Broadstone Net Lease 8K Announces First Quarter 2023 Results | BNL 3 May 23

Exhibit 99.2

Q1 2023 QUARTERLY SUPPLEMENTAL INFORMATION Broadstone Net Lease, Inc. (NYSE: BNL) is a Real Estate Investment Trust (REIT) that acquires, owns, and manages single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. www.broadstone.com

Table of Contents


Section	Page
About the Data	3
Company Overview	4
Quarterly Financial Summary	5
Balance Sheet	6
Income Statement Summary	7
Funds From Operations (FFO), Core Funds From Operations (Core FFO), and Adjusted Funds From Operations (AFFO)	8
EBITDA, EBITDAre, and Other Non-GAAP Operating Measures	9
Lease Revenues Detail	10
Capital Structure	11
Equity Rollforward	12
Debt Outstanding	13
Net Debt Metrics	14
Covenants	14
Debt Maturities	15
Investment Activity	16
Dispositions	16
Portfolio at a Glance: Key Metrics	17
Diversification: Tenants and Brands	18-19
Diversification: Property Type	20-21
Key Statistics by Property Type	22
Diversification: Tenant Industry	23
Diversification: Geography	24
Lease Expirations	25
Portfolio Occupancy	26
Definitions and Explanations	27-28

About the Data

This data and other information described herein are as of and for the three months ended March 31, 2023 unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with Broadstone Net Lease, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2022, including the financial statements and the management's discussion and analysis of financial condition and results of operations sections.

Forward Looking Statements

Information set forth herein contains forward-looking statements, which reflect our current views regarding our business, financial performance, growth prospects and strategies, market opportunities, and market trends. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "approximately," "projects," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of these words or other comparable words. All of the forward-looking statements herein are subject to various risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, performance, and achievements could differ materially from those expressed in or by the forward-looking statements and may be affected by a variety of risks and other factors. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to general economic conditions, including but not limited to increases in the rate of inflation and/or interest rates, local real estate conditions, tenant financial health, and property acquisitions and the timing of these investments and acquisitions. These and other risks, assumptions, and uncertainties are described in our filings with the SEC, which are available on the SEC's website at www.sec.gov.

You are cautioned not to place undue reliance on any forward-looking statements included herein. All forward-looking statements are made as of the date of this document and the risk that actual results, performance, and achievements will differ materially from the expectations expressed or referenced herein will increase with the passage of time. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.

Company Overview

Broadstone Net Lease, Inc. (NYSE:BNL) (the "Company," "BNL," "us," "our" and "we") is a real estate investment trust ("REIT") that acquires, owns, and manages primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. Since our inception, we have selectively invested in real estate across the industrial, healthcare, restaurant, retail, and office property types. We target properties with credit worthy tenants in industries characterized by positive business drivers and trends, where the properties are an integral part of the tenants' businesses and there are opportunities to secure long-term net leases. Through long-term net leases, our tenants are able to retain operational control of their strategically important locations, while allocating their debt and equity capital to fund core business operations rather than real estate ownership.

Executive Team

John D. Moragne

Chief Executive Officer and Member, Board of Directors

Ryan M. Albano

President and Chief Operating Officer

Kevin M. Fennell

Executive Vice President and Chief Financial Officer

John D. Callan, Jr.

Senior Vice President, General Counsel, and Secretary

Michael B. Caruso

Senior Vice President, Corporate Strategy & Investor Relations

Timothy D. Dieffenbacher

Senior Vice President, Chief Accounting Officer, and Treasurer

Laurier James Lessard, Jr.

Senior Vice President, Asset Management

Jennie L. O'Brien

Senior Vice President, Accounting, and Controller

Roderick A. Pickney

Senior Vice President, Acquisitions

Molly Kelly Wiegel

Senior Vice President, Human Resources & Administration

Andrea T. Wright

Senior Vice President, Property Management

Board of Directors

Laurie A. Hawkes

Chairman of the Board

John D. Moragne

Chief Executive Officer

Denise Brooks-Williams

Michael A. Coke

Jessica Duran

Laura Felice

David M. Jacobstein

Shekar Narasimhan

Geoffrey H. Rosenberger

James H. Watters

Company Contact Information

Michael Caruso
SVP, Corporate Strategy & Investor Relations

michael.caruso@broadstone.com

585-402-7842

Transfer Agent

Computershare Trust Company, N.A.

150 Royall Street

Canton, Massachusetts 02021

800-736-3001

Quarterly Financial Summary

(unaudited, dollars in thousands, except per share data)


	Q1 2023			Q4 2022			Q3 2022			Q2 2022			Q1 2022
Financial Summary
Investment in rental property	$	5,002,330		$	5,035,846		$	4,775,460		$	4,594,776		$	4,431,929
Less accumulated depreciation		(558,410	)		(533,965	)		(505,456	)		(479,952	)		(454,122	)
Investment in rental property, net		4,443,920			4,501,881			4,270,004			4,114,824			3,977,807
Cash and cash equivalents		15,412			21,789			75,912			16,813			54,103
Restricted cash		3,898			38,251			6,449			12,163			11,444
Total assets		5,335,868			5,457,609			5,239,192			4,979,442			4,852,520
Unsecured revolving credit facility		108,330			197,322			219,537			320,657			266,118
Mortgages, net		85,853			86,602			94,753			95,453			96,141
Unsecured term loans, net		895,006			894,692			894,378			587,098			586,884
Senior unsecured notes, net		844,744			844,555			844,367			844,178			843,990
Total liabilities		2,103,551			2,195,104			2,231,045			2,012,800			1,961,200
Total Broadstone Net Lease, Inc. stockholders' equity		3,079,207			3,092,918			2,840,692			2,798,690			2,724,641
Total equity (book value)		3,232,317			3,262,505			3,008,147			2,966,642			2,891,320

Revenues		118,992			112,135			103,524			98,013			93,841
General and administrative - other		8,924			7,814			8,439			7,907			7,899
Stock based compensation		1,492			1,503			1,503			1,381			929
General and administrative		10,416			9,317			9,942			9,288			8,828
Total operating expenses		59,559			61,320			59,133			50,875			48,162
Interest expense		21,139			23,773			20,095			17,888			16,896
Net income		41,374			36,773			28,709			35,552			28,441
Net earnings per common share, diluted	$	0.21		$	0.20		$	0.16		$	0.20		$	0.16

FFO		81,177			71,718			72,169			68,340			61,504
FFO per share, diluted	$	0.41		$	0.39		$	0.39		$	0.38		$	0.35
Core FFO		74,473			70,527			66,677			65,986			64,076
Core FFO per share, diluted	$	0.38		$	0.38		$	0.36		$	0.37		$	0.37
AFFO		67,485			65,584			63,386			62,804			60,401
AFFO per share, diluted	$	0.34		$	0.36		$	0.35		$	0.35		$	0.35

Net cash provided by operating activities		74,376			60,440			77,515			58,855			59,104
Net cash provided by (used in) investing activities		29,633			(274,485	)		(205,187	)		(172,293	)		(207,678	)
Net cash (used in) provided by financing activities		(144,739	)		191,724			181,057			76,867			186,352
Distributions declared		54,887			45,824			46,242			49,507			48,115
Distributions declared per diluted share	$	0.275		$	0.275		$	0.270		$	0.270		$	0.265

Balance Sheet

(unaudited, in thousands)


	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Assets
Accounted for using the operating method:
Land	$	760,142		$	768,667		$	755,206		$	731,208		$	709,962
Land improvements		337,296			340,385			331,858			320,513			300,300
Buildings and improvements		3,866,952			3,888,756			3,650,275			3,503,478			3,381,990
Equipment		10,422			10,422			10,422			10,422			10,422
Total accounted for using the operating method		4,974,812			5,008,230			4,747,761			4,565,621			4,402,674
Less accumulated depreciation		(558,410	)		(533,965	)		(505,456	)		(479,952	)		(454,122	)
Accounted for using the operating method, net		4,416,402			4,474,265			4,242,305			4,085,669			3,948,552
Accounted for using the direct financing method		26,947			27,045			27,128			28,584			28,684
Accounted for using the sales-type method		571			571			571			571			571
Investment in rental property, net		4,443,920			4,501,881			4,270,004			4,114,824			3,977,807
Cash and cash equivalents		15,412			21,789			75,912			16,813			54,103
Accrued rental income		142,031			135,666			129,579			124,297			120,117
Tenant and other receivables, net		2,004			1,349			791			2,069			1,160
Prepaid expenses and other assets		15,456			49,661			18,984			22,916			22,525
Interest rate swap, assets		45,490			63,390			66,602			26,562			8,944
Goodwill		339,769			339,769			339,769			339,769			339,769
Intangible lease assets, net		317,478			329,585			322,314			316,119			311,277
Debt issuance costs – unsecured revolving credit facility, net		5,542			6,013			6,485			6,956			7,427
Leasing fees, net		8,766			8,506			8,752			9,117			9,391
Total assets	$	5,335,868		$	5,457,609		$	5,239,192		$	4,979,442		$	4,852,520
Liabilities and equity
Unsecured revolving credit facility	$	108,330		$	197,322		$	219,537		$	320,657		$	266,118
Mortgages, net		85,853			86,602			94,753			95,453			96,141
Unsecured term loans, net		895,006			894,692			894,378			587,098			586,884
Senior unsecured notes, net		844,744			844,555			844,367			844,178			843,990
Interest rate swap, liabilities		—			—			—			—			1,154
Accounts payable and other liabilities		46,090			47,547			52,594			42,923			40,611
Dividends payable		54,515			54,460			49,886			49,541			47,682
Accrued interest payable		9,654			7,071			10,559			6,086			9,845
Intangible lease liabilities, net		59,359			62,855			64,971			66,864			68,775
Total liabilities		2,103,551			2,195,104			2,231,045			2,012,800			1,961,200
Equity
Broadstone Net Lease, Inc. stockholders' equity:
Preferred stock, $0.001 par value		—			—			—			—			—
Common stock, $0.00025 par value		47			47			43			43			42
Additional paid-in capital		3,434,534			3,419,395			3,148,075			3,125,377			3,056,560
Cumulative distributions in excess of retained earnings		(398,890	)		(386,049	)		(369,260	)		(350,127	)		(336,988	)
Accumulated other comprehensive Income		43,516			59,525			61,834			23,397			5,027
Total Broadstone Net Lease, Inc. stockholders’ equity		3,079,207			3,092,918			2,840,692			2,798,690			2,724,641
Non-controlling interests		153,110			169,587			167,455			167,952			166,679
Total equity		3,232,317			3,262,505			3,008,147			2,966,642			2,891,320
Total liabilities and equity	$	5,335,868		$	5,457,609		$	5,239,192		$	4,979,442		$	4,852,520

Income Statement Summary

(unaudited, in thousands, except per share data)


	Three Months Ended
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Revenues
Lease revenues, net	$	118,992		$	112,135		$	103,524		$	98,013		$	93,841
Operating expenses
Depreciation and amortization		41,784			45,606			39,400			35,511			34,290
Property and operating expense		5,886			6,397			5,636			4,696			5,044
General and administrative		10,416			9,317			9,942			9,288			8,828
Provision for impairment of investment in rental properties		1,473			—			4,155			1,380			—
Total operating expenses		59,559			61,320			59,133			50,875			48,162
Other income (expenses)
Interest income		162			40			4			—			—
Interest expense		(21,139	)		(23,773	)		(20,095	)		(17,888	)		(16,896	)
Cost of debt extinguishment		—			(77	)		(231	)		—			—
Gain on sale of real estate		3,415			10,625			61			4,071			1,196
Income taxes		(479	)		(106	)		(356	)		(401	)		(412	)
Other income (expenses)		(18	)		(751	)		4,935			2,632			(1,126	)
Net income		41,374			36,773			28,709			35,552			28,441
Net income attributable to non-controlling interests		(2,070	)		(2,041	)		(1,600	)		(2,036	)		(1,683	)
Net income attributable to Broadstone Net Lease, Inc.	$	39,304		$	34,732		$	27,109		$	33,516		$	26,758

Weighted average number of common shares outstanding
Basic1		186,130			173,283			172,578			169,555			163,809
Diluted1		196,176			183,592			182,971			180,256			174,288
Net earnings per common share2
Basic and diluted	$	0.21		$	0.20		$	0.16		$	0.20		$	0.16

1 Excludes 431,392, 396,924, 395,441, 377,407, and 370,539, weighted average shares of unvested restricted common stock for the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022.

2 Excludes $0.1 million from the numerator for the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, related to dividends declared on shares of unvested restricted common stock.

Funds From Operations (FFO), Core Funds From Operations (Core FFO), and Adjusted Funds From Operations (AFFO)

(unaudited, in thousands, except per share data)


	Three Months Ended
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Net income	$	41,374		$	36,773		$	28,709		$	35,552		$	28,441
Real property depreciation and amortization		41,745			45,570			39,366			35,479			34,259
Gain on sale of real estate		(3,415	)		(10,625	)		(61	)		(4,071	)		(1,196	)
Provision for impairment of investment in rental properties		1,473			—			4,155			1,380			—
FFO	$	81,177		$	71,718		$	72,169		$	68,340		$	61,504
Net write-offs of accrued rental income		297			—			—			—			1,326
Lease termination fees		(7,500	)		(1,678	)		(791	)		—			—
Cost of debt extinguishment		—			77			231			—			—
Gain on insurance recoveries		—			(341	)		—			—			—
Severance and executive transition costs1		481			—			3			278			120
Other (income) expenses2		18			751			(4,935	)		(2,632	)		1,126
Core FFO	$	74,473		$	70,527		$	66,677		$	65,986		$	64,076
Straight-line rent adjustment		(7,271	)		(6,826	)		(5,175	)		(4,965	)		(4,934	)
Adjustment to provision for credit losses		—			—			(4	)		(1	)		—
Amortization of debt issuance costs		986			988			948			900			856
Amortization of net mortgage premiums		(26	)		(26	)		(26	)		(25	)		(27	)
Loss on interest rate swaps and other non-cash interest expense		522			522			639			695			659
Amortization of lease intangibles		(2,691	)		(1,308	)		(1,176	)		(1,167	)		(1,158	)
Stock-based compensation		1,492			1,503			1,503			1,381			929
Deferred taxes		—			204			—			—			—
AFFO	$	67,485		$	65,584		$	63,386		$	62,804		$	60,401

Diluted weighted average shares outstanding3		196,176			183,592			182,971			180,256			174,288
Net earnings per diluted share4	$	0.21		$	0.20		$	0.16		$	0.20		$	0.16
FFO per diluted share4		0.41			0.39			0.39			0.38			0.35
Core FFO per diluted share4		0.38			0.38			0.36			0.37			0.37
AFFO per diluted share4		0.34			0.36			0.35			0.35			0.35

1 Amount includes $0.4 million of accelerated stock-based compensation and $0.1 million of executive transition costs during the three months ended March 31, 2023, related to the departure of our previous chief executive officer.

2 Amount includes $18 thousand, $0.8 million, ($4.9) million, ($2.6) million, and $1.1 million of unrealized and realized foreign exchange (gain) loss for the three months ended March 31, 2023, December 31,2022, September 30, 2022, June 30, 2022 and March 31, 2022, respectively, primarily associated with our Canadian dollar denominated revolver borrowings.

3 Excludes 431,392, 396,924, 395,441, 377,407, and 370,539, weighted average shares of unvested restricted common stock for the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, respectively.

4 Excludes $0.1 million from the numerator for the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022, related to dividends declared on shares of unvested restricted common stock.

EBITDA, EBITDAre, and Other-Non GAAP Operating Measures

(unaudited, in thousands)


	Three Months Ended
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Net income	$	41,374		$	36,773		$	28,709		$	35,552		$	28,441
Depreciation and amortization		41,784			45,606			39,400			35,511			34,290
Interest expense		21,139			23,773			20,095			17,888			16,896
Income taxes		479			105			356			401			412
EBITDA	$	104,776		$	106,257		$	88,560		$	89,352		$	80,039
Provision for impairment of investment in rental properties		1,473			—			4,155			1,380			—
Gain on sale of real estate		(3,415	)		(10,625	)		(61	)		(4,071	)		(1,196	)
EBITDAre	$	102,834		$	95,632		$	92,654		$	86,661		$	78,843
Adjustment for current quarter acquisition activity 1		406			1,283			2,358			2,780			3,225
Adjustment for current quarter disposition activity 2		(365	)		(440	)		—			(141	)		(79	)
Adjustment to exclude non-recurring and other expenses 3		(1,023	)		—			—			—			—
Adjustment to exclude gain on insurance recoveries		—			(341	)		—			—			—
Adjustment to exclude net write-offs of accrued rental income		297			—			—			—			1,326
Adjustment to exclude realized / unrealized foreign exchange (gain) loss		18			796			(4,934	)		(2,632	)		1,125
Adjustment to exclude cost of debt extinguishments		—			77			231			—			—
Adjustment to exclude lease termination fees		(7,500	)		(1,678	)		(791	)		—			—
Adjusted EBITDAre	$	94,667		$	95,329		$	89,518		$	86,668		$	84,440
General and administrative		9,935			9,318			9,942			9,288			8,825
Adjusted Net Operating Income ("NOI")	$	104,602		$	104,647		$	99,460		$	95,956		$	93,265
Straight-line rental revenue, net		(7,425	)		(7,315	)		(5,750	)		(5,616	)		(5,456	)
Other amortization and non-cash charges		(1,668	)		(1,353	)		(1,177	)		(1,167	)		(1,157	)
Adjusted Cash NOI	$	95,509		$	95,979		$	92,533		$	89,173		$	86,652
Annualized EBITDAre	$	411,336		$	382,528		$	370,616		$	346,642		$	315,375
Annualized Adjusted EBITDAre		378,668			381,315			358,072			346,672			337,759
Annualized Adjusted NOI		418,411			418,585			397,834			383,830			373,060
Annualized Adjusted Cash NOI		382,043			383,914			370,128			356,701			346,606

1 Reflects an adjustment to give effect to all investments during the quarter as if they had been acquired as of the beginning of the quarter.

2 Reflects an adjustment to give effect to all dispositions during the quarter as if they had been sold as of the beginning of the quarter.

3 Amounts include $0.1 million of executive transition costs and $0.4 million of accelerated stock-based compensation associated with the departure of our previous chief executive officer, and ($1.5) million of accelerated amortization of lease intangibles during the three months ended March 31, 2023.

Lease Revenues Detail

(unaudited, in thousands)


	Three Months Ended
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Contractual rental amounts billed for operating leases	$	98,102		$	96,208		$	91,208		$	87,505		$	84,396
Adjustment to recognize contractual operating lease billings on a straight- line basis		7,370			6,898			5,344			5,090			5,021
Net write-offs of accrued rental income		(105	)		—			—			—			(1,326	)
Variable rental amounts earned		341			721			309			291			186
Earned income from direct financing leases		691			693			719			721			723
Interest income from sales-type leases		14			15			14			15			14
Operating expenses billed to tenants		5,075			5,720			5,061			4,263			4,735
Other income from real estate transactions		7,392			2,019			874			134			42
Adjustment to revenue recognized for uncollectible rental amounts billed, net		112			(139	)		(5	)		(6	)		50
Total Lease revenues, net	$	118,992		$	112,135		$	103,524		$	98,013		$	93,841

Capital Structure

(in thousands, except per share data)


EQUITY
Shares of Common Stock		187,203
OP Units		9,309
Common Stock & OP Units		196,512
Price Per Share / Unit at March 31, 2023	$	17.01
IMPLIED EQUITY MARKET CAPITALIZATION	$	3,342,669
% of Total Capitalization		63.2	%
DEBT
Unsecured Revolving Credit Facility - 2026	$	108,330
Unsecured Term Loans		900,000
Unsecured Term Loan - 2026		400,000
Unsecured Term Loan - 2027		200,000
Unsecured Term Loan - 2029		300,000
Senior Unsecured Notes		850,000
Senior Unsecured Notes - 2027		150,000
Senior Unsecured Notes - 2028		225,000
Senior Unsecured Notes - 2030		100,000
Senior Unsecured Public Notes - 2031		375,000
Mortgage Debt - Various		85,853
TOTAL DEBT	$	1,944,183
% of Total Capitalization		36.8	%
Floating Rate Debt %		1.8	%
Fixed Rate Debt %		98.2	%
Secured Debt %		4.4	%
Unsecured Debt %		95.6	%

Total Capitalization	$	5,286,852
Less: Cash and Cash Equivalents		(15,412	)
Enterprise Value	$	5,271,440

Equity Rollforward

(in thousands)


	Shares of Common Stock			OP Units			Total Diluted Shares
Balance, January 1, 2023		186,114			10,205			196,319
Grants of restricted stock awards		259			—			259
Retirement of common shares under equity incentive plan		(66	)		—			(66	)
OP conversion		896			(896	)		—
Balance, March 31, 2023		187,203			9,309			196,512

Debt Outstanding

(in thousands)


	Outstanding Balance
	March 31,			December 31,
	2023			2022			Interest Rate	Maturity Date
Unsecured revolving credit facility	$	108,330		$	197,322		Applicable reference rate + 0.85%1	Mar. 2026
Unsecured term loans:
2026 Unsecured Term Loan		400,000			400,000		one-month LIBOR + 1.00%	Feb. 2026
2027 Unsecured Term Loan		200,000			200,000		one-month adjusted SOFR + 0.95%	Aug. 2027
2029 Unsecured Term Loan		300,000			300,000		one-month adjusted SOFR + 1.25%	Aug. 2029
Total unsecured term loans		900,000			900,000
Unamortized debt issuance costs, net		(4,994	)		(5,308	)
Total unsecured term loans, net		895,006			894,692
Senior unsecured notes:
2027 Senior Unsecured Notes - Series A		150,000			150,000		4.84%	Apr. 2027
2028 Senior Unsecured Notes - Series B		225,000			225,000		5.09%	Jul. 2028
2030 Senior Unsecured Notes - Series C		100,000			100,000		5.19%	Jul. 2030
2031 Senior Unsecured Public Notes		375,000			375,000		2.60%	Sep. 2031
Total senior unsecured notes		850,000			850,000
Unamortized debt issuance costs and original issuance discount, net		(5,256	)		(5,445	)
Total senior unsecured notes, net		844,744			844,555
Total unsecured debt, net	$	1,848,080		$	1,936,569

1 At March 31, 2023 a balance of $34.5 million was subject to the one-month SOFR. The remaining balance includes $100 million CAD borrowings remeasured to $73.8 million USD, which was subject to the one-month Canadian Dollar Offered Rate.


	Origination	Maturity
	Date	Date	Interest	March 31,			December 31,
Lender	(Month/Year)	(Month/Year)	Rate	2023			2022
Wilmington Trust National Association	Apr-19	Feb-28	4.92%	$	45,187		$	45,516
Wilmington Trust National Association	Jun-18	Aug-25	4.36%		19,043			19,150
PNC Bank	Oct-16	Nov-26	3.62%		16,566			16,675
Aegon	Apr-12	Oct-23	6.38%		5,197			5,413
Total mortgages					85,993			86,754
Debt issuance costs, net					(140	)		(152	)
Mortgages, net				$	85,853		$	86,602


Year of Maturity	Revolving Credit Facility		Mortgages		Term Loans		Senior Notes		Total
2023	$	—	$	6,820	$	—	$	—	$	6,820
2024		—		2,260		—		—		2,260
2025		—		20,195		—		—		20,195
2026		108,330		16,843		400,000		—		525,173
2027		—		1,597		200,000		150,000		351,597
Thereafter		—		38,278		300,000		700,000		1,038,278
Total	$	108,330	$	85,993	$	900,000	$	850,000	$	1,944,323

Net Debt Metrics

(in thousands)



	March 31, 2023	December 31, 2022	September 30, 2022	June 30, 2022	March 31, 2022
Debt
Unsecured revolving credit facility	$108,330	$197,322	$219,537	$320,657	$266,118
Unsecured term loans, net	895,006	894,692	894,378	587,098	586,884
Senior unsecured notes, net	844,744	844,555	844,367	844,178	843,990
Mortgages, net	85,853	86,602	94,753	95,453	96,141
Debt issuance costs	10,390	10,905	11,498	8,991	9,419
Gross Debt	1,944,323	2,034,076	2,064,533	1,856,377	1,802,552
Cash and cash equivalents	(15,412)	(21,789)	(75,912)	(16,813)	(54,103)
Restricted cash	(3,898)	(38,251)	(6,449)	(12,163)	(11,444)
Net Debt	$1,925,013	$1,974,036	$1,982,172	$1,827,401	$1,737,005
Anticipated proceeds from forward equity agreement	—	—	(270,732)	—	—
Pro Forma Net Debt	$1,925,013	$1,974,036	$1,711,440	$1,827,401	$1,737,005

Net Debt to Annualized EBITDAre	4.7x	5.2x	5.3x	5.3x	5.5x
Net Debt to Annualized Adjusted EBITDAre	5.1x	5.2x	5.5x	5.3x	5.1x
Pro Forma Net Debt to Annualized Adjusted EBITDAre	5.1x	5.2x	4.8x	5.3x	5.1x

Covenants

The following is a summary of key financial covenants for the Company's unsecured debt instruments. The covenants associated with the Revolving Credit Facility, Unsecured Term Loans with commercial banks, and the Series A-C Senior Unsecured Notes, are reported to the respective lenders via quarterly covenant reporting packages. The covenants associated with the 2031 Senior Unsecured Public Notes are not required to be reported externally to third parties, and are instead calculated in connection with borrowing activity and for financial reporting purposes only. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of March 31, 2023, the Company believes it is in compliance with the covenants.

Covenants

Required

Revolving Credit Facility and Unsecured Term Loans

Senior Unsecured
Notes Series
A, B, & C

2031 Senior Unsecured Public Notes

Leverage ratio

≤ 0.60 to 1.00

0.33

0.34

Not Applicable

Secured indebtedness ratio

≤ 0.40 to 1.00

0.02

Not Applicable

Unencumbered coverage ratio

≥ 1.75 to 1.00

3.82

Not Applicable

Fixed charge coverage ratio

≥ 1.50 to 1.00

3.94

3.93

Not Applicable

Total unsecured indebtedness to
total unencumbered eligible
property value

≤ 0.60 to 1.00

0.34

0.36

Not Applicable

Dividends and other restricted
payments

Only applicable
in case of default

Not Applicable

Aggregate debt ratio

≤ 0.60 to 1.00

Not Applicable

0.36

Consolidated income available for
debt to annual debt service
charge

≥ 1.50 to 1.00

Not Applicable

4.59

Total unencumbered assets to
total unsecured debt

≥ 1.50 to 1.00

Not Applicable

2.83

Secured debt ratio

≤ 0.40 to 1.00

Not Applicable

0.02

Debt Maturities

(dollars in millions)

The Company utilizes diversified sources of debt capital including unsecured bank debt, unsecured notes, and secured mortgages (where appropriate).

Investment Activity1

(square feet and dollars in thousands)

The following tables summarize the Company's investment activity during 2023.


	Q1 2023
Acquisitions:
Number of transactions		1
Number of properties		1
Square feet		10
Acquisition price	$	5,221
Initial cash cap rate		6.8	%
Initial GAAP cap rate		8.0	%
Weighted avg. lease term (years)		20.1
Weighted average annual rent increase		1.8	%

Revenue generating capital expenditures:
Number of existing properties		2
Investments2	$	14,825
Initial cash cap rate		7.0	%
Weighted avg. lease term (years)		18.2
Weighted average annual rent increase		1.8	%

Total investments	$	20,046
Total initial cash cap rate		7.0	%
Total weighted average lease term (years)		18.7
Total weighted average annual rent increase		1.8	%

1 During the quarter, we entered into an agreement under the terms of an existing lease to substitute two properties with a tenant in exchange for one new property of equal value. Property substitutions are not included in the acquisition/disposition activity, however will affect the total number of properties reported as of March 31, 2023.

2 Total unfunded investment commitments at March 31, 2023, were $18.0 million


Q1 Acquisitions:
Property Type	Number of Properties		Square Feet		Weighted Average Lease Term (years)		Weighted Average Annual Rent Increase			Acquisition Price
Retail		1		10		20.1		1.8	%	$	5,221

Dispositions1

(square feet and dollars in thousands)

The following table summarizes the Company's property disposition activity during 2023.


Q1 2023
Property Type	Number of Properties	Square Feet	Acquisition Price	Disposition Price	Net Book Value
Office3	1	282	$33,050	32,000	$30,881
Industrial	1	74	16,240	18,550	15,015
Restaurant	1	5	1,186	1,324	1,099
Total Properties	3	361	$50,476	$51,874	$46,995
Weighted average cash cap rate3					6.0%

3 Sale of office asset executed simultaneously with a $7.5 million lease buyout for total proceeds of $39.5 million, representing an all-in cash capitalization rate of 6.1%. Amounts have been excluded from the weighted average cash cap rate due to the nature of the separate transactions.

Portfolio at a Glance: Key Metrics


	March 31, 2023	December 31, 2022	September 30, 2022	June 30, 2022	March 31, 2022
Properties1	801	804	790	764	752
U.S. States	44	44	44	44	43
Canadian Provinces	4	4	4	4	4
Total Annualized Base Rent	$389.5M	$389.1M	$371.9M	$360.0M	$347.7M
Total Rentable Sq. Footage	39.1M	39.1M	36.8M	34.4M	32.8M
Tenants	221	221	218	213	210
Brands	209	211	208	203	198
Industries	54	55	56	57	56
Occupancy (based on SF)	99.4%	99.4%	99.3%	99.8%	99.8%
Rent Collection	100.0%	99.9%	100.0%	100.0%	100.0%
Top 10 Tenant Concentration	19.2%	19.0%	17.1%	16.5%	17.1%
Top 20 Tenant Concentration	31.4%	31.4%	29.8%	29.4%	30.0%
Investment Grade (tenant/guarantor)	15.6%	15.4%	16.0%	16.4%	15.3%
Financial Reporting Coverage2	94.3%	94.3%	94.1%	94.0%	94.2%
Rent Coverage Ratio (Restaurants Only)	3.2x	3.2x	3.1x	3.3x	3.2x
Weighted Average Annual Rent Increases	2.0%	2.0%	2.0%	2.0%	2.0%
Weighted Average Remaining Lease Term	10.8 years	10.9 years	10.7 years	10.6 years	10.5 years
Master Leases (based on ABR)
Total Portfolio	41.2%	40.8%	37.7%	36.1%	34.5%
Multi-site tenants	69.3%	67.7%	65.4%	63.9%	61.6%

2 Includes 7.9%, 8.5%, 8.8%, 9.0%, and 9.1%, related to tenants not required to provide financial information under the terms of our lease, but whose financial statements are available publicly at March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, and March 31, 2022.

Diversification: Tenants & Brands

Top 20 Tenants


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	$	15,605		4.0	%		2,250		5.8	%
AHF, LLC*	Distribution & Warehouse/Manufacturing		8		9,377		2.4	%		2,284		5.8	%
Jack's Family Restaurants LP*	Quick Service Restaurants		43		7,309		1.9	%		147		0.4	%
Joseph T. Ryerson & Son, Inc	Distribution & Warehouse		11		6,491		1.7	%		1,537		3.9	%
Red Lobster Hospitality & Red Lobster Restaurants LLC*	Casual Dining		19		6,178		1.6	%		157		0.4	%
Axcelis Technologies, Inc.	Flex and R&D		1		6,126		1.6	%		417		1.1	%
J. Alexander's, LLC*	Casual Dining		16		6,115		1.6	%		131		0.3	%
Hensley & Company*	Distribution & Warehouse		3		5,989		1.5	%		577		1.5	%
Dollar General Corporation	General Merchandise		60		5,962		1.5	%		562		1.4	%
BluePearl Holdings, LLC**	Animal Health Services		13		5,591		1.4	%		166		0.5	%
Total Top 10 Tenants			181	$	74,743		19.2	%		8,228		21.1	%

Outback Steakhouse of Florida LLC*	Casual Dining		22	$	5,365		1.4	%		140		0.4	%
Tractor Supply Company	General Merchandise		21		5,349		1.4	%		417		1.1	%
Big Tex Trailer Manufacturing Inc.*	Automotive/Distribution & Warehouse/Manufacturing/ Corporate Headquarters		17		5,056		1.3	%		1,302		3.3	%
Krispy Kreme Doughnut Corporation	Quick Service Restaurants/ Food Processing		27		5,034		1.3	%		156		0.4	%
Salm Partners, LLC*	Food Processing		2		4,592		1.2	%		368		0.9	%
Nestle' Dreyer's Ice Cream Company1	Cold Storage		1		4,543		1.2	%		309		0.8	%
Carvana, LLC*	Industrial Services		2		4,510		1.2	%		230		0.6	%
Klosterman Bakery*	Food Processing		11		4,500		1.2	%		549		1.4	%
Arkansas Surgical Hospital	Surgical		1		4,476		1.0	%		129		0.3	%
American Signature, Inc.	Home Furnishings		6		4,309		1.0	%		474		1.2	%
Total Top 20 Tenants			291	$	122,477		31.4	%		12,302		31.5	%

1Nestle's ABR excludes $1.6 million of rent paid under a sub-lease for an additional property, which will convert to a prime lease no later than August, 2024

*Subject to a master lease.

**Includes properties leased by multiple tenants, some, not all, of which are subject to master leases.

Top 20 Brands


Brand	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		15,605		4.0	%		2,250		5.8	%
AHF Products*	Distribution & Warehouse/ Manufacturing		8		9,377		2.4	%		2,284		5.8	%
Jack's Family Restaurants*	Quick Service Restaurants		43		7,309		1.9	%		147		0.4	%
Ryerson	Distribution & Warehouse		11		6,491		1.7	%		1,537		3.9	%
Red Lobster*	Casual Dining		19		6,178		1.6	%		157		0.4	%
Axcelis	Flex and R&D		1		6,126		1.6	%		417		1.1	%
Hensley*	Distribution & Warehouse		3		5,989		1.5	%		577		1.5	%
Dollar General	General Merchandise		60		5,962		1.5	%		562		1.4	%
BluePearl Veterinary Partners**	Animal Health Services		13		5,591		1.5	%		165		0.4	%
Bob Evans Farms*	Casual Dining/Food Processing		21		5,391		1.5	%		281		0.7	%
Total Top 10 Brands			186	$	74,019		19.0	%		8,377		21.4	%

Tractor Supply Co.	General Merchandise		21		5,349		1.4	%		417		1.1	%
Big Tex Trailers*	Automotive/Distribution & Warehouse/Manufacturing/ Corporate Headquarters		17		5,056		1.3	%		1,302		3.3	%
Krispy Kreme	Quick Service Restaurants/ Food Processing		27		5,034		1.3	%		156		0.4	%
Outback Steakhouse*	Casual Dining		20		4,641		1.2	%		126		0.3	%
Salm Partners, LLC*	Food Processing		2		4,592		1.2	%		368		0.9	%
Nestle' Dreyer's Ice Cream Company1	Cold Storage		1		4,543		1.2	%		309		0.8	%
Carvana*	Industrial Services		2		4,510		1.2	%		230		0.6	%
Klosterman Baking Company*	Food Processing		11		4,500		1.2	%		549		1.4	%
Arkansas Surgical Hospital	Surgical		1		4,476		1.1	%		129		0.3	%
Wendy's	Quick Service Restaurants		29		4,325		1.1	%		84		0.2	%
Total Top 20 Brands			317	$	121,045		31.1	%		12,047		30.7	%

1Nestle's ABR excludes $1.6 million of rent paid under a sub-lease for an additional property, which will convert to a prime lease no later than August, 2024

*Subject to a master lease.

**Includes properties leased by multiple tenants, some, not all, of which are subject to master leases.

Diversification: Property Type

(rent percentages based on ABR)

Diversification: Property Type (continued)


Property Type	# Properties		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Industrial
Manufacturing		79	$	64,375		16.5	%		12,142		31.1	%
Distribution & Warehouse		47		51,610		13.3	%		9,459		24.2	%
Food Processing		33		44,215		11.4	%		5,442		13.9	%
Flex and R&D		7		17,666		4.5	%		1,457		3.7	%
Cold Storage		4		12,827		3.3	%		933		2.4	%
Industrial Services		22		10,891		2.8	%		587		1.5	%
Untenanted		1		—		—			122		0.3	%
Industrial Total		193		201,584		51.8	%		30,142		77.1	%
Healthcare
Clinical		52		27,181		7.0	%		1,091		2.8	%
Healthcare Services		30		11,118		2.9	%		496		1.3	%
Animal Health Services		27		10,846		2.8	%		405		1.0	%
Surgical		12		10,475		2.7	%		329		0.9	%
Life Science		9		7,901		2.0	%		549		1.4	%
Healthcare Total		130		67,521		17.4	%		2,870		7.4	%
Restaurant
Casual Dining		101		27,341		7.0	%		673		1.7	%
Quick Service Restaurants		146		25,027		6.4	%		499		1.3	%
Restaurant Total		247		52,368		13.4	%		1,172		3.0	%
Retail
General Merchandise		132		24,714		6.3	%		1,865		4.8	%
Automotive		68		12,628		3.2	%		777		2.0	%
Home Furnishings		13		7,147		1.8	%		797		2.0	%
Child Care		2		731		0.3	%		20		0.1	%
Retail Total		215		45,220		11.6	%		3,459		8.9	%
Office
Corporate Headquarters		5		9,912		2.5	%		615		1.6	%
Strategic Operations		7		8,389		2.2	%		408		0.9	%
Call Center		3		4,478		1.1	%		346		0.8	%
Untenanted		1		—		—			46		0.3	%
Office Total		16		22,779		5.8	%		1,415		3.6	%
Total		801	$	389,472		100.0	%		39,058		100.0	%

Key Statistics by Property Type


	Q1 2023			Q4 2022			Q3 2022			Q2 2022			Q1 2022
Industrial
Number of properties		193			195			185			166			158
Square feet (000s)		30,142			29,947			27,631			25,279			23,881
Weighted average lease term (years)		11.9			11.2			11.2			10.8			10.3
Weighted average annual rent escalation		2.0	%		2.0	%		2.0	%		2.0	%		2.0	%
Percentage of total ABR		51.8	%		51.5	%		49.0	%		47.6	%		46.4	%

Healthcare
Number of properties		130			130			130			129			128
Square feet (000s)		2,870			2,870			2,869			2,855			2,813
Weighted average lease term (years)		7.0			8.2			8.2			8.4			8.6
Weighted average annual rent escalation		2.3	%		2.2	%		2.2	%		2.2	%		2.2	%
Percentage of total ABR		17.4	%		17.1	%		18.5	%		18.8	%		19.1	%

Restaurant
Number of properties		247			248			250			247			250
Square feet (000s)		1,172			1,177			1,191			1,174			1,188
Weighted average lease term (years)		14.3			14.8			14.8			15.0			15.3
Weighted average annual rent escalation		1.8	%		1.8	%		1.8	%		1.8	%		1.9	%
Percentage of total ABR		13.4	%		13.5	%		14.1	%		14.3	%		15.0	%

Retail
Number of properties		215			214			209			206			200
Square feet (000s)		3,459			3,448			3,411			3,404			3,235
Weighted average lease term (years)		10.2			10.5			10.5			10.9			11.2
Weighted average annual rent escalation		1.6	%		1.6	%		1.6	%		1.6	%		1.6	%
Percentage of total ABR		11.6	%		11.5	%		11.7	%		12.0	%		12.0	%

Office
Number of properties		16			17			16			16			16
Square feet (000s)		1,415			1,697			1,686			1,685			1,685
Weighted average lease term (years)		6.0			6.1			6.1			6.0			6.3
Weighted average annual rent escalation		2.5	%		2.5	%		2.5	%		2.4	%		2.5	%
Percentage of total ABR		5.8	%		6.4	%		6.7	%		7.3	%		7.5	%

Diversification: Tenant Industry


Industry	# Properties		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
Healthcare Facilities		104	$	53,183		13.7	%		2,062		5.3	%
Restaurants		250		53,141		13.6	%		1,214		3.1	%
Packaged Foods & Meats		29		38,843		10.0	%		4,713		12.1	%
Distributors		27		15,962		4.1	%		2,695		6.9	%
Auto Parts & Equipment		43		15,623		4.0	%		2,676		6.9	%
Specialty Stores		31		14,078		3.6	%		1,338		3.4	%
Food Distributors		7		13,799		3.5	%		1,712		4.4	%
Home Furnishing Retail		18		12,684		3.3	%		1,858		4.8	%
Specialized Consumer Services		49		12,672		3.3	%		728		1.9	%
Metal & Glass Containers		8		10,114		2.6	%		2,206		5.6	%
General Merchandise Stores		96		9,640		2.5	%		880		2.3	%
Industrial Machinery		20		9,408		2.4	%		1,949		5.0	%
Forest Products		8		9,377		2.4	%		2,284		5.8	%
Healthcare Services		18		9,299		2.4	%		515		1.3	%
Aerospace & Defense		6		7,565		1.9	%		746		1.9	%
Other (39 industries)		85		104,084		26.7	%		11,258		28.7	%
Untenanted properties		2		—		—			224		0.6	%
Total		801	$	389,472		100.0	%		39,058		100.0	%

Diversification: Geography

(rent percentages based on ABR)


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		72	$	38,037		9.8	%		3,621		9.3	%	WA		15		4,330		1.1	%		150		0.4	%
MI		55		32,555		8.4	%		3,811		9.8	%	LA		4		3,407		0.9	%		194		0.5	%
IL		32		24,165		6.2	%		2,424		6.2	%	MS		11		3,320		0.9	%		430		1.1	%
WI		35		21,792		5.6	%		2,163		5.5	%	NE		6		3,175		0.8	%		509		1.3	%
CA		13		18,827		4.8	%		1,718		4.4	%	MD		4		3,052		0.8	%		293		0.7	%
OH		47		18,680		4.8	%		1,728		4.4	%	SC		13		2,937		0.8	%		308		0.8	%
FL		42		16,411		4.2	%		844		2.2	%	IA		4		2,804		0.7	%		622		1.6	%
IN		32		15,843		4.1	%		1,906		4.9	%	NM		9		2,734		0.7	%		107		0.3	%
MN		21		15,396		4.0	%		2,500		6.4	%	CO		4		2,501		0.6	%		126		0.3	%
TN		50		15,150		3.9	%		1,103		2.8	%	UT		3		2,432		0.6	%		280		0.7	%
NC		37		14,023		3.6	%		1,435		3.7	%	CT		2		1,767		0.5	%		55		0.1	%
AL		53		12,151		3.1	%		873		2.2	%	MT		7		1,582		0.4	%		43		0.1	%
GA		33		11,535		3.0	%		1,576		4.0	%	DE		4		1,167		0.3	%		133		0.3	%
AZ		9		10,876		2.8	%		909		2.3	%	ND		2		954		0.2	%		28		0.1	%
PA		22		9,677		2.5	%		1,836		4.7	%	VT		2		420		0.1	%		24		0.1	%
NY		26		9,268		2.4	%		680		1.7	%	WY		1		307		0.1	%		21		0.1	%
KY		24		8,465		2.2	%		900		2.3	%	NV		1		268		0.1	%		6		0.0	%
MA		4		8,232		2.1	%		744		1.9	%	OR		1		136		0.0	%		9		0.0	%
OK		22		8,107		2.1	%		987		2.5	%	SD		1		81		0.0	%		9		0.0	%
AR		11		7,722		2.0	%		283		0.7	%	Total US		794	$	381,406		97.9	%		38,628		98.9	%
MO		12		6,119		1.6	%		1,138		2.9	%	BC		2	$	4,584		1.2	%		253		0.6	%
KS		11		5,638		1.4	%		648		1.7	%	ON		3		2,126		0.5	%		101		0.3	%
VA		17		5,479		1.4	%		204		0.5	%	AB		1		999		0.3	%		51		0.1	%
WV		17		4,975		1.3	%		884		2.3	%	MB		1		357		0.1	%		25		0.1	%
NJ		3		4,909		1.3	%		366		1.1	%	Total Canada		7	$	8,066		2.1	%		430		1.1	%
													Grand Total		801	$	389,472		100.0	%		39,058		100.0	%

Lease Expirations

(rent percentages based on ABR)


Expiration Year	# Properties		# Leases		ABR ($'000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
2023		5		7	$	4,497		1.2	%		504		1.3	%
2024		9		9		10,640		2.7	%		1,239		3.2	%
2025		19		22		6,905		1.8	%		385		1.0	%
2026		34		35		17,235		4.4	%		1,150		2.9	%
2027		29		30		24,166		6.2	%		2,079		5.3	%
2028		36		36		24,220		6.2	%		2,262		5.8	%
2029		72		73		22,541		5.8	%		2,724		7.0	%
2030		101		101		54,479		14.0	%		5,110		13.1	%
2031		33		33		8,640		2.2	%		805		2.1	%
2032		62		63		31,896		8.2	%		3,469		8.9	%
2033		50		50		18,888		4.8	%		1,593		4.1	%
2034		33		33		6,305		1.6	%		409		1.0	%
2035		19		19		13,966		3.6	%		2,021		5.2	%
2036		87		87		26,485		6.8	%		2,931		7.5	%
2037		23		23		17,111		4.4	%		1,124		2.9	%
2038		36		36		9,573		2.5	%		725		1.9	%
2039		10		10		6,858		1.8	%		798		2.0	%
2040		31		31		5,784		1.5	%		312		0.8	%
2041		40		40		20,875		5.4	%		1,731		4.4	%
2042		59		59		43,758		11.2	%		4,813		12.3	%
Thereafter		11		11		14,650		3.7	%		2,650		6.7	%
Untenanted properties		2		—		—		—			224		0.6	%
Total		801		808	$	389,472		100.0	%		39,058		100.0	%

Occupancy

Occupancy by Rentable Square Footage

Change in Occupancy


	Number of properties
Vacant properties at January 1, 2023		3
Lease expirations1		2
Leasing activities		(3	)
Vacant dispositions		—
Vacant properties at March 31, 2023		2

1 Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved in the periods indicated above.

Definitions and Explanations

Adjusted NOI, Annualized Adjusted NOI, Adjusted Cash NOI and Annualized Adjusted Cash NOI: Our reported results and net earnings per diluted share are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). Adjusted NOI and Adjusted Cash NOI are non-GAAP financial measures that we believe are useful to assess property-level performance. We compute Adjusted NOI by adjusting Adjusted EBITDAre (defined below) to exclude general and administrative expenses incurred at the corporate level. Given the net lease nature of our portfolio, we do not incur general and administrative expenses at the property level. To compute Adjusted Cash NOI, we adjust Adjusted NOI to exclude non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash items, based on an estimate calculated as if all investment and disposition activity that took place during the quarter had occurred on the first day of the quarter. We then annualize quarterly Adjusted NOI and Adjusted Cash NOI by multiplying each amount by four to compute Annualized Adjusted NOI and Annualized Adjusted Cash NOI, respectively, which are also non-GAAP financial measures. We believe Adjusted NOI and Adjusted Cash NOI provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis. We believe that the exclusion of certain non-cash revenues and expenses from Adjusted Cash NOI is a useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by non-cash revenues or expenses. You should not unduly rely on Annualized Adjusted NOI and Annualized Adjusted Cash NOI as they are based on assumptions and estimates that may prove to be inaccurate. Our actual reported Adjusted NOI and Adjusted Cash NOI for future periods may be significantly different from our Annualized Adjusted NOI and Annualized Adjusted Cash NOI. Additionally, our computation of Adjusted NOI and Adjusted Cash NOI may differ from the methodology for calculating these metrics used by companies in our industry, and, therefore, may not be comparable to similarly titled measures reported by other companies.

Annualized Base Rent (ABR): We define ABR as the annualized contractual cash rent due for the last month of the reporting period, excluding the impacts of short-term rent deferrals, abatements, or free rent, and adjusted to remove rent from properties sold during the month and to include a full month of contractual cash rent for investments made during the month.

Cash Cap Rate: Cash Cap Rate represents the estimated first year cash yield to be generated on a real estate investment, which was estimated at the time of investment based on the contractually specified cash base rent for the first full year after the date of the investment, divided by the purchase price for the property excluding capitalized acquisitions costs.

EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre: EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre are non-GAAP financial measures. We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. EBITDA is a measure commonly used in our industry. We believe that this ratio provides investors and analysts with a measure of our performance that includes our operating results unaffected by the differences in capital structures, capital investment cycles and useful life of related assets compared to other companies in our industry. We compute EBITDAre in accordance with the definition adopted by Nareit. Nareit defines EBITDAre as EBITDA excluding gains (loss) from the sales of depreciable property and provisions for impairment on investment in real estate. We believe EBITDA and EBITDAre are useful to investors and analysts because they provide important supplemental information about our operating performance exclusive of certain non-cash and other costs. Adjusted EBITDAre represents EBITDAre, adjusted to reflect revenue producing acquisitions and dispositions for the quarter as if such acquisitions and dispositions had occurred at the beginning of the quarter, and to exclude certain GAAP income and expense amounts that are either non-cash, such as cost of debt extinguishments, realized or unrealized gains and losses on foreign currency transactions, or gains on insurance recoveries, or that we believe are one time, or unusual in nature because they relate to unique circumstances or transactions that had not previously occurred and which we do not anticipate occurring in the future, and to eliminate the impact of lease termination fees, and other items that are not a result of normal operations. We then annualize quarterly Adjusted EBITDAre by multiplying it by four to compute Annualized Adjusted EBITDAre. Our reported EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider these measures as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

Funds From Operations (FFO), Core Funds From Operations (Core FFO), and Adjusted Funds From Operations (AFFO): FFO, Core FFO, and AFFO are non-GAAP measures. We believe the use of FFO, Core FFO, and AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute Core FFO by adjusting FFO to exclude certain GAAP income and expense amounts that we believe are infrequently recurring, unusual in nature, or not related to its core real estate operations, including write-offs or recoveries of accrued rental income, lease termination fees, the gain on insurance recoveries, cost of debt extinguishments, unrealized and realized gains or losses on foreign currency transactions, severance and executive transition costs, and other extraordinary items. We compute AFFO by adjusting Core FFO for certain non-cash revenues and expenses, including straight-line rents, amortization of lease intangibles, amortization of debt issuance costs, amortization of net mortgage premiums, (gain) loss on interest rate swaps and other non-cash interest expense, stock-based compensation, and other specified non-cash items.

Definitions and Explanations (continued)

GAAP Cap Rate: GAAP Cap Rate represents the estimated first year GAAP yield to be generated on a real estate investment, which was computed at the time of investment based on the first full year of rental income computed in accordance with GAAP, divided by the purchase price including capitalized acquisition costs for the property.

Gross Debt: We define Gross Debt as total debt plus debt issuance costs and original issuance discount.

Net Debt: Net Debt is a non-GAAP financial measure. We define Net Debt as our Gross Debt less cash and cash equivalents and restricted cash.

Occupancy: Occupancy or a specified percentage of our portfolio that is "occupied" or "leased" means as of a specified date the quotient of (1) the total rentable square footage of our properties minus the square footage of our properties that are vacant and from which we are not receiving any rental payment, and (2) the total square footage of our properties.

Rent Coverage Ratio: Rent Coverage Ratio means the ratio of tenant-reported or, when available, management's estimate, based on tenant-reported financial information, of annual earnings before interest, taxes, depreciation, amortization, and cash rent attributable to the leased property (or properties, in the case of a master lease) to the annualized base rental obligation as of a specified date.

Broadstone Net Lease (BNL) 8-KBroadstone Net Lease Announces First Quarter 2023 Results