | 1.5% | 562 | 1.4% |
| BluePearl Holdings, LLC** | Animal Health Services | 13 | 5,750 | 1.4% | 159 | 0.4% |
| Red Lobster Hospitality & Red Lobster Restaurants LLC* | Casual Dining | 18 | 5,563 | 1.4% | 147 | 0.4% |
| Krispy Kreme Doughnut Corporation | Quick Service Restaurants/Food Processing | 27 | 5,538 | 1.4% | 156 | 0.4% |
| Outback Steakhouse of Florida LLC*1 | Casual Dining | 22 | 5,454 | 1.4% | 140 | 0.4% |
| Big Tex Trailer Manufacturing Inc.* | Automotive/Distribution & Warehouse/Manufacturing/ Corporate Headquarters | 17 | 5,157 | 1.3% | 1,302 | 3.3% |
| Carvana, LLC* | Industrial Services | 2 | 4,672 | 1.2% | 230 | 0.6% |
| Jelly Belly Candy Company | Distribution & Warehouse/Food Processing/General Merchandise | 5 | 4,650 | 1.2% | 576 | 1.4% |
| Klosterman Bakery* | Food Processing | 11 | 4,634 | 1.2% | 548 | 1.3% |
| Total Top 20 Tenants | 292 | $138,874 | 34.9% | 13,633 | 34.4% |
1 Tenant’s properties include 20 Outback Steakhouse restaurants and two Carrabba’s Italian Grill restaurants.
*Subject to a master lease.
** Includes properties leased by multiple tenants, some, not all, of which are subject to master leases.
Diversification by Industry
| Tenant Industry | # Properties | ABR (’000s) | ABR as a % of Total Portfolio | Square Feet(’000s) | SF as a % of Total Portfolio |
|---|---|---|---|---|---|
| Restaurants | 256 | $54,381 | 13.7% | 1,231 | 3.1% |
| Packaged Foods & Meats | 35 | 47,606 | 12.0% | 5,541 | 14.0% |
| Healthcare Facilities | 58 | 27,600 | 6.9% | 980 | 2.5% |
| Food Distributors | 7 | 26,263 | 6.6% | 2,534 | 6.4% |
| Auto Parts & Equipment | 46 | 20,673 | 5.2% | 3,168 | 8.0% |
| Specialty Stores | 36 | 18,739 | 4.7% | 1,637 | 4.1% |
| Distributors | 27 | 17,711 | 4.4% | 2,757 | 6.9% |
| Home Furnishing Retail | 18 | 13,018 | 3.3% | 1,858 | 4.7% |
| Specialized Consumer Services | 46 | 12,157 | 3.1% | 716 | 1.8% |
| Metal & Glass Containers | 8 | 10,696 | 2.7% | 2,206 | 5.6% |
| Industrial Machinery | 20 | 9,859 | 2.5% | 1,949 | 4.9% |
| General Merchandise Stores | 96 | 9,810 | 2.5% | 880 | 2.2% |
| Healthcare Services | 18 | 9,778 | 2.5% | 515 | 1.3% |
| Forest Products | 8 | 9,612 | 2.4% | 2,284 | 5.8% |
| Electronic Components | 2 | 7,112 | 1.8% | 466 | 1.2% |
| Other (40 industries) | 89 | 103,144 | 25.7% | 10,583 | 26.5% |
| Untenanted properties | 3 | — | — | 403 | 1.0% |
| Total | 773 | $398,159 | 100.0% | 39,708 | 100.0% |
Diversification by Geographic Location
| State/Province · # Properties · ABR(’000s) · ABR as a % of Total Portfolio · Square Feet (’000s) · SF as a % of Total Portfolio · State/Province · # Properties · ABR(’000s) · ABR as a % of Total Portfolio · Square Feet (’000s) · SF as a % of Total Portfolio | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TX | 67 | $37,631 | 9.5% | 3,615 | 9.1% | MS | 12 | 4,097 | 1.0% | 607 | 1.5% | |||
| MI | 52 | 36,023 | 9.0% | 4,018 | 10.2% | LA | 5 | 3,942 | 1.0% | 211 | 0.5% | |||
| FL | 38 | 27,007 | 6.8% | 1,805 | 4.5% | SC | 14 | 3,495 | 0.9% | 323 | 0.8% | |||
| CA | 17 | 24,092 | 6.1% | 2,282 | 5.7% | NE | 6 | 3,363 | 0.8% | 509 | 1.3% | |||
| IL | 29 | 22,624 | 5.7% | 2,364 | 6.0% | WA | 14 | 3,254 | 0.8% | 148 | 0.4% | |||
| WI | 30 | 19,445 | 4.9% | 1,945 | 4.9% | IA | 4 | 2,869 | 0.7% | 622 | 1.6% | |||
| OH | 47 | 16,530 | 4.2% | 1,582 | 4.0% | NM | 9 | 2,749 | 0.7% | 107 | 0.3% | |||
| MN | 21 | 15,855 | 4.0% | 2,500 | 6.3% | CO | 4 | 2,568 | 0.6% | 126 | 0.3% | |||
| TN | 48 | 15,106 | 3.8% | 1,084 | 2.7% | UT | 3 | 2,510 | 0.6% | 280 | 0.7% | |||
| IN | 28 | 14,925 | 3.7% | 1,832 | 4.6% | MD | 3 | 2,102 | 0.5% | 205 | 0.5% | |||
| AL | 52 | 12,191 | 3.1% | 863 | 2.2% | CT | 2 | 1,892 | 0.5% | 55 | 0.1% | |||
| GA | 33 | 11,980 | 3.0% | 1,576 | 4.0% | MT | 7 | 1,602 | 0.4% | 43 | 0.1% | |||
| NC | 28 | 10,459 | 2.6% | 1,038 | 2.6% | DE | 4 | 1,162 | 0.3% | 133 | 0.3% | |||
| PA | 22 | 9,942 | 2.5% | 1,836 | 4.6% | ND | 2 | 1,024 | 0.3% | 24 | 0.1% | |||
| KY | 23 | 9,059 | 2.3% | 927 | 2.3% | VT | 2 | 432 | 0.1% | 24 | 0.1% | |||
| MO | 19 | 8,941 | 2.2% | 1,260 | 3.2% | WY | 1 | 307 | 0.1% | 21 | 0.1% | |||
| OK | 25 | 8,900 | 2.2% | 1,006 | 2.5% | NV | 1 | 273 | 0.1% | 6 | 0.0% | |||
| AZ | 8 | 8,792 | 2.2% | 895 | 2.3% | OR | 1 | 136 | 0.0% | 9 | 0.0% | |||
| AR | 12 | 8,624 | 2.2% | 360 | 0.9% | SD | 1 | 81 | 0.0% | 9 | 0.0% | |||
| NY | 24 | 6,712 | 1.7% | 514 | 1.3% | Total U.S. | 766 | $389,942 | 98.0% | 39,279 | 98.8% | |||
| MA | 3 | 6,686 | 1.7% | 444 | 1.1% | BC | 2 | 4,827 | 1.2% | 253 | 0.7% | |||
| KS | 10 | 5,523 | 1.4% | 643 | 1.6% | ON | 3 | 2,069 | 0.5% | 101 | 0.3% | |||
| WV | 17 | 5,089 | 1.3% | 884 | 2.2% | AB | 1 | 973 | 0.2% | 51 | 0.1% | |||
| VA | 15 | 5,035 | 1.3% | 178 | 0.4% | MB | 1 | 348 | 0.1% | 24 | 0.1% | |||
| NJ | 3 | 4,913 | 1.2% | 366 | 0.9% | Total Canada | 7 | $8,217 | 2.0% | 429 | 1.2% | |||
| Grand Total | 773 | $398,159 | 100.0% | 39,708 | 100.0% | |||||||||
Our Leases
The following chart sets forth our lease expirations based upon the terms of the leases in place as of September 30, 2024.
The following table presents certain information based on lease expirations by year. Amounts are in thousands, except for number of properties.
| Year | # of Properties | ABR (’000s) | ABR as a % of Total Portfolio | Square Feet (’000s) | SF as a % of Total Portfolio |
|---|---|---|---|---|---|
| 2024 | 1 | $867 | 0.2% | 166 | 0.4% |
| 2025 | 17 | 6,084 | 1.5% | 358 | 0.9% |
| 2026 | 23 | 11,751 | 3.0% | 915 | 2.3% |
| 2027 | 28 | 25,709 | 6.5% | 2,257 | 5.7% |
| 2028 | 29 | 19,704 | 4.9% | 1,793 | 4.5% |
| 2029 | 64 | 20,420 | 5.1% | 2,679 | 6.7% |
| 2030 | 92 | 49,073 | 12.3% | 4,802 | 12.1% |
| 2031 | 32 | 8,453 | 2.1% | 843 | 2.1% |
| 2032 | 62 | 32,587 | 8.2% | 3,469 | 8.7% |
| 2033 | 49 | 18,841 | 4.7% | 1,409 | 3.5% |
| 2034 | 37 | 14,057 | 3.5% | 1,237 | 3.1% |
| 2035 | 19 | 13,938 | 3.5% | 2,021 | 5.1% |
| 2036 | 90 | 29,801 | 7.5% | 2,894 | 7.3% |
| 2037 | 26 | 23,883 | 6.0% | 1,870 | 4.7% |
| 2038 | 39 | 13,919 | 3.5% | 1,226 | 3.1% |
| 2039 | 11 | 20,806 | 5.2% | 1,758 | 4.4% |
| 2040 | 31 | 5,987 | 1.5% | 312 | 0.8% |
| 2041 | 39 | 16,739 | 4.2% | 1,367 | 3.4% |
| 2042 | 58 | 43,893 | 11.0% | 4,803 | 12.1% |
| 2043 | 12 | 10,987 | 2.8% | 796 | 2.0% |
| Thereafter | 11 | 10,660 | 2.8% | 2,330 | 6.1% |
| Total leased properties | 770 | 398,159 | 100.0% | 39,305 | 99.0% |
| Untenanted properties | 3 | — | — | 403 | 1.0% |
| Total properties | 773 | $398,159 | 100.0% | 39,708 | 100.0% |
Substantially all of our leases provide for periodic contractual rent escalations. As of September 30, 2024, leases contributing 97.4% of our ABR provided for increases in future ABR, generally ranging from 1.5% to 3.0% annually, with an ABR weighted average annual minimum increase equal to 2.0% of base rent. Generally, our rent escalators increase rent on specified dates by a fixed percentage. Our escalations provide us with a source of organic revenue growth and a measure of inflation protection. Additional information on lease escalation frequency and weighted average annual escalation rates as of September 30, 2024 is displayed below:
| Lease Escalation Frequency | % of ABR | Weighted Average Annual Minimum Increase (a) |
|---|---|---|
| Annually | 79.4% | 2.1% |
| Every 2 years | 0.1% | 1.8% |
| Every 3 years | 2.2% | 2.9% |
| Every 4 years | 1.1% | 2.4% |
| Every 5 years | 8.1% | 1.8% |
| Every 6 years | 0.1% | 1.7% |
| Other escalation frequencies | 6.4% | 1.5% |
| Flat (b) | 2.6% | — |
| Total/ABR Weighted Average | 100.0% | 2.0% |
(a)
Represents the ABR weighted average annual minimum increase of the entire portfolio as if all escalations occurred annually. For leases where rent escalates by the greater of a stated fixed percentage or the change in CPI, we have assumed an escalation equal to the stated fixed percentage in the lease. As of September 30, 2024, leases contributing 4.8% of our ABR provide for rent increases equal to the lesser of a stated fixed percentage or the change in CPI. As any future increase in CPI is unknowable at this time, we have not included an increase in the rent pursuant to these leases in the weighted average annual minimum increase presented.
(b)
Generally associated with investment grade retail tenants.
The escalation provisions of our leases (by percentage of ABR) as of September 30, 2024, are displayed in the following chart:
Transitional Capital
In addition to investing in new property acquisitions, revenue generating capital expenditures, and development fundings, we may, from time to time, invest in transitional capital opportunities, including preferred equity interests and real estate lending opportunities. Such investments are intended to be shorter in duration, capitalizing on the distressed lending environment.
The following table presents our transitional capital investments at September 30, 2024:
| Transitional Capital: | |
|---|---|
| Type | Preferred Equity |
| Investment (’000s) (a) | $52,200 |
| Stabilized cash capitalization rate (b) | 8.0% |
| Annualized initial cash NOI yield | 7.6% |
| Remaining term (years) (c) | 2.8 |
| Property type | Retail Center |
| Underlying property metrics | |
| Number of retail spaces | 28 |
| Rentable square footage (“SF”) (’000s) | 332 |
| Weighted average remaining lease term (years) | 3.8 |
| Occupancy rate (based on SF) (d) | 98.7% |
| Quarterly rent collection | 95.2% |
(a)
Agreement includes commitment to fund up to an additional $7.8 million of preferred capital.
(b)
Represents stated yield with unpaid amounts accruing with preferential payment.
(c)
Agreement contains two one-year extension options subject to a 0.50% extension fee. Repayment at end of term subject to a $3.5 million repayment fee.
(d)
Includes leases that have been executed but rent has not yet commenced.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.