Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 29, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | BROADSTONE NET LEASE, INC. | |
Entity Central Index Key | 0001424182 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 188,430,015 | |
Entity Shell Company | false | |
Entity File Number | 001-39529 | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 26-1516177 | |
Entity Address, Address Line One | 207 High Point Drive | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Victor | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 14564 | |
City Area Code | 585 | |
Local Phone Number | 287-6500 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, $0.00025 par value | |
Trading Symbol | BNL | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Total accounted for using the operating method | $ 4,639,876 | $ 4,888,696 |
Less accumulated depreciation | (606,225) | (626,597) |
Accounted for using the operating method, net | 4,033,651 | 4,262,099 |
Accounted for using the direct financing method | 26,522 | 26,643 |
Accounted for using the sales-type method | 571 | 572 |
Property under development | 133,064 | 94,964 |
Investment in rental property, net | 4,193,808 | 4,384,278 |
Cash and cash equivalents | 221,740 | 19,494 |
Accrued rental income | 149,203 | 152,724 |
Tenant and other receivables, net | 836 | 1,487 |
Prepaid expenses and other assets | 33,149 | 36,661 |
Interest rate swap, assets | 57,900 | 46,096 |
Goodwill | 339,769 | 339,769 |
Intangible lease assets, net | 273,250 | 288,226 |
Total assets | 5,269,655 | 5,268,735 |
Liabilities and equity | ||
Unsecured revolving credit facility | 73,820 | 90,434 |
Mortgages, net | 78,517 | 79,068 |
Unsecured term loans, net | 896,260 | 895,947 |
Senior unsecured notes, net | 845,498 | 845,309 |
Accounts payable and other liabilities | 40,655 | 47,534 |
Dividends payable | 56,871 | 56,869 |
Accrued interest payable | 9,377 | 5,702 |
Intangible lease liabilities, net | 50,953 | 53,531 |
Total liabilities | 2,051,951 | 2,074,394 |
Commitments and contingencies (Note 16) | ||
Broadstone Net Lease, Inc. stockholders' equity: | ||
Preferred stock, $0.001 par value; 20,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, $0.00025 par value; 500,000 shares authorized, 188,435 and 187,614 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 47 | 47 |
Additional paid-in capital | 3,446,910 | 3,440,639 |
Cumulative distributions in excess of retained earnings | (430,169) | (440,731) |
Accumulated other comprehensive income | 56,834 | 49,286 |
Total Broadstone Net Lease, Inc. stockholders’ equity | 3,073,622 | 3,049,241 |
Non-controlling interests | 144,082 | 145,100 |
Total equity | 3,217,704 | 3,194,341 |
Total liabilities and equity | 5,269,655 | 5,268,735 |
Land | ||
Assets | ||
Total accounted for using the operating method | 724,199 | 748,529 |
Land Improvements | ||
Assets | ||
Total accounted for using the operating method | 316,170 | 328,746 |
Buildings and Improvements | ||
Assets | ||
Total accounted for using the operating method | 3,591,260 | 3,803,156 |
Equipment | ||
Assets | ||
Total accounted for using the operating method | $ 8,247 | $ 8,265 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000 | 20,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.00025 | $ 0.00025 |
Common stock, shares authorized | 500,000 | 500,000 |
Common stock, shares issued | 188,435 | 187,614 |
Common stock, shares outstanding | 188,435 | 187,614 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues | ||
Lease revenues, net | $ 105,366 | $ 118,992 |
Operating expenses | ||
Depreciation and amortization | 37,772 | 41,784 |
Property and operating expense | 5,660 | 5,886 |
General and administrative | 9,432 | 10,416 |
Provision for impairment of investment in rental properties | 26,400 | 1,473 |
Total operating expenses | 79,264 | 59,559 |
Other income (expenses) | ||
Interest income | 233 | 162 |
Interest expense | (18,578) | (21,139) |
Gain on sale of real estate | 59,132 | 3,415 |
Income taxes | (408) | (479) |
Other income (expenses) | 1,696 | (18) |
Net income | 68,177 | 41,374 |
Net income attributable to non-controlling interests | (3,063) | (2,070) |
Net income attributable to Broadstone Net Lease, Inc. | $ 65,114 | $ 39,304 |
Weighted average number of common shares outstanding | ||
Basic | 187,290,000 | 186,130,000 |
Diluted | 196,417,000 | 196,176,000 |
Net earnings per share attributable to common stockholders | ||
Basic earnings per share | $ 0.35 | $ 0.21 |
Diluted earnings per share | $ 0.35 | $ 0.21 |
Comprehensive income | ||
Net income (loss) | $ 68,177 | $ 41,374 |
Other comprehensive income | ||
Change in fair value of interest rate swaps | 11,804 | (17,899) |
Realized loss on interest rate swaps | 159 | 522 |
Comprehensive income | 80,140 | 23,997 |
Comprehensive income attributable to non-controlling interests | (3,600) | (1,200) |
Comprehensive income attributable to Broadstone Net Lease, Inc. | $ 76,540 | $ 22,797 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests |
Beginning Balance at Dec. 31, 2022 | $ 3,262,505 | $ 47 | $ 3,419,395 | $ (386,049) | $ 59,525 | $ 169,587 |
Net income | 41,374 | 39,304 | 2,070 | |||
Offering costs, discounts and commissions | 2 | 2 | ||||
Retirement of shares of restricted common stock | 1,175 | 1,175 | ||||
Conversion of OP Units to shares of common stock | 14,897 | (14,897) | ||||
Distributions declared | (54,887) | 52,145 | 2,742 | |||
Change in fair value of interest rate swap agreements | (17,899) | (17,003) | (896) | |||
Realized gain on interest rate swap agreements | 522 | 496 | 26 | |||
Adjustment to non-controlling interests | (460) | 498 | (38) | |||
Stock-based compensation, net of one share of restricted stock forfeited 1 | 1,879 | 1,879 | ||||
Ending Balance at Mar. 31, 2023 | 3,232,317 | 47 | 3,434,534 | (398,890) | 43,516 | 153,110 |
Beginning Balance at Dec. 31, 2023 | 3,194,341 | 47 | 3,440,639 | (440,731) | 49,286 | 145,100 |
Net income | 68,177 | 65,114 | 3,063 | |||
Issuance of shares of common stock | 116 | 116 | ||||
Offering costs, discounts and commissions | 36 | 36 | ||||
Retirement of shares of restricted common stock | 1,040 | 1,040 | ||||
Conversion of OP Units to shares of common stock | 1,536 | (1,536) | ||||
Distributions declared | (57,292) | 54,552 | 2,740 | |||
Change in fair value of interest rate swap agreements | 11,804 | 11,274 | 530 | |||
Realized gain on interest rate swap agreements | 159 | 152 | 7 | |||
Adjustment to non-controlling interests | 4,220 | (3,878) | (342) | |||
Stock-based compensation, net of one share of restricted stock forfeited 1 | 1,475 | 1,475 | ||||
Ending Balance at Mar. 31, 2024 | $ 3,217,704 | $ 47 | $ 3,446,910 | $ (430,169) | $ 56,834 | $ 144,082 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Issuance of shares of common stock, shares | 822,000 | |
Retirement shares of restricted common stock, shares | 71,000 | 66,000 |
Issuance of Share of restricted stock forfeited | 25,000 | 0 |
Common Stock | ||
Issuance of shares of common stock, shares | 259,000 | |
Conversion of OP Units to Common Stock | 95,000 | 896,000 |
Distribution declared per share | $ 0.285 | $ 0.275 |
OP units [Member] | ||
Conversion of OP Units to Common Stock | 95,000 | 896,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities | ||
Net income | $ 68,177 | $ 41,374 |
Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities: | ||
Depreciation and amortization including intangibles associated with investment in rental property | 36,754 | 39,093 |
Provision for impairment of investment in rental properties | 26,400 | 1,473 |
Amortization of debt issuance costs and original issuance discount charged to interest expense | 983 | 960 |
Stock-based compensation expense | 1,475 | 1,879 |
Straight-line rent, direct financing and sales-type lease adjustments | (2,424) | 6,980 |
Gain on sale of real estate | (59,132) | (3,415) |
Other non-cash items | (1,508) | (350) |
Changes in assets and liabilities: | ||
Tenant and other receivables | 704 | (262) |
Prepaid expenses and other assets | 2,841 | (215) |
Accounts payable and other liabilities | (7,078) | 3,418 |
Accrued interest payable | 3,675 | 2,583 |
Net cash provided by operating activities | 70,867 | 74,376 |
Investing activities | ||
Acquisition of rental property | (497) | (5,319) |
Investment in property under development including capitalized interest of $1,241 and $0 in 2024 and 2023, respectively | (38,100) | 0 |
Capital expenditures and improvements | (3,132) | (15,583) |
Proceeds from disposition of rental property, net | 247,064 | 50,410 |
Change in deposits on investments in rental property | (1,050) | (125) |
Net cash provided by investing activities | 204,285 | 29,633 |
Financing activities | ||
Offering costs, discounts, and commissions | (231) | 170 |
Principal payments on mortgages and unsecured term loans | (560) | (736) |
Borrowings on unsecured revolving credit facility | 65,500 | 29,000 |
Repayments on unsecured revolving credit facility | (80,500) | (118,000) |
Cash distributions paid to stockholders | (54,448) | (51,844) |
Cash distributions paid to non-controlling interests | (2,767) | (2,989) |
Net cash used in financing activities | (73,006) | (144,739) |
Net increase (decrease) in cash and cash equivalents and restricted cash | 202,146 | (40,730) |
Cash and cash equivalents and restricted cash at beginning of period | 20,632 | 60,040 |
Cash and cash equivalents and restricted cash at end of period | 222,778 | 19,310 |
Reconciliation of cash and cash equivalents and restricted cash | ||
Cash and cash equivalents at beginning of period | 19,494 | 21,789 |
Restricted cash at beginning of period | 1,138 | 38,251 |
Cash and cash equivalents and restricted cash at beginning of period | 20,632 | 60,040 |
Cash and cash equivalents at end of period | 221,740 | 15,412 |
Restricted cash at end of period | 1,038 | 3,898 |
Cash and cash equivalents and restricted cash at end of period | $ 222,778 | $ 19,310 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Interest Costs Capitalized | $ 1,241 | $ 0 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 65,114 | $ 39,304 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Business Description
Business Description | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description | 1. Business Description Broadstone Net Lease, Inc. (the “Corporation”) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (“REIT”) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the “OP”), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (“UPREIT”). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol “BNL.” The Corporation, the OP, and its consolidated subsidiaries are collectively referred to as the “Company.” The Company is an industrial-focused, diversified net lease REIT that focuses on investing in income-producing, single-tenant net leased commercial properties, primarily in the United States. The Company leases industrial, restaurant, healthcare, retail, and office commercial properties under long-term lease agreements. At March 31, 2024 , the Company owned a diversified portfolio of 759 individual commercial properties with 752 properties located in 44 U.S. states and seven properties located in four Canadian provinces. The following table summarizes the outstanding equity and economic ownership interest of the Company: March 31, 2024 December 31, 2023 (in thousands) Shares of OP Units Total Diluted Shares of OP Units Total Diluted Ownership interest 188,435 8,833 197,268 187,614 8,928 196,542 Percent ownership of OP 95.5 % 4.5 % 100.0 % 95.5 % 4.5 % 100.0 % Refer to Note 14 for further discussion regarding the calculation of weighted average shares outstanding. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Interim Information The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting ) and Article 10 of the Securities and Exchange Commission’s (“SEC”) Regulation S-X. Accordingly, the Company has omitted certain footnote disclosures which would substantially duplicate those contained within the audited consolidated financial statements for the year ended December 31, 2023, included in the Company’s 2023 Annual Report on Form 10-K, filed with the SEC on February 22, 2024. Therefore, the readers of this quarterly report should refer to those audited consolidated financial statements, specifically Note 2, Summary of Significant Accounting Policies , for further discussion of significant accounting policies and estimates. The Company believes all adjustments necessary for a fair presentation have been included in these interim Condensed Consolidated Financial Statements (which include only normal recurring adjustments). Principles of Consolidation The Condensed Consolidated Financial Statements include the accounts and operations of the Company. All intercompany balances and transactions have been eliminated in consolidation. To the extent the Corporation has a variable interest in entities that are not evaluated under the variable interest entity (“VIE”) model, the Corporation evaluates its interests using the voting interest entity model. The Corporation has complete responsibility for the day-to-day management of, authority to make decisions for, and control of the OP. Based on consolidation guidance, the Corporation has concluded that the OP is a VIE as the members in the OP do not possess kick-out rights or substantive participating rights. Accordingly, the Corporation consolidates its interest in the OP. However, because the Corporation holds the majority voting interest in the OP and certain other conditions are met, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs. The portion of the OP not owned by the Corporation is presented as non-controlling interests as of and during the periods presented. Basis of Accounting The Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Accordingly, actual results may differ from those estimates. Investment in Property Under Development Land acquired for development and construction and improvement costs incurred in connection with the development of new properties are capitalized and recorded as Property under development in the accompanying Condensed Consolidated Balance Sheets until construction has been completed. Such capitalized costs include all direct and indirect costs related to planning, development, and construction, including interest, real estate taxes, and other miscellaneous costs incurred during the construction period. Once completed, the property under development is placed in service and depreciation commences. For the three months ended March 31, 2024 and 2023, the Company invested $ 36.9 million and $ 0.0 million, respectively, in properties under development, excluding capitalized costs. At March 31, 2024 and December 31, 2023, the Company had $ 133.1 million and $ 95.0 million, respectively, classified as Property under development in the Condensed Consolidated Balance Sheets, inclusive of $ 2.7 million and $ 1.5 million of capitalized interest, respectively. Long-lived Asset Impairment The Company reviews long-lived assets to be held and used for possible impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If, and when, such events or changes in circumstances are present, an impairment exists to the extent the carrying value of the long-lived asset or asset group exceeds the sum of the undiscounted cash flows expected to result from the use of the long-lived asset or asset group and its eventual disposition. Such cash flows include expected future operating income, as adjusted for trends and prospects, as well as the effects of demand, competition, and other factors. An impairment loss is measured as the amount by which the carrying amount of the long-lived asset or asset group exceeds its fair value. Significant judgment is made to determine if and when impairment should be taken. The Company’s assessment of impairment as of March 31, 2024 and 2023 was based on the most current information available to the Company. Certain of the Company’s properties may have fair values less than their carrying amounts. However, based on the Company’ s plans with respect to each of those properties, the Company believes that their carrying amounts are recoverable and therefore, no impairment charges were recognized other than those described below. If the operating conditions mentioned above deteriorate or if the Company ’s expected holding period for assets changes, subsequent tests for impairments could result in additional impairment charges in the future. Inputs used in establishing fair value for impaired real estate assets generally fall within Level 3 of the fair value hierarchy, which are characterized as requiring significant judgment as little or no current market activity may be available for validation. The main indicator used to establish the classification of the inputs is current market conditions, as derived through the use of published commercial real estate market information and information obtained from brokers and other third party sources. The Company determines the valuation of impaired assets using generally accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations, and bona fide purchase offers received from third parties. Management may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate. The following table summarizes the Company ’s impairment charges: For the Three Months Ended (in thousands, except number of properties) 2024 2023 Number of properties 12 1 Impairment charge $ 26,400 $ 1,473 During the three months ended March 31, 2024, the Company recognized impairment of $ 26.4 million, resulting from changes in the Company’s long-term hold strategy with respect to the individual properties. The impairments were based on actual and expected sales prices of the individual properties and include a $ 15.2 million impairment charge on a healthcare property and an $ 11.2 million impairment charge on 11 healthcare properties sold as part of a portfolio with a gain of $ 59.1 million, excluding any impairment. Restricted Cash Restricted cash generally includes escrow funds the Company maintains pursuant to the terms of certain mortgages, lease agreements, and undistributed proceeds from the sale of properties under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”), and is reported within Prepaid expenses and other assets in the Condensed Consolidated Balance Sheets. Restricted cash consisted of the following: March 31, December 31, (in thousands) 2024 2023 Escrow funds and other $ 1,038 $ 1,138 1031 exchange proceeds — — $ 1,038 $ 1,138 Rent Received in Advance Rent received in advance represents tenant rent payments received prior to the contractual due date, and is included in Accounts payable and other liabilities in the Condensed Consolidated Balance Sheets. Rent received in advance consisted of the following: (in thousands) March 31, December 31, Rent received in advance $ 15,200 $ 14,776 Fair Value Measurements Recurring Fair Value Measurements The balances of financial instruments measured at fair value on a recurring basis are as follows (see Note 9): March 31, 2024 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 57,900 $ — $ 57,900 $ — December 31, 2023 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 46,096 $ — $ 46,096 $ — Long-term Debt – The fair value of the Company’s debt was estimated using Level 1, Level 2, and Level 3 inputs based on recent secondary market trades of the Company’s 2031 Senior Unsecured Public Notes (see Note 7), recent comparable financing transactions, recent market risk premiums for loans of comparable quality, applicable Secured Overnight Financing Rate (“SOFR”), Canadian Dollar Offered Rate (“CDOR”), U.S. Treasury obligation interest rates, and discounted estimated future cash payments to be made on such debt. The discount rates estimated reflect the Company’s judgment as to the approximate current lending rates for loans or groups of loans with similar maturities and assumes that the debt is outstanding through maturity. Market information, as available, or present value techniques were utilized to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist on specific loans, it is unlikely that the estimated fair value of any such debt could be realized by immediate settlement of the obligation. The following table summarizes the carrying amount reported in the Condensed Consolidated Balance Sheets and the Company ’s estimate of the fair value of the unsecured revolving credit facility, mortgages, unsecured term loans, and senior unsecured notes which reflects the fair value of interest rate swaps: (in thousands) March 31, December 31, Carrying amount $ 1,902,432 $ 1,919,607 Fair value 1,741,050 1,761,177 Non-recurring Fair Value Measurements The Company’s non-recurring fair value measurements at March 31, 2024 and December 31, 2023 consisted of the fair value of impaired real estate assets that were determined using Level 3 inputs. Right-of-Use Assets and Lease Liabilities The Company is a lessee under non-cancelable operating leases associated with its corporate headquarters and other office spaces as well as with leases of land (“ground leases”). The Company records right-of-use assets and lease liabilities associated with these leases. The lease liability is equal to the net present value of the future payments to be made under the lease, discounted using estimates based on observable market factors. The right-of-use asset is generally equal to the lease liability plus initial direct costs associated with the leases. The Company includes in the recognition of the right-of-use asset and lease liability those renewal periods that are reasonably certain to be exercised, based on the facts and circumstances that exist at lease inception. Amounts associated with percentage rent provisions are considered variable lease costs and are not included in the initial measurement of the right-of-use asset or lease liability. The Company has made an accounting policy election, applicable to all asset types, not to separate lease from nonlease components when allocating contract consideration related to operating leases. Right-of-use assets and lease liabilities associated with operating leases were included in the accompanying Condensed Consolidated Balance Sheets as follows: March 31, December 31, (in thousands) Financial Statement Presentation 2024 2023 Righ t-of-use assets Prepaid expenses and other assets $ 7,528 $ 8,476 Lease liabilities Accounts payable and other liabilities 7,905 8,256 The Company’s right-of-use assets and lease liabilities primarily consist of a ten year lease for the Company’s corporate office space. The lease contains two five-year extension options, exercisable at the Company’s discretion, that are not reasonably certain to be exercised, and are therefore excluded from our calculation of the lease liability. |
Acquisitions of Rental Property
Acquisitions of Rental Property | 3 Months Ended |
Mar. 31, 2024 | |
Business Combinations [Abstract] | |
Acquisitions of Rental Property | 3. Acquisitions of Rental Property The Company did not close on any acquisitions during the three months ended March 31, 2024. The Company closed on the following acquisitions during the three months ended March 31, 2023: (in thousands, except number of properties) Number of Real Estate Date Property Type Properties Acquisition Price March 14, 2023 Retail 1 $ 5,221 (a) (a) Acquisition price excludes capitalized acquisition costs of $ 0.1 million. The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the purchase price allocation for completed real estate acquisitions: For the Three Months Ended (in thousands) 2024 2023 Land $ — $ 781 Land improvements — 360 Buildings and improvements — 3,890 Acquired in-place leases (b) — 501 Acquired below-market leases (c) — ( 166 ) $ — $ 5,366 (b) The weighted average amortization period for acquired in-place leases is 20 years for acquisitions completed during the three months ended March 31, 2023. There were no acquisitions during the three month ended March 31, 2024. (c) The weighted average amortization period for acquired below-market leases is 20 years for acquisitions completed during the three months ended March 31, 2023. There were no acquisitions during the three month ended March 31, 2024. The above acquisition was funded using a combination of available cash on hand and unsecured revolving credit facility borrowings and qualified as an asset acquisition. As such, acquisition costs were capitalized. |
Sale of Real Estate
Sale of Real Estate | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
Sale of Real Estate | 4. Sale of Real Estate The Company closed on the following sales of real estate, none of which qualified as discontinued operations: For the Three Months Ended (in thousands, except number of properties) 2024 2023 Number of properties disposed 37 3 Aggregate sale price $ 251,752 $ 51,874 Aggregate carrying value ( 189,373 ) ( 46,995 ) Additional sales expenses ( 3,247 ) ( 1,464 ) Gain on sale of real estate $ 59,132 $ 3,415 |
Investment in Rental Property a
Investment in Rental Property and Lease Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Investment in Rental Property and Lease Arrangements | 5. Investment in Rental Property and Lease Arrangements The Company generally leases its investment rental property to established tenants in the industrial, restaurant, healthcare, retail, and office property types. At March 31, 2024 , the Company had 759 real estate properties, 746 of which were leased under leases that have been classified as operating leases , nine that have been classified as direct financing leases, one that has been classified as a sales-type lease, and three that were vacant. Of the nine leases classified as direct financing leases , three include land portions which are accounted for as operating leases. The sales-type lease includes a land portion which is accounted for as an operating lease. Most leases have initial terms of 10 to 20 years. The Company ’s leases generally provide for limited increases in rent as a result of fixed increases, increases in the Consumer Price Index (“CPI”), or increases in the tenant’s sales volume. Generally, tenants are also required to pay all property taxes and assessments, substantially maintain the interior and exterior of the building, and maintain property and liability insurance coverage. The leases also typically provide for one or more multiple-year renewal options, at the election of the tenant, and are subject to generally the same terms and conditions as the initial lease. Investment in Rental Property – Accounted for Using the Operating Method Depreciation expense on investment in rental property was as follows: For the Three Months Ended (in thousands) 2024 2023 Depreciation $ 29,994 $ 31,157 Estimated lease payments to be received under non-cancelable operating leases with tenants at March 31, 2024 are as follows: (in thousands) Remainder of 2024 $ 280,799 2025 387,464 2026 385,811 2027 370,847 2028 355,398 Thereafter 2,964,754 $ 4,745,073 Since lease renewal periods are exercisable at the option of the tenant, the above amounts only include future lease payments due during the initial lease terms. Such amounts exclude any potential variable rent increases that are based on changes in the CPI or future variable rents which may be received under the leases based on a percentage of the tenant’s gross sales. Additionally, certain of our leases provide tenants with the option to terminate their leases in exchange for termination penalties, or that are contingent upon the occurrence of a future event. Future lease payments within the table above have not been adjusted for these termination rights. Investment in Rental Property – Direct Financing Leases The Company ’s net investment in direct financing leases was comprised of the following: (in thousands) March 31, December 31, Undiscounted estimated lease payments to be received $ 34,362 $ 35,155 Estimated unguaranteed residual values 14,547 14,547 Unearned revenue ( 22,272 ) ( 22,944 ) Reserve for credit losses ( 115 ) ( 115 ) Net investment in direct financing leases $ 26,522 $ 26,643 Undiscounted estimated lease payments to be received under non-cancelable direct financing leases with tenants at March 31, 2024 are as follows: (in thousands) Remainder of 2024 $ 2,379 2025 3,285 2026 3,357 2027 3,426 2028 3,496 Thereafter 18,419 $ 34,362 The above rental receipts do not include future lease payments for renewal periods, potential variable CPI rent increases, or variable percentage rent payments that may become due in future periods. The following table summarizes amounts reported as Lease revenues, net in the Condensed Consolidated Statements of Income and Comprehensive Income: For the Three Months Ended (in thousands) 2024 2023 Contractual rental amounts billed for operating leases $ 97,549 $ 98,102 Adjustment to recognize contractual operating lease billings on a 5,104 7,370 Net write-offs of accrued rental income ( 2,556 ) ( 105 ) Variable rental amounts earned 598 341 Earned income from direct financing leases 682 691 Interest income from sales-type leases 14 14 Operating expenses billed to tenants 5,105 5,075 Other income from real estate transactions (a) 66 7,392 Adjustment to revenue recognized for uncollectible rental ( 1,196 ) 112 Total lease revenues, net $ 105,366 $ 118,992 (a) The three months ended March 31, 2023, includes $ 7.5 million of lease termination fee income recognized in connection with the simultaneous lease termination and sale of an underlying office property for an additional $ 32.0 million in proceeds. |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities, and Leasing Fees | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Liabilities, and Leasing Fees | 6. Intangible Assets and Liabilities, and Leasing Fees The following is a summary of intangible assets and liabilities, and leasing fees, and related accumulated amortization: (in thousands) March 31, December 31, Lease intangibles: Acquired above-market leases $ 42,636 $ 44,711 Less accumulated amortization ( 19,635 ) ( 20,312 ) Acquired above-market leases, net 23,001 24,399 Acquired in-place leases 400,956 416,206 Less accumulated amortization ( 150,707 ) ( 152,379 ) Acquired in-place leases, net 250,249 263,827 Total intangible lease assets, net $ 273,250 $ 288,226 Acquired below-market leases $ 96,245 $ 98,535 Less accumulated amortization ( 45,292 ) ( 45,004 ) Intangible lease liabilities, net $ 50,953 $ 53,531 Leasing fees $ 17,520 $ 18,117 Less accumulated amortization ( 6,174 ) ( 6,426 ) Leasing fees, net $ 11,346 $ 11,691 Amortization of intangible lease assets and liabilities, and leasing fees was as follows: (in thousands) For the Three Months Ended Intangible Financial Statement Presentation 2024 2023 Acquired in-place leases and leasing fees Depreciation and amortization $ 7,696 $ 10,588 Above-market and below-market leases Lease revenues, net 1,021 2,694 There was no accelerated amortization for the three months ended March 31, 2024. For the three months ended March 31, 2023, amortization expense includes $ 0.9 million of accelerated amortization, resulting from early lease terminations. Estimated future amortization of intangible assets and liabilities, and leasing fees at March 31, 2024 is as follows: (in thousands) Remainder of 2024 $ 18,640 2025 24,201 2026 23,246 2027 21,677 2028 19,853 Thereafter 126,026 $ 233,643 |
Unsecured Credit Agreements
Unsecured Credit Agreements | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Unsecured Credit Agreements | 7. Unsecured Credit Agreements The following table summarizes the Company ’s unsecured credit agreements: Outstanding Balance (in thousands, except interest rates) March 31, December 31, Interest Rate Maturity Date Unsecured revolving credit facility $ 73,820 $ 90,434 Applicable reference rate + 0.85 % (a) Mar. 2026 (c) Unsecured term loans: 2026 Unsecured Term Loan 400,000 400,000 one-month adjusted SOFR + 1.00 % (b) Feb. 2026 2027 Unsecured Term Loan 200,000 200,000 one-month adjusted SOFR + 0.95 % (b) Aug. 2027 2029 Unsecured Term Loan 300,000 300,000 one-month adjusted SOFR + 1.25 % (b) Aug. 2029 Total unsecured term loans 900,000 900,000 Unamortized debt issuance costs, net ( 3,740 ) ( 4,053 ) Total unsecured term loans, net 896,260 895,947 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 ( 4,502 ) ( 4,691 ) Total senior unsecured notes, net 845,498 845,309 Total unsecured debt, net $ 1,815,578 $ 1,831,690 (a) At March 31, 2024 and December 31, 2023 , a balance of $ 0.0 million and $ 15.0 million was subject to the one-month SOFR of 5.33 % and 5.35 %, respectively. The remaining balance of $ 100 million Canadian Dollar (”CAD”) borrowings remeasured to $ 73.8 million United States Dollar (”USD”) and $ 75.4 million USD, at March 31, 2024 and December 31, 2023, respectively, and was subject to the one-month CDOR of 5.29 % and 5.46 %, respectively. (b) At March 31, 2024 and December 31, 2023 , one-month SOFR was 5.33 % and 5.35 %, respectively. (c) The Company’s unsecured revolving credit facility contains two six-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.0625 % of the revolving commitments. At March 31, 2024 , the weighted average interest rate on all outstanding borrowings was 5.30 % exclusive of interest rate swap agreements. At March 31, 2024 , the weighted average interest rate on all outstanding borrowings was 3.71 % inclusive of interest rate swap agreements. The Company is subject to various financial and operational covenants and financial reporting requirements pursuant to its unsecured credit agreements. These covenants require the Company to maintain certain financial ratios. As of March 31, 2024, and for all periods presented, the Company believes it was in compliance with all of its loan covenants. Failure to comply with the covenants would result in a default which, if the Company were unable to cure or obtain a waiver from the lenders, could accelerate the repayment of the obligations. Further, in the event of default, the Company may be restricted from paying dividends to its stockholders in excess of dividends required to maintain its REIT qualification. Accordingly, an event of default could have a material effect on the Company. Debt issuance costs and original issuance discounts are amortized as a component of Interest expense in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. The following table summarizes debt issuance cost and original issuance discount amortization: For the Three Months Ended (in thousands) 2024 2023 Debt issuance costs and original issuance discount amortization $ 983 $ 986 |
Mortgages
Mortgages | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Mortgages | 8. Mortgages The Company ’s mortgages consist of the following: Origination Maturity (in thousands, except interest rates) Date Date Interest March 31, December 31, Lender (Month/Year) (Month/Year) Rate 2024 2023 Wilmington Trust National Association Apr-19 Feb-28 4.92 % $ 43,868 $ 44,207 (a) (b) (c) (d) Wilmington Trust National Association Jun-18 Aug-25 4.36 % 18,615 18,725 (a) (b) (c) (d) PNC Bank Oct-16 Nov-26 3.62 % 16,129 16,241 (b) (c) Total mortgages 78,612 79,173 Debt issuance costs, net ( 95 ) ( 105 ) Mortgages, net $ 78,517 $ 79,068 (a) Non-recourse debt includes the indemnification/guaranty of the Company pertaining to fraud, environmental claims, insolvency, and other matters. (b) Debt secured by related rental property and lease rents. (c) Debt secured by guaranty of the OP. (d) Mortgage was assumed as part of the acquisition of the related property. The debt was recorded at fair value at the time of assumption. At March 31, 2024 , investment in rental property of $ 119.8 million was pledged as collateral against the Company ’s mortgages. Estimated future principal payments to be made under the above mortgages and the Company ’s unsecured credit agreements (see Note 7) at March 31, 2024 are as follows: (in thousands) Remainder of 2024 $ 1,700 2025 20,195 2026 490,663 2027 351,596 2028 263,278 Thereafter 775,000 $ 1,902,432 Certain of the Company’ s mortgages provide for prepayment fees and can be terminated under certain events of default as defined under the related agreements. These prepayment fees are not reflected as part of the table above. |
Interest Rate Swaps
Interest Rate Swaps | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swaps | 9. Interest Rate Swaps The following is a summary of the Company ’s outstanding interest rate swap agreements: (in thousands, except interest rates) March 31, 2024 December 31, 2023 Counterparty Maturity Date Fixed Variable Rate Index Notional Fair Notional Fair Wells Fargo Bank, N.A. October 2024 2.72 % daily compounded SOFR $ 15,000 $ 194 $ 15,000 $ 255 Capital One, National Association December 2024 1.58 % daily compounded SOFR 15,000 363 15,000 445 Bank of Montreal January 2025 1.91 % daily compounded SOFR 25,000 612 25,000 713 Truist Financial Corporation April 2025 2.20 % daily compounded SOFR 25,000 701 25,000 734 Bank of Montreal July 2025 2.32 % daily compounded SOFR 25,000 793 25,000 768 Truist Financial Corporation July 2025 1.99 % daily compounded SOFR 25,000 894 25,000 888 Truist Financial Corporation December 2025 2.30 % daily compounded SOFR 25,000 1,007 25,000 887 Bank of Montreal January 2026 1.92 % daily compounded SOFR 25,000 1,171 25,000 1,071 Bank of Montreal January 2026 2.05 % daily compounded SOFR 40,000 1,787 40,000 1,615 Capital One, National Association January 2026 2.08 % daily compounded SOFR 35,000 1,547 35,000 1,389 Truist Financial Corporation January 2026 1.93 % daily compounded SOFR 25,000 1,168 25,000 1,067 Capital One, National Association April 2026 2.68 % daily compounded SOFR 15,000 554 15,000 439 Capital One, National Association July 2026 1.32 % daily compounded SOFR 35,000 2,396 35,000 2,186 Bank of Montreal December 2026 2.33 % daily compounded SOFR 10,000 528 10,000 423 Bank of Montreal December 2026 1.99 % daily compounded SOFR 25,000 1,540 25,000 1,299 Toronto-Dominion Bank March 2027 2.46 % one-month CDOR 14,764 (a) 694 15,087 (a) 572 Wells Fargo Bank, N.A. April 2027 2.72 % daily compounded SOFR 25,000 1,118 25,000 806 Bank of Montreal December 2027 2.37 % daily compounded SOFR 25,000 1,568 25,000 1,215 Capital One, National Association December 2027 2.37 % daily compounded SOFR 25,000 1,563 25,000 1,197 Wells Fargo Bank, N.A. January 2028 2.37 % daily compounded SOFR 75,000 4,697 75,000 3,632 Bank of Montreal May 2029 2.09 % daily compounded SOFR 25,000 2,254 25,000 1,835 Regions Bank May 2029 2.11 % daily compounded SOFR 25,000 2,223 25,000 1,801 Regions Bank June 2029 2.03 % daily compounded SOFR 25,000 2,319 25,000 1,900 U.S. Bank National Association June 2029 2.03 % daily compounded SOFR 25,000 2,324 25,000 1,908 Regions Bank August 2029 2.58 % one-month SOFR 100,000 6,265 100,000 4,392 Toronto-Dominion Bank August 2029 2.58 % one-month SOFR 45,000 2,860 45,000 2,021 U.S. Bank National Association August 2029 2.65 % one-month SOFR 15,000 900 15,000 618 U.S. Bank National Association August 2029 2.58 % one-month SOFR 100,000 6,294 100,000 4,427 U.S. Bank National Association August 2029 1.35 % daily compounded SOFR 25,000 3,211 25,000 2,828 Regions Bank March 2032 2.69 % one-month CDOR 14,764 (a) 1,043 15,087 (a) 677 U.S. Bank National Association March 2032 2.70 % one-month CDOR 14,764 (a) 1,043 15,087 (a) 678 Bank of Montreal March 2034 2.81 % one-month CDOR 29,528 (b) 2,269 30,174 (b) 1,410 $ 973,820 $ 57,900 $ 975,435 $ 46,096 (a) The contractual notional amount is $ 20.0 million CAD . (b) The contractual notional amount is $ 40.0 million CAD . At March 31, 2024 , the weighted average fixed rate on all outstanding interest rate swaps was 2.28 %. At March 31, 2024 , the weighted average interest rate on all outstanding borrowings was 3.71 % inclusive of unsecured credit agreements. The total amounts recognized, and the location in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income, from converting from variable rates to fixed rates under these agreements were as follows: Amount of Gain (Loss) Reclassification from Total Interest Expense Recognized in Accumulated Other Presented in the Condensed Accumulated Other Comprehensive Income Consolidated Statements of (in thousands) Comprehensive Amount of Income and Comprehensive For the Three Months Ended March 31, Income Location Gain Income 2024 $ 11,804 Interest expense $ 7,548 $ 18,578 2023 ( 17,899 ) Interest expense 4,997 21,139 Amounts related to the interest rate swaps expected to be reclassified out of Accumulated other comprehensive income to Interest expense during the next twelve months are estimated to be a gain of $ 25.6 million. |
Non-Controlling Interests
Non-Controlling Interests | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests | 10. Non-Controlling Interests The following table summarizes OP Units exchanged for shares of common stock: For the Three Months Ended (in thousands) 2024 2023 OP Units exchanged for shares of common stock 95 896 Value of units exchanged $ 1,536 $ 14,897 |
Credit Risk Concentrations
Credit Risk Concentrations | 3 Months Ended |
Mar. 31, 2024 | |
Risks and Uncertainties [Abstract] | |
Credit Risk Concentrations | 11. Credit Risk Concentrations The Company maintained bank balances that, at times, exceeded the federally insured limit during the three months ended March 31, 2024. The Company has not experienced losses relating to these deposits and management does not believe that the Company is exposed to any significant credit risk with respect to these amounts based on the financial position and capitalization of the banks. For the three months ended March 31, 2024 and 2023 , the Company had no individual tenants or common franchises that accounted for more than 10 % of Lease revenues, net, excluding lease termination fees. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity | 12. Equity At-the-Market Program The Company has an at-the-market common equity offering program (“ATM Program”), through which it may, from time to time, publicly offer and sell shares of common stock having an aggregate gross sales price of up to $ 400.0 million through June 2024. The ATM Program provides for forward sale agreements, enabling the Company to set the price of shares upon pricing the offering, while delaying the issuance of shares and the receipt of the net proceeds. As of March 31, 2024 , the Company has $ 145.4 million of available capacity under the ATM Program. During the three months ended March 31, 2024 and 2023, no shares were issued under the ATM Program. Share Repurchase Program The Company has a stock repurchase program (the “Repurchase Program”), which authorizes the Company to repurchase up to $ 150.0 million of the Company’s common stock. On March 12, 2024, the Company’s Board of Directors re-authorized the Repurchase Program for a 12-month period beginning on March 14, 2024. Under the Repurchase Program, purchases of the Company’s stock can be made in the open market or through private transactions from time to time over the 12-month period, depending on prevailing market conditions and applicable legal and regulatory requirements. The timing, manner, price, and amount of any repurchases of common stock under the Repurchase Program will be determined at the Company’s discretion, using available cash resources. During the three months ended March 31, 2024 and 2023, no shares of the Company’s common stock were repurchased under the Repurchase Program. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 13. Stock-Based Compensation Restricted Stock Awards During the three months ended March 31, 2024 and 2023 , the Company awarded 777,943 and 259,099 shares of restricted stock awards (“RSAs”), respectively, to officers, employees and non-employee directors under the Company's equity incentive plan. The holder of RSAs is generally entitled at all times on and after the date of issuance of the restricted common shares to exercise the rights of a stockholder of the Company, including the right to vote the shares and the right to receive dividends on the shares. The RSAs vest over a one -, three -, four -, or five-year period from the date of the grant and are subject to the holder ’s continued service through the applicable vesting dates and in accordance with the terms of the individual award agreements. The weighted average value of awards granted during the three months ended March 31, 2024 and 2023 , were $ 14.74 and $ 17.75 , respectively, which were based on the market price per share of the Company ’s common stock on the grant dates. The following table presents information about the Company ’s RSAs: For the Three Months Ended (in thousands) 2024 2023 Compensation cost $ 1,043 $ 1,728 Dividends declared on unvested RSAs 295 136 Fair value of shares vested during the period 3,207 2,864 As of March 31, 2024 , there was $ 15.0 million of unrecognized compensation costs related to the unvested restricted shares, which is expected to be recognized over a weighted average period of 3.9 years. The following table presents information about the Company ’s restricted stock activity: For the Three Months Ended March 31, 2024 2023 (in thousands, except per share amounts) Number of Shares Weighted Average Number of Shares Weighted Average Unvested at beginning of period 492 $ 18.63 396 $ 20.36 Granted 778 14.74 259 17.75 Vested ( 209 ) 19.26 ( 160 ) 20.36 Forfeited ( 25 ) 19.02 — — Unvested at end of period 1,036 15.57 495 19.00 Performance-based Restricted Stock Units During the three months ended March 31, 2024 and 2023 , the Company issued target grants of 202,308 and 186,481 of performance-based restricted stock units (“PRSUs”), respectively, under the Company's equity incentive plan to the officers of the Company. The awards are non-vested restricted stock units where the vesting percentages and the ultimate number of units vesting will be measured 50 % based on the relative total shareholder return (“rTSR”) of the Company ’ s common stock as compared to the rTSR of peer companies, as identified in the grant agreements, over a three-year period, and 50 % based on the rTSR of the Company ’ s common stock as compared to the rTSR of the MSCI US REIT Index over a three year measurement period. Vesting percentages range from 0 % to 200 % with a target of 100 %. rTSR means the percentage appreciation in the fair market value of one share over the three-year measurement period beginning on the date of grant, assuming the reinvestment of dividends on the ex-dividend date. The target number of units is based on achieving a rTSR equal to the 55 th percentile of the peer companies and MSCI US REIT Index. For PRSUs issued during the three months ended March 31, 2024 that achieve a percentile rank of at least the 55 th percentile, and the absolute rTSR of the Company is negative for the performance period, the awards will be reduced by 25 %, not to result in a reduction less than target. Dividends accrue during the measurement period and will be paid on the PRSUs ultimately earned at the end of the measurement period in either cash or common stock, at the discretion of the Compensation Committee of the Board of Directors. The grant date fair value of the PRSUs was measured using a Monte Carlo simulation model based on assumptions including share price volatility. The following table presents compensation cost recognized on the Company ’s performance-based restricted stock units: For the Three Months Ended (in thousands) 2024 2023 Compensation cost $ 432 $ 151 As of March 31, 2024 , there was $ 6.1 million of unrecognized compensation costs related to the unvested PRSUs, which is expected to be recognized over a weighted average period of 2.3 years. The following table presents information about the Company ’s performance-based restricted stock unit activity: For the Three Months Ended March 31, 2024 2023 (in thousands, except per share amounts) Number of Shares Weighted Average Number of Shares Weighted Average Unvested at beginning of period 351 $ 24.90 233 $ 26.27 Granted 202 15.84 186 23.78 Vested ( 88 ) 24.40 — — Forfeited ( 19 ) 25.09 ( 61 ) 26.80 Unvested at end of period 446 20.89 358 25.01 |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 14. Earnings per Share The following table summarizes the components used in the calculation of basic and diluted earnings per share (“EPS”): For the Three Months Ended (in thousands, except per share amounts) 2024 2023 Basic earnings: Net earnings attributable to Broadstone Net Lease, Inc. common $ 65,114 $ 39,304 Less: earnings allocated to unvested restricted shares ( 358 ) ( 136 ) Net earnings used to compute basic earnings per common share $ 64,756 $ 39,168 Diluted earnings: Net earnings used to compute basic earnings per common share $ 64,756 $ 39,168 Add: net earnings attributable to non-controlling interests 3,063 2,070 Add: undistributed earnings allocated to unvested restricted shares 63 — Less: undistributed earnings reallocated to unvested restricted shares ( 60 ) — Net earnings used to compute diluted earnings per common share $ 67,822 $ 41,238 Weighted average number of common shares outstanding 187,953 186,561 Less: weighted average unvested restricted shares (a) ( 663 ) ( 431 ) Weighted average number of common shares outstanding used in 187,290 186,130 Add: effects of restricted stock units (b) 285 220 Add: effects of convertible membership units (c) 8,842 9,826 Weighted average number of common shares outstanding used in 196,417 196,176 Basic earnings per share $ 0.35 $ 0.21 Diluted earnings per share $ 0.35 $ 0.21 (a) Represents the weighted average effects of 1,035,194 and 494,845 unvested restricted shares of common stock as of March 31, 2024 and 2023, respectively, which will be excluded from the computation of earnings per share until they vest. (b) Represents the weighted average effects of shares of common stock to be issued as though the end of the period were the end of the performance period (see Note 13). (c) Represents the weighted average effects of 8,833,236 and 9,308,457 OP Units outstanding at March 31, 2024 and 2023 , respectively. |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosures | 3 Months Ended |
Mar. 31, 2024 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Disclosures | 15. Supplemental Cash Flow Disclosures Cash paid for interest was $ 15.0 million and $ 17.1 million for the three months ended March 31, 2024 and 2023 , respectively. Cash paid for income taxes was $ 0.02 million and $ 0.4 million for the three months ended March 31, 2024 and 2023, respectively. The following are non-cash transactions and have been excluded from the accompanying Condensed Consolidated Statements of Cash Flows: • During the three months ended March 31, 2024 , the Company converted 94,500 OP Units valued at $ 1.5 million to 94,500 shares of common stock at the election of the holder. During the three months ended March 31, 2023 , the Company converted 896,349 OP Units valued at $ 14.9 million to 896,349 shares of common stock at the election of the holder. • At March 31, 2024 and 2023 , dividend amounts declared and accrued but not yet paid amounted to $ 56.9 million and $ 54.5 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies Litigation From time to time, the Company is a party to various litigation matters incidental to the conduct of the Company’s business. While the resolution of such matters cannot be predicted with certainty, based on currently available information, the Company does not believe that the final outcome of any of these matters will have a material effect on its consolidated financial position, results of operations, or liquidity. Property and Acquisition Related In connection with ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company is not aware of any non-compliance, liability, claim, or other environmental condition that would have a material effect on its consolidated financial position, results of operations, or liquidity. As of March 31, 2024, the Company has a commitment to fund one build-to-suit transaction with a remaining obligation of $ 74.1 million expected to fund in multiple draws through October 2024, using a combination of available cash on hand and unsecured revolving credit facility borrowings. Rent is contractually scheduled to commence at the earlier of construction completion or October 15, 2024. The Company is a party to two separate tax protection agreements with the contributing members of two distinct UPREIT transactions and a third tax protection agreement entered into in connection with the Company’s internalization. The tax protection agreements require the Company to indemnify the beneficiaries in the event of a sale, exchange, transfer, or other disposal of the contributed property, and in the case of the tax protection agreement entered into in connection with the Company’s internalization, the entire Company, in a taxable transaction that would cause such beneficiaries to recognize a gain that is protected under the agreements, subject to certain exceptions. The Company is required to allocate an amount of nonrecourse liabilities to each beneficiary that is at least equal to the minimum liability amount, as contained in the agreements. The minimum liability amount and the associated allocation of nonrecourse liabilities are calculated in accordance with applicable tax regulations, are completed at the OP level, and are not probable. Therefore, there is no impact to the Condensed Consolidated Financial Statements. Based on values as of March 31, 2024 , taxable sales of the applicable properties would trigger liability under the agreements of approximately $ 20.4 million. Based on information available, the Company does not believe that the events resulting in damages as detailed above have occurred or are likely to occur in the foreseeable future. In the normal course of business, the Company enters into various types of commitments to purchase real estate properties. These commitments are generally subject to the Company’ s customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated to purchase the properties. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events On April 15, 2024, the Company paid distributions totaling $ 56.2 million. On April 25, 2024, the Board of Directors declared a quarterly distribution of $ 0.29 per share on the Company ’ s common stock and OP Units for the second quarter of 2024, which will be payable on or before July 15, 2024 to stockholders and OP unitholders of record as of June 28, 2024 . Subsequent to March 31, 2024, the Company continued to expand its operations through the acquisition of approximately $149 .5 million of additional rental property and associated intangible assets and liabilities. Subsequent to March 31, 2024, the Company sold two properties with an aggregate carrying value of approximately $ 18.4 million for total proceeds of $ 22.3 million. The Company incurred additional expenses related to the sales of approximately $ 0.4 million, resulting in a gain on sale of real estate of approximately $ 3.5 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Interim Information | Interim Information The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting ) and Article 10 of the Securities and Exchange Commission’s (“SEC”) Regulation S-X. Accordingly, the Company has omitted certain footnote disclosures which would substantially duplicate those contained within the audited consolidated financial statements for the year ended December 31, 2023, included in the Company’s 2023 Annual Report on Form 10-K, filed with the SEC on February 22, 2024. Therefore, the readers of this quarterly report should refer to those audited consolidated financial statements, specifically Note 2, Summary of Significant Accounting Policies , for further discussion of significant accounting policies and estimates. The Company believes all adjustments necessary for a fair presentation have been included in these interim Condensed Consolidated Financial Statements (which include only normal recurring adjustments). |
Principles of Consolidation | Principles of Consolidation The Condensed Consolidated Financial Statements include the accounts and operations of the Company. All intercompany balances and transactions have been eliminated in consolidation. To the extent the Corporation has a variable interest in entities that are not evaluated under the variable interest entity (“VIE”) model, the Corporation evaluates its interests using the voting interest entity model. The Corporation has complete responsibility for the day-to-day management of, authority to make decisions for, and control of the OP. Based on consolidation guidance, the Corporation has concluded that the OP is a VIE as the members in the OP do not possess kick-out rights or substantive participating rights. Accordingly, the Corporation consolidates its interest in the OP. However, because the Corporation holds the majority voting interest in the OP and certain other conditions are met, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs. The portion of the OP not owned by the Corporation is presented as non-controlling interests as of and during the periods presented. |
Basis of Accounting | Basis of Accounting The Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. |
Use of Estimates | Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Accordingly, actual results may differ from those estimates. |
Investment in Property Under Development Text Block | Investment in Property Under Development Land acquired for development and construction and improvement costs incurred in connection with the development of new properties are capitalized and recorded as Property under development in the accompanying Condensed Consolidated Balance Sheets until construction has been completed. Such capitalized costs include all direct and indirect costs related to planning, development, and construction, including interest, real estate taxes, and other miscellaneous costs incurred during the construction period. Once completed, the property under development is placed in service and depreciation commences. For the three months ended March 31, 2024 and 2023, the Company invested $ 36.9 million and $ 0.0 million, respectively, in properties under development, excluding capitalized costs. At March 31, 2024 and December 31, 2023, the Company had $ 133.1 million and $ 95.0 million, respectively, classified as Property under development in the Condensed Consolidated Balance Sheets, inclusive of $ 2.7 million and $ 1.5 million of capitalized interest, respectively. |
Long-lived Asset Impairment | Long-lived Asset Impairment The Company reviews long-lived assets to be held and used for possible impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If, and when, such events or changes in circumstances are present, an impairment exists to the extent the carrying value of the long-lived asset or asset group exceeds the sum of the undiscounted cash flows expected to result from the use of the long-lived asset or asset group and its eventual disposition. Such cash flows include expected future operating income, as adjusted for trends and prospects, as well as the effects of demand, competition, and other factors. An impairment loss is measured as the amount by which the carrying amount of the long-lived asset or asset group exceeds its fair value. Significant judgment is made to determine if and when impairment should be taken. The Company’s assessment of impairment as of March 31, 2024 and 2023 was based on the most current information available to the Company. Certain of the Company’s properties may have fair values less than their carrying amounts. However, based on the Company’ s plans with respect to each of those properties, the Company believes that their carrying amounts are recoverable and therefore, no impairment charges were recognized other than those described below. If the operating conditions mentioned above deteriorate or if the Company ’s expected holding period for assets changes, subsequent tests for impairments could result in additional impairment charges in the future. Inputs used in establishing fair value for impaired real estate assets generally fall within Level 3 of the fair value hierarchy, which are characterized as requiring significant judgment as little or no current market activity may be available for validation. The main indicator used to establish the classification of the inputs is current market conditions, as derived through the use of published commercial real estate market information and information obtained from brokers and other third party sources. The Company determines the valuation of impaired assets using generally accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations, and bona fide purchase offers received from third parties. Management may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate. The following table summarizes the Company ’s impairment charges: For the Three Months Ended (in thousands, except number of properties) 2024 2023 Number of properties 12 1 Impairment charge $ 26,400 $ 1,473 During the three months ended March 31, 2024, the Company recognized impairment of $ 26.4 million, resulting from changes in the Company’s long-term hold strategy with respect to the individual properties. The impairments were based on actual and expected sales prices of the individual properties and include a $ 15.2 million impairment charge on a healthcare property and an $ 11.2 million impairment charge on 11 healthcare properties sold as part of a portfolio with a gain of $ 59.1 million, excluding any impairment. |
Restricted Cash | Restricted Cash Restricted cash generally includes escrow funds the Company maintains pursuant to the terms of certain mortgages, lease agreements, and undistributed proceeds from the sale of properties under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”), and is reported within Prepaid expenses and other assets in the Condensed Consolidated Balance Sheets. Restricted cash consisted of the following: March 31, December 31, (in thousands) 2024 2023 Escrow funds and other $ 1,038 $ 1,138 1031 exchange proceeds — — $ 1,038 $ 1,138 |
Rent Received in Advance | Rent Received in Advance Rent received in advance represents tenant rent payments received prior to the contractual due date, and is included in Accounts payable and other liabilities in the Condensed Consolidated Balance Sheets. Rent received in advance consisted of the following: (in thousands) March 31, December 31, Rent received in advance $ 15,200 $ 14,776 |
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements The balances of financial instruments measured at fair value on a recurring basis are as follows (see Note 9): March 31, 2024 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 57,900 $ — $ 57,900 $ — December 31, 2023 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 46,096 $ — $ 46,096 $ — Long-term Debt – The fair value of the Company’s debt was estimated using Level 1, Level 2, and Level 3 inputs based on recent secondary market trades of the Company’s 2031 Senior Unsecured Public Notes (see Note 7), recent comparable financing transactions, recent market risk premiums for loans of comparable quality, applicable Secured Overnight Financing Rate (“SOFR”), Canadian Dollar Offered Rate (“CDOR”), U.S. Treasury obligation interest rates, and discounted estimated future cash payments to be made on such debt. The discount rates estimated reflect the Company’s judgment as to the approximate current lending rates for loans or groups of loans with similar maturities and assumes that the debt is outstanding through maturity. Market information, as available, or present value techniques were utilized to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist on specific loans, it is unlikely that the estimated fair value of any such debt could be realized by immediate settlement of the obligation. The following table summarizes the carrying amount reported in the Condensed Consolidated Balance Sheets and the Company ’s estimate of the fair value of the unsecured revolving credit facility, mortgages, unsecured term loans, and senior unsecured notes which reflects the fair value of interest rate swaps: (in thousands) March 31, December 31, Carrying amount $ 1,902,432 $ 1,919,607 Fair value 1,741,050 1,761,177 Non-recurring Fair Value Measurements The Company’s non-recurring fair value measurements at March 31, 2024 and December 31, 2023 consisted of the fair value of impaired real estate assets that were determined using Level 3 inputs. |
Right-of-Use Assets and Lease Liabilities/Rental Expense | Right-of-Use Assets and Lease Liabilities The Company is a lessee under non-cancelable operating leases associated with its corporate headquarters and other office spaces as well as with leases of land (“ground leases”). The Company records right-of-use assets and lease liabilities associated with these leases. The lease liability is equal to the net present value of the future payments to be made under the lease, discounted using estimates based on observable market factors. The right-of-use asset is generally equal to the lease liability plus initial direct costs associated with the leases. The Company includes in the recognition of the right-of-use asset and lease liability those renewal periods that are reasonably certain to be exercised, based on the facts and circumstances that exist at lease inception. Amounts associated with percentage rent provisions are considered variable lease costs and are not included in the initial measurement of the right-of-use asset or lease liability. The Company has made an accounting policy election, applicable to all asset types, not to separate lease from nonlease components when allocating contract consideration related to operating leases. Right-of-use assets and lease liabilities associated with operating leases were included in the accompanying Condensed Consolidated Balance Sheets as follows: March 31, December 31, (in thousands) Financial Statement Presentation 2024 2023 Righ t-of-use assets Prepaid expenses and other assets $ 7,528 $ 8,476 Lease liabilities Accounts payable and other liabilities 7,905 8,256 The Company’s right-of-use assets and lease liabilities primarily consist of a ten year lease for the Company’s corporate office space. The lease contains two five-year extension options, exercisable at the Company’s discretion, that are not reasonably certain to be exercised, and are therefore excluded from our calculation of the lease liability. |
Business Description (Tables)
Business Description (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Outstanding Equity and Economic Ownership Interest | The following table summarizes the outstanding equity and economic ownership interest of the Company: March 31, 2024 December 31, 2023 (in thousands) Shares of OP Units Total Diluted Shares of OP Units Total Diluted Ownership interest 188,435 8,833 197,268 187,614 8,928 196,542 Percent ownership of OP 95.5 % 4.5 % 100.0 % 95.5 % 4.5 % 100.0 % |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Impairment Charge | The following table summarizes the Company ’s impairment charges: For the Three Months Ended (in thousands, except number of properties) 2024 2023 Number of properties 12 1 Impairment charge $ 26,400 $ 1,473 |
Summary of Restricted Cash | Restricted cash consisted of the following: March 31, December 31, (in thousands) 2024 2023 Escrow funds and other $ 1,038 $ 1,138 1031 exchange proceeds — — $ 1,038 $ 1,138 |
Summary of Rents Received in Advance | Rent received in advance consisted of the following: (in thousands) March 31, December 31, Rent received in advance $ 15,200 $ 14,776 |
Balances of Financial Instruments Measured at Fair Value on Recurring Basis | The balances of financial instruments measured at fair value on a recurring basis are as follows (see Note 9): March 31, 2024 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 57,900 $ — $ 57,900 $ — December 31, 2023 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 46,096 $ — $ 46,096 $ — |
Summary of Carrying Amount Reported on Condensed Consolidated Balance Sheets | The following table summarizes the carrying amount reported in the Condensed Consolidated Balance Sheets and the Company ’s estimate of the fair value of the unsecured revolving credit facility, mortgages, unsecured term loans, and senior unsecured notes which reflects the fair value of interest rate swaps: (in thousands) March 31, December 31, Carrying amount $ 1,902,432 $ 1,919,607 Fair value 1,741,050 1,761,177 |
Summary of Right-of-Use Assets And Lease Liabilities Associated With Operating Leases Included In Condensed Consolidated Balance Sheets | Right-of-use assets and lease liabilities associated with operating leases were included in the accompanying Condensed Consolidated Balance Sheets as follows: March 31, December 31, (in thousands) Financial Statement Presentation 2024 2023 Righ t-of-use assets Prepaid expenses and other assets $ 7,528 $ 8,476 Lease liabilities Accounts payable and other liabilities 7,905 8,256 |
Acquisitions of Rental Proper_2
Acquisitions of Rental Property (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combinations [Abstract] | |
Summary of Allocation of Purchase Price | The following table summarizes the purchase price allocation for completed real estate acquisitions: For the Three Months Ended (in thousands) 2024 2023 Land $ — $ 781 Land improvements — 360 Buildings and improvements — 3,890 Acquired in-place leases (b) — 501 Acquired below-market leases (c) — ( 166 ) $ — $ 5,366 (b) The weighted average amortization period for acquired in-place leases is 20 years for acquisitions completed during the three months ended March 31, 2023. There were no acquisitions during the three month ended March 31, 2024. (c) The weighted average amortization period for acquired below-market leases is 20 years for acquisitions completed during the three months ended March 31, 2023. There were no acquisitions during the three month ended March 31, 2024. |
Sale of Real Estate (Tables)
Sale of Real Estate (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
Schedule of Sale of Real Estate | The Company closed on the following sales of real estate, none of which qualified as discontinued operations: For the Three Months Ended (in thousands, except number of properties) 2024 2023 Number of properties disposed 37 3 Aggregate sale price $ 251,752 $ 51,874 Aggregate carrying value ( 189,373 ) ( 46,995 ) Additional sales expenses ( 3,247 ) ( 1,464 ) Gain on sale of real estate $ 59,132 $ 3,415 |
Investment in Rental Property_2
Investment in Rental Property and Lease Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Rental Property Subject to Non-cancelable Operating Leases | Depreciation expense on investment in rental property was as follows: For the Three Months Ended (in thousands) 2024 2023 Depreciation $ 29,994 $ 31,157 |
Estimated Lease Payments to be Received under Non-cancelable Operating Leases | Estimated lease payments to be received under non-cancelable operating leases with tenants at March 31, 2024 are as follows: (in thousands) Remainder of 2024 $ 280,799 2025 387,464 2026 385,811 2027 370,847 2028 355,398 Thereafter 2,964,754 $ 4,745,073 |
Net Investment in Direct Financing Leases | The Company ’s net investment in direct financing leases was comprised of the following: (in thousands) March 31, December 31, Undiscounted estimated lease payments to be received $ 34,362 $ 35,155 Estimated unguaranteed residual values 14,547 14,547 Unearned revenue ( 22,272 ) ( 22,944 ) Reserve for credit losses ( 115 ) ( 115 ) Net investment in direct financing leases $ 26,522 $ 26,643 |
Direct Financing Leases, Lease Receivable Maturity | Undiscounted estimated lease payments to be received under non-cancelable direct financing leases with tenants at March 31, 2024 are as follows: (in thousands) Remainder of 2024 $ 2,379 2025 3,285 2026 3,357 2027 3,426 2028 3,496 Thereafter 18,419 $ 34,362 |
Summary of Amounts Reported as Lease Revenues, Net on the Consolidated Statements of Income and Comprehensive Income | The following table summarizes amounts reported as Lease revenues, net in the Condensed Consolidated Statements of Income and Comprehensive Income: For the Three Months Ended (in thousands) 2024 2023 Contractual rental amounts billed for operating leases $ 97,549 $ 98,102 Adjustment to recognize contractual operating lease billings on a 5,104 7,370 Net write-offs of accrued rental income ( 2,556 ) ( 105 ) Variable rental amounts earned 598 341 Earned income from direct financing leases 682 691 Interest income from sales-type leases 14 14 Operating expenses billed to tenants 5,105 5,075 Other income from real estate transactions (a) 66 7,392 Adjustment to revenue recognized for uncollectible rental ( 1,196 ) 112 Total lease revenues, net $ 105,366 $ 118,992 (a) The three months ended March 31, 2023, includes $ 7.5 million of lease termination fee income recognized in connection with the simultaneous lease termination and sale of an underlying office property for an additional $ 32.0 million in proceeds. |
Intangible Assets and Liabili_2
Intangible Assets and Liabilities, and Leasing Fees (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Liabilities Relating to Amortization | The following is a summary of intangible assets and liabilities, and leasing fees, and related accumulated amortization: (in thousands) March 31, December 31, Lease intangibles: Acquired above-market leases $ 42,636 $ 44,711 Less accumulated amortization ( 19,635 ) ( 20,312 ) Acquired above-market leases, net 23,001 24,399 Acquired in-place leases 400,956 416,206 Less accumulated amortization ( 150,707 ) ( 152,379 ) Acquired in-place leases, net 250,249 263,827 Total intangible lease assets, net $ 273,250 $ 288,226 Acquired below-market leases $ 96,245 $ 98,535 Less accumulated amortization ( 45,292 ) ( 45,004 ) Intangible lease liabilities, net $ 50,953 $ 53,531 Leasing fees $ 17,520 $ 18,117 Less accumulated amortization ( 6,174 ) ( 6,426 ) Leasing fees, net $ 11,346 $ 11,691 |
Schedule of Amortization of Intangible Lease Assets and Liabilities | Amortization of intangible lease assets and liabilities, and leasing fees was as follows: (in thousands) For the Three Months Ended Intangible Financial Statement Presentation 2024 2023 Acquired in-place leases and leasing fees Depreciation and amortization $ 7,696 $ 10,588 Above-market and below-market leases Lease revenues, net 1,021 2,694 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization of intangible assets and liabilities, and leasing fees at March 31, 2024 is as follows: (in thousands) Remainder of 2024 $ 18,640 2025 24,201 2026 23,246 2027 21,677 2028 19,853 Thereafter 126,026 $ 233,643 |
Unsecured Credit Agreements (Ta
Unsecured Credit Agreements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Instrument [Line Items] | |
Summary of Debt Issuance Cost Amortization | The following table summarizes debt issuance cost and original issuance discount amortization: For the Three Months Ended (in thousands) 2024 2023 Debt issuance costs and original issuance discount amortization $ 983 $ 986 |
Unsecured Debt | |
Debt Instrument [Line Items] | |
Summary of Unsecured Credit Agreements | The following table summarizes the Company ’s unsecured credit agreements: Outstanding Balance (in thousands, except interest rates) March 31, December 31, Interest Rate Maturity Date Unsecured revolving credit facility $ 73,820 $ 90,434 Applicable reference rate + 0.85 % (a) Mar. 2026 (c) Unsecured term loans: 2026 Unsecured Term Loan 400,000 400,000 one-month adjusted SOFR + 1.00 % (b) Feb. 2026 2027 Unsecured Term Loan 200,000 200,000 one-month adjusted SOFR + 0.95 % (b) Aug. 2027 2029 Unsecured Term Loan 300,000 300,000 one-month adjusted SOFR + 1.25 % (b) Aug. 2029 Total unsecured term loans 900,000 900,000 Unamortized debt issuance costs, net ( 3,740 ) ( 4,053 ) Total unsecured term loans, net 896,260 895,947 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 ( 4,502 ) ( 4,691 ) Total senior unsecured notes, net 845,498 845,309 Total unsecured debt, net $ 1,815,578 $ 1,831,690 (a) At March 31, 2024 and December 31, 2023 , a balance of $ 0.0 million and $ 15.0 million was subject to the one-month SOFR of 5.33 % and 5.35 %, respectively. The remaining balance of $ 100 million Canadian Dollar (”CAD”) borrowings remeasured to $ 73.8 million United States Dollar (”USD”) and $ 75.4 million USD, at March 31, 2024 and December 31, 2023, respectively, and was subject to the one-month CDOR of 5.29 % and 5.46 %, respectively. (b) At March 31, 2024 and December 31, 2023 , one-month SOFR was 5.33 % and 5.35 %, respectively. (c) The Company’s unsecured revolving credit facility contains two six-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.0625 % of the revolving commitments. |
Mortgages (Tables)
Mortgages (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Instrument [Line Items] | |
Schedule of Estimated Future Principal Payments | Estimated future principal payments to be made under the above mortgages and the Company ’s unsecured credit agreements (see Note 7) at March 31, 2024 are as follows: (in thousands) Remainder of 2024 $ 1,700 2025 20,195 2026 490,663 2027 351,596 2028 263,278 Thereafter 775,000 $ 1,902,432 |
Secured Debt | |
Debt Instrument [Line Items] | |
Summary of Unsecured Credit Agreements | The Company ’s mortgages consist of the following: Origination Maturity (in thousands, except interest rates) Date Date Interest March 31, December 31, Lender (Month/Year) (Month/Year) Rate 2024 2023 Wilmington Trust National Association Apr-19 Feb-28 4.92 % $ 43,868 $ 44,207 (a) (b) (c) (d) Wilmington Trust National Association Jun-18 Aug-25 4.36 % 18,615 18,725 (a) (b) (c) (d) PNC Bank Oct-16 Nov-26 3.62 % 16,129 16,241 (b) (c) Total mortgages 78,612 79,173 Debt issuance costs, net ( 95 ) ( 105 ) Mortgages, net $ 78,517 $ 79,068 (a) Non-recourse debt includes the indemnification/guaranty of the Company pertaining to fraud, environmental claims, insolvency, and other matters. (b) Debt secured by related rental property and lease rents. (c) Debt secured by guaranty of the OP. (d) Mortgage was assumed as part of the acquisition of the related property. The debt was recorded at fair value at the time of assumption. |
Interest Rate Swaps (Tables)
Interest Rate Swaps (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Company's Outstanding Interest-rate Swap Agreement | The following is a summary of the Company ’s outstanding interest rate swap agreements: (in thousands, except interest rates) March 31, 2024 December 31, 2023 Counterparty Maturity Date Fixed Variable Rate Index Notional Fair Notional Fair Wells Fargo Bank, N.A. October 2024 2.72 % daily compounded SOFR $ 15,000 $ 194 $ 15,000 $ 255 Capital One, National Association December 2024 1.58 % daily compounded SOFR 15,000 363 15,000 445 Bank of Montreal January 2025 1.91 % daily compounded SOFR 25,000 612 25,000 713 Truist Financial Corporation April 2025 2.20 % daily compounded SOFR 25,000 701 25,000 734 Bank of Montreal July 2025 2.32 % daily compounded SOFR 25,000 793 25,000 768 Truist Financial Corporation July 2025 1.99 % daily compounded SOFR 25,000 894 25,000 888 Truist Financial Corporation December 2025 2.30 % daily compounded SOFR 25,000 1,007 25,000 887 Bank of Montreal January 2026 1.92 % daily compounded SOFR 25,000 1,171 25,000 1,071 Bank of Montreal January 2026 2.05 % daily compounded SOFR 40,000 1,787 40,000 1,615 Capital One, National Association January 2026 2.08 % daily compounded SOFR 35,000 1,547 35,000 1,389 Truist Financial Corporation January 2026 1.93 % daily compounded SOFR 25,000 1,168 25,000 1,067 Capital One, National Association April 2026 2.68 % daily compounded SOFR 15,000 554 15,000 439 Capital One, National Association July 2026 1.32 % daily compounded SOFR 35,000 2,396 35,000 2,186 Bank of Montreal December 2026 2.33 % daily compounded SOFR 10,000 528 10,000 423 Bank of Montreal December 2026 1.99 % daily compounded SOFR 25,000 1,540 25,000 1,299 Toronto-Dominion Bank March 2027 2.46 % one-month CDOR 14,764 (a) 694 15,087 (a) 572 Wells Fargo Bank, N.A. April 2027 2.72 % daily compounded SOFR 25,000 1,118 25,000 806 Bank of Montreal December 2027 2.37 % daily compounded SOFR 25,000 1,568 25,000 1,215 Capital One, National Association December 2027 2.37 % daily compounded SOFR 25,000 1,563 25,000 1,197 Wells Fargo Bank, N.A. January 2028 2.37 % daily compounded SOFR 75,000 4,697 75,000 3,632 Bank of Montreal May 2029 2.09 % daily compounded SOFR 25,000 2,254 25,000 1,835 Regions Bank May 2029 2.11 % daily compounded SOFR 25,000 2,223 25,000 1,801 Regions Bank June 2029 2.03 % daily compounded SOFR 25,000 2,319 25,000 1,900 U.S. Bank National Association June 2029 2.03 % daily compounded SOFR 25,000 2,324 25,000 1,908 Regions Bank August 2029 2.58 % one-month SOFR 100,000 6,265 100,000 4,392 Toronto-Dominion Bank August 2029 2.58 % one-month SOFR 45,000 2,860 45,000 2,021 U.S. Bank National Association August 2029 2.65 % one-month SOFR 15,000 900 15,000 618 U.S. Bank National Association August 2029 2.58 % one-month SOFR 100,000 6,294 100,000 4,427 U.S. Bank National Association August 2029 1.35 % daily compounded SOFR 25,000 3,211 25,000 2,828 Regions Bank March 2032 2.69 % one-month CDOR 14,764 (a) 1,043 15,087 (a) 677 U.S. Bank National Association March 2032 2.70 % one-month CDOR 14,764 (a) 1,043 15,087 (a) 678 Bank of Montreal March 2034 2.81 % one-month CDOR 29,528 (b) 2,269 30,174 (b) 1,410 $ 973,820 $ 57,900 $ 975,435 $ 46,096 (a) The contractual notional amount is $ 20.0 million CAD . (b) The contractual notional amount is $ 40.0 million CAD . |
Total Amounts Recognized and Location of Gain (Loss) in Condensed Consolidated Statement of Income and Comprehensive Income (Loss), from Converting from Variable Rates to Fixed Rates | The total amounts recognized, and the location in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income, from converting from variable rates to fixed rates under these agreements were as follows: Amount of Gain (Loss) Reclassification from Total Interest Expense Recognized in Accumulated Other Presented in the Condensed Accumulated Other Comprehensive Income Consolidated Statements of (in thousands) Comprehensive Amount of Income and Comprehensive For the Three Months Ended March 31, Income Location Gain Income 2024 $ 11,804 Interest expense $ 7,548 $ 18,578 2023 ( 17,899 ) Interest expense 4,997 21,139 |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Noncontrolling Interest [Abstract] | |
Schedule of OP Units Exchanged for Shares of Common Stock | The following table summarizes OP Units exchanged for shares of common stock: For the Three Months Ended (in thousands) 2024 2023 OP Units exchanged for shares of common stock 95 896 Value of units exchanged $ 1,536 $ 14,897 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Restricted Stock Awards | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Restricted Stock | The following table presents information about the Company ’s RSAs: For the Three Months Ended (in thousands) 2024 2023 Compensation cost $ 1,043 $ 1,728 Dividends declared on unvested RSAs 295 136 Fair value of shares vested during the period 3,207 2,864 |
Summary of Restricted Stock Activity | The following table presents information about the Company ’s restricted stock activity: For the Three Months Ended March 31, 2024 2023 (in thousands, except per share amounts) Number of Shares Weighted Average Number of Shares Weighted Average Unvested at beginning of period 492 $ 18.63 396 $ 20.36 Granted 778 14.74 259 17.75 Vested ( 209 ) 19.26 ( 160 ) 20.36 Forfeited ( 25 ) 19.02 — — Unvested at end of period 1,036 15.57 495 19.00 |
Performance-based Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Restricted Stock | The following table presents compensation cost recognized on the Company ’s performance-based restricted stock units: For the Three Months Ended (in thousands) 2024 2023 Compensation cost $ 432 $ 151 |
Summary of Restricted Stock Activity | The following table presents information about the Company ’s performance-based restricted stock unit activity: For the Three Months Ended March 31, 2024 2023 (in thousands, except per share amounts) Number of Shares Weighted Average Number of Shares Weighted Average Unvested at beginning of period 351 $ 24.90 233 $ 26.27 Granted 202 15.84 186 23.78 Vested ( 88 ) 24.40 — — Forfeited ( 19 ) 25.09 ( 61 ) 26.80 Unvested at end of period 446 20.89 358 25.01 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Summary of Components used in Calculation of Basic and Diluted Earnings per Share | The following table summarizes the components used in the calculation of basic and diluted earnings per share (“EPS”): For the Three Months Ended (in thousands, except per share amounts) 2024 2023 Basic earnings: Net earnings attributable to Broadstone Net Lease, Inc. common $ 65,114 $ 39,304 Less: earnings allocated to unvested restricted shares ( 358 ) ( 136 ) Net earnings used to compute basic earnings per common share $ 64,756 $ 39,168 Diluted earnings: Net earnings used to compute basic earnings per common share $ 64,756 $ 39,168 Add: net earnings attributable to non-controlling interests 3,063 2,070 Add: undistributed earnings allocated to unvested restricted shares 63 — Less: undistributed earnings reallocated to unvested restricted shares ( 60 ) — Net earnings used to compute diluted earnings per common share $ 67,822 $ 41,238 Weighted average number of common shares outstanding 187,953 186,561 Less: weighted average unvested restricted shares (a) ( 663 ) ( 431 ) Weighted average number of common shares outstanding used in 187,290 186,130 Add: effects of restricted stock units (b) 285 220 Add: effects of convertible membership units (c) 8,842 9,826 Weighted average number of common shares outstanding used in 196,417 196,176 Basic earnings per share $ 0.35 $ 0.21 Diluted earnings per share $ 0.35 $ 0.21 (a) Represents the weighted average effects of 1,035,194 and 494,845 unvested restricted shares of common stock as of March 31, 2024 and 2023, respectively, which will be excluded from the computation of earnings per share until they vest. (b) Represents the weighted average effects of shares of common stock to be issued as though the end of the period were the end of the performance period (see Note 13). (c) Represents the weighted average effects of 8,833,236 and 9,308,457 OP Units outstanding at March 31, 2024 and 2023 , respectively. |
Business Description - Addition
Business Description - Additional Information (Detail) | Mar. 31, 2024 Property |
Business Description [Line Items] | |
Number of leased commercial properties owned | 759 |
Number of provinces | 759 |
UNITED STATES | |
Business Description [Line Items] | |
Number of leased commercial properties owned | 752 |
Number of States in which properties located | 44 |
Canadian Provinces | |
Business Description [Line Items] | |
Number of leased commercial properties owned | 7 |
Number of provinces | 4 |
Business Description - Summary
Business Description - Summary of Outstanding Equity and Economic Ownership Interest (Detail) - shares shares in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Broadstone Net Lease, LLC | ||
Business Description [Line Items] | ||
Percent ownership of OP, Shares of Common Stock | 95.50% | 95.50% |
Percent ownership of OP, OP Units | 4.50% | 4.50% |
Percent ownership of OP, Total Diluted Shares | 100% | 100% |
Ownership Interest | ||
Business Description [Line Items] | ||
Shares of Common Stock | 188,435 | 187,614 |
OP Units | 8,833 | 8,928 |
Total Diluted Shares | 197,268 | 196,542 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Additional impairment charges | $ 0 | ||
Impairment Charge on Reclassified Assets | 26,400,000 | ||
Deferred Gain on Sale of Property | 59,100,000 | ||
Lease termination fee | $ 7,500,000 | ||
Capitalized interest | 2,700,000 | $ 1,500,000 | |
Capitalized Costs | 133,100,000 | $ 95,000,000 | |
Company Fund in Property Under Development | 36,900,000 | 0 | |
Acquired in-place leases and leasing fees | 0 | 900,000 | |
Depreciation and amortization | 37,772,000 | 41,784,000 | |
Aggregate sale price | 251,752,000 | 51,874,000 | |
Carrying value of property sold | (189,373,000) | (46,995,000) | |
Healthcare Property [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment Charge on Reclassified Assets | 15,200,000 | ||
Eleven healthcare properties [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment Charge on Reclassified Assets | 11,200,000 | ||
Above and Below Market Leases | Lease Revenues, Net | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired in-place leases and leasing fees | 1,021,000 | 2,694,000 | |
Acquired In-Place Leases | Depreciation and Amortization | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired in-place leases and leasing fees | $ 7,696,000 | $ 10,588,000 |
Significant Accounting Policies
Significant Accounting Policies - Summary of Impairment Charge (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) Property | Mar. 31, 2023 USD ($) Property | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Number of properties | Property | 12 | 1 |
Impairment charge | $ | $ 26,400 | $ 1,473 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Components of Restricted Cash (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Abstract] | ||||
Escrow funds and other | $ 1,038 | $ 1,138 | ||
1031 exchange proceeds | 0 | 0 | ||
Restricted cash | $ 1,038 | $ 1,138 | $ 3,898 | $ 38,251 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Rents Received in Advance (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Rent received in advance | $ 15,200 | $ 14,776 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Balances of Financial Instruments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap, assets | $ 57,900 | $ 46,096 |
Fair Value, Measurements, Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap, assets | 57,900 | 46,096 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap, assets | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap, assets | 57,900 | 46,096 |
Fair Value, Measurements, Recurring | Fair Value Inputs Level3 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap, assets | $ 0 | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Carrying Amount Reported on Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Summary Of Significant Accounting Policies [Abstract] | ||
Carrying amount | $ 1,902,432 | $ 1,919,607 |
Fair value | $ 1,741,050 | $ 1,761,177 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Right-of-Use Assets And Lease Liabilities Associated With Operating Leases Included In Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets | Prepaid Expense and Other Assets |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable and Other Accrued Liabilities | Accounts Payable and Other Accrued Liabilities |
Right-of-use assets | $ 7,528 | $ 8,476 |
Lease liabilities | $ 7,905 | $ 8,256 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | ||
Issuance of shares of common stock, shares | 822,000 | |
Number of OP units exchanged | 94,500 | 896,349 |
Internalization - Summary of Ea
Internalization - Summary of Earnout Tranches, Applicable VWAP of REIT Share and Applicable Earnout Period (Details) - shares shares in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Internalization [Line Items] | ||
Shares of Common stock issued | 188,435 | 187,614 |
Acquisitions of Rental Proper_3
Acquisitions of Rental Property - Acquisitions of Rental Property Closed - (Detail) - Retail $ in Thousands | Mar. 14, 2023 USD ($) Customer | |
Business Acquisition [Line Items] | ||
Property Type | Retail | |
Number of Properties | Customer | 1 | |
Real Estate Acquisition Price | $ | $ 5,221 | [1] |
[1] Acquisition price excludes capitalized acquisition costs of $ 0.1 million. |
Acquisitions of Rental Proper_4
Acquisitions of Rental Property - Acquisitions of Rental Property Closed (Parenthetical) - (Detail) $ in Millions | Mar. 31, 2024 USD ($) |
Business Acquisition [Line Items] | |
Acquisition costs capitalized | $ 0.1 |
Acquisitions of Rental Proper_5
Acquisitions of Rental Property - Purchase Price Allocation for Real Estate Acquisitions (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Mar. 31, 2023 | |
Business Acquisition [Line Items] | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, assets | $ 0 | $ 5,366 | |
Land | |||
Business Acquisition [Line Items] | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, property, plant, and equipment | 0 | 781 | |
Land Improvements | |||
Business Acquisition [Line Items] | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, property, plant, and equipment | 0 | 360 | |
Buildings and Improvements | |||
Business Acquisition [Line Items] | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, property, plant, and equipment | 0 | 3,890 | |
Acquired In-Place Leases | |||
Business Acquisition [Line Items] | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, Intangible assets | [1] | 0 | 501 |
Acquired Below-Market Leases | |||
Business Acquisition [Line Items] | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, Intangible assets | [2] | $ 0 | $ 166 |
[1] The weighted average amortization period for acquired in-place leases is 20 years for acquisitions completed during the three months ended March 31, 2023. There were no acquisitions during the three month ended March 31, 2024. The weighted average amortization period for acquired below-market leases is 20 years for acquisitions completed during the three months ended March 31, 2023. There were no acquisitions during the three month ended March 31, 2024. |
Acquisitions of Rental Proper_6
Acquisitions of Rental Property - Purchase Price Allocation for Real Estate Acquisitions (Parenthetical) - (Detail) | 3 Months Ended |
Mar. 31, 2023 | |
Acquired In-Place Leases | |
Business Acquisition [Line Items] | |
Weighted average amortization period | 20 years |
Acquired Below-Market Leases | |
Business Acquisition [Line Items] | |
Weighted average amortization period | 20 years |
Sale of Real Estate - Schedule
Sale of Real Estate - Schedule of Sale of Real Estate (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) Property | Mar. 31, 2023 USD ($) Property | |
Real Estate [Line Items] | ||
Number of properties disposed | Property | 37 | 3 |
Aggregate sale price | $ 251,752 | $ 51,874 |
Aggregate carrying value | 189,373 | 46,995 |
Gain on sale of real estate | 59,132 | 3,415 |
Real Estate | ||
Real Estate [Line Items] | ||
Additional sales expenses | $ (3,247) | $ (1,464) |
Sale of Real Estate - Schedul_2
Sale of Real Estate - Schedule of Sale of Real Estate (Parenthetical) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Real Estate [Abstract] | |
Lease termination fee | $ 7.5 |
Proceeds from sale of property | $ 32 |
Investment in Rental Property_3
Investment in Rental Property and Lease Arrangements - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2024 PropertyNumber Property | |
Lessor Lease Description [Line Items] | |
Number of leased commercial properties owned | Property | 759 |
Number of real estate properties under operating leases | 746 |
Number of real estate properties under direct financing leases | 9 |
Number of real estate properties under sales-type leases | Property | 1 |
Number of real estate properties under direct financing leases that include land option | 3 |
Lessee, operating lease, existence of option to extend | true |
Lessee, finance lease, existence of option to extend | true |
Minimum | |
Lessor Lease Description [Line Items] | |
Lessor operating lease, initial terms | 10 years |
Lessor direct financing leases, initial terms | 10 years |
Maximum | |
Lessor Lease Description [Line Items] | |
Lessor operating lease, initial terms | 20 years |
Lessor direct financing leases, initial terms | 20 years |
Investment in Rental Property_4
Investment in Rental Property and Lease Arrangements - Summary of Depreciation Expense on Investment in Rental Property (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Depreciation | $ 29,994 | $ 31,157 |
Investment in Rental Property_5
Investment in Rental Property and Lease Arrangements - Estimated Lease Payments to be Received under Non-cancelable Operating Leases (Detail) $ in Thousands | Mar. 31, 2024 USD ($) |
Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity [Abstract] | |
Remainder of 2024 | $ 280,799 |
2025 | 387,464 |
2026 | 385,811 |
2027 | 370,847 |
2028 | 355,398 |
Thereafter | 2,964,754 |
Estimated lease payments to be received under non-cancelable operating leases | $ 4,745,073 |
Investment in Rental Property_6
Investment in Rental Property and Lease Arrangements - Net Investment in Direct Financing Leases (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Undiscounted estimated lease payments to be received | $ 34,362 | $ 35,155 |
Estimated unguaranteed residual values | 14,547 | 14,547 |
Unearned revenue | (22,272) | (22,944) |
Reserve for credit losses | 115 | 115 |
Net investment in direct financing leases | $ 26,522 | $ 26,643 |
Investment in Rental Property_7
Investment in Rental Property and Lease Arrangements - Undiscounted Estimated Lease Payments to be Received under Non-cancelable Direct Financing Leases (Detail) $ in Thousands | Mar. 31, 2024 USD ($) |
Capital Leases, Future Minimum Payments Receivable, Fiscal Year Maturity [Abstract] | |
Remainder of 2024 | $ 2,379 |
2025 | 3,285 |
2026 | 3,357 |
2027 | 3,426 |
2028 | 3,496 |
Thereafter | 18,419 |
Undiscounted estimated lease payments to be received under non-cancelable direct financing leases | $ 34,362 |
Investment in Rental Property_8
Investment in Rental Property and Lease Arrangements - Summary of Amounts Reported as Lease Revenues Net on the Condensed Consolidated Statements of Income and Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Leases [Abstract] | |||
Contractual rental amounts billed for operating leases | $ 97,549 | $ 98,102 | |
Adjustment to recognize contractual operating lease billings on a straight-line basis | 5,104 | 7,370 | |
Net write-offs of accrued rental income | 2,556 | 105 | |
Variable rental amounts earned | 598 | 341 | |
Earned income from direct financing leases | 682 | 691 | |
Interest income from sales-type leases | 14 | 14 | |
Operating expenses billed to tenants | 5,105 | (5,075) | |
Other income from real estate transactions | [1] | 66 | 7,392 |
Adjustment to revenue recognized for uncollectible rental amounts billed, net | (1,196) | 112 | |
Total Lease revenues, net | $ 105,366 | $ 118,992 | |
[1] The three months ended March 31, 2023, includes $ 7.5 million of lease termination fee income recognized in connection with the simultaneous lease termination and sale of an underlying office property for an additional $ 32.0 million in proceeds. |
Investment in Rental Property_9
Investment in Rental Property and Lease Arrangements - Summary of Amounts Reported as Lease Revenues Net on the Condensed Consolidated Statements of Income and Comprehensive Income (Loss) (Parenthetical) - (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Leases [Abstract] | |
Lease termination fee income | $ 7.5 |
Proceeds from sale of property | $ 32 |
Intangible Assets and Liabili_3
Intangible Assets and Liabilities, and Leasing Fees - Schedule of Intangible Assets and Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Lease intangibles: | ||
Intangible lease assets, net | $ 273,250 | $ 288,226 |
Acquired below-market leases | 96,245 | 98,535 |
Less accumulated amortization | (45,292) | (45,004) |
Intangible lease liabilities, net | 50,953 | 53,531 |
Leasing fees | 17,520 | 18,117 |
Less accumulated amortization | (6,174) | (6,426) |
Leasing fees, net | 11,346 | 11,691 |
Acquired Above-Market Leases | ||
Lease intangibles: | ||
Intangible lease assets, gross | 42,636 | 44,711 |
Less accumulated amortization | 19,635 | 20,312 |
Intangible lease assets, net | 23,001 | 24,399 |
Acquired In-Place Leases | ||
Lease intangibles: | ||
Intangible lease assets, gross | 400,956 | 416,206 |
Less accumulated amortization | 150,707 | 152,379 |
Intangible lease assets, net | $ 250,249 | $ 263,827 |
Intangible Assets and Liabili_4
Intangible Assets and Liabilities, and Leasing Fees - Schedule of Amortization of Intangible Lease Assets and Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Finite Lived Intangible Assets [Line Items] | ||
Acquired in-place leases and leasing fees | $ 0 | $ 900 |
Acquired In-Place Leases | Depreciation and Amortization | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired in-place leases and leasing fees | 7,696 | 10,588 |
Above and Below Market Leases | Lease Revenues, Net | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired in-place leases and leasing fees | $ 1,021 | $ 2,694 |
Intangible Assets and Liabili_5
Intangible Assets and Liabilities, and Leasing Fees - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 0 | $ 0.9 |
Intangible Assets and Liabili_6
Intangible Assets and Liabilities, and Leasing Fees - Schedule of Amortizable Intangible Assets (Detail) $ in Thousands | Mar. 31, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2024 | $ 18,640 |
2025 | 24,201 |
2026 | 23,246 |
2027 | 21,677 |
2028 | 19,853 |
Thereafter | 126,026 |
Total | $ 233,643 |
Unsecured Credit Agreements - S
Unsecured Credit Agreements - Summary of Unsecured Credit Agreements (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | ||
Debt Instrument [Line Items] | |||
Total unsecured debt | $ 1,902,432 | $ 1,919,607 | |
Long-term Debt | 1,902,432 | ||
Unsecured Debt | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 1,815,578 | 1,831,690 | |
Unsecured Debt | Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Total unsecured debt | 900,000 | 900,000 | |
Debt issuance costs, net | (3,740) | (4,053) | |
Long-term Debt | 896,260 | 895,947 | |
Unsecured Debt | Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Total unsecured debt | 850,000 | 850,000 | |
Unamortized debt issuance costs and original issuance discount, net | (4,502) | (4,691) | |
Long-term Debt | $ 845,498 | 845,309 | |
Unsecured Debt | Unsecured Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Interest Rate | Applicable reference rate + 0.85% (a) | ||
Maturity Date | [1] | 2026-03 | |
Basis spread on variable rate | [2] | 0.85% | |
Total unsecured debt | $ 73,820 | 90,434 | |
Unsecured Debt | 2026 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Interest Rate | one-month adjusted SOFR + 1.00% (b) | ||
Maturity Date | 2026-02 | ||
Total unsecured debt | $ 400,000 | 400,000 | |
Unsecured Debt | 2026 Unsecured Term Loan | SOFR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [3] | 1% | |
Unsecured Debt | 2027 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Interest Rate | one-month adjusted SOFR + 0.95% (b) | ||
Maturity Date | 2027-08 | ||
Total unsecured debt | $ 200,000 | 200,000 | |
Unsecured Debt | 2027 Unsecured Term Loan | SOFR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [3] | 0.95% | |
Unsecured Debt | 2029 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Interest Rate | one-month adjusted SOFR + 1.25% (b) | ||
Maturity Date | 2029-08 | ||
Total unsecured debt | $ 300,000 | 300,000 | |
Unsecured Debt | 2029 Unsecured Term Loan | SOFR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | [3] | 1.25% | |
Unsecured Debt | 2027 Senior Unsecured Notes | Senior Guaranteed Notes Series A | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 4.84% | ||
Maturity Date | 2027-04 | ||
Total unsecured debt | $ 150,000 | 150,000 | |
Unsecured Debt | 2028 Senior Unsecured Notes | Senior Guaranteed Notes Series B | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 5.09% | ||
Maturity Date | 2028-07 | ||
Total unsecured debt | $ 225,000 | 225,000 | |
Unsecured Debt | 2030 Senior Unsecured Notes | Senior Guaranteed Notes Series C | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 5.19% | ||
Maturity Date | 2030-07 | ||
Total unsecured debt | $ 100,000 | 100,000 | |
Unsecured Debt | 2031 Senior Unsecured Public Notes | Senior Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 2.60% | ||
Maturity Date | 2031-09 | ||
Total unsecured debt | $ 375,000 | $ 375,000 | |
[1] The Company’s unsecured revolving credit facility contains two six-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.0625 % of the revolving commitments. At March 31, 2024 and December 31, 2023 , a balance of $ 0.0 million and $ 15.0 million was subject to the one-month SOFR of 5.33 % and 5.35 %, respectively. The remaining balance of $ 100 million Canadian Dollar (”CAD”) borrowings remeasured to $ 73.8 million United States Dollar (”USD”) and $ 75.4 million USD, at March 31, 2024 and December 31, 2023, respectively, and was subject to the one-month CDOR of 5.29 % and 5.46 %, respectively. At March 31, 2024 and December 31, 2023 , one-month SOFR was 5.33 % and 5.35 %, respectively. |
Unsecured Credit Agreements -_2
Unsecured Credit Agreements - Summary of Unsecured Credit Agreements (Parenthetical) (Detail) $ in Thousands, $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 USD ($) | Mar. 31, 2024 CAD ($) | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | |||
Long-term Debt | $ 1,902,432 | ||
Unsecured Debt | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 1,815,578 | $ 1,831,690 | |
Unsecured Debt | Revolving Credit Facilities | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.0625% | ||
Unsecured Debt | 1 Month Canadian Dollar | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 73,800 | $ 100 | $ 75,400 |
Interest rate | 5.29% | 5.29% | 5.46% |
Unsecured Debt | 1 Month Secured Overnight | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 0 | $ 15,000 | |
Interest rate | 5.33% | 5.33% | 5.35% |
Unsecured Credit Agreements - A
Unsecured Credit Agreements - Additional Information (Detail) | Mar. 31, 2024 |
Debt Instrument [Line Items] | |
Weighted Average Fixed Rate | 5.30% |
Interest Rate Swap | |
Debt Instrument [Line Items] | |
Weighted Average Fixed Rate | 2.28% |
Weighted Average Inclusive Fixed Rate | 3.71% |
Unsecured Credit Agreements -_3
Unsecured Credit Agreements - Summary of Debt Issuance Cost Amortization (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Disclosure [Abstract] | ||
Debt issuance costs amortization | $ 983 | $ 986 |
Mortgages - Summary of Mortgage
Mortgages - Summary of Mortgages (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | ||
Debt Instrument [Line Items] | |||
Carrying amount | $ 1,902,432 | $ 1,919,607 | |
Mortgages, net | 78,517 | 79,068 | |
Secured Debt | |||
Debt Instrument [Line Items] | |||
Carrying amount | 78,612 | 79,173 | |
Debt issuance costs, net | $ (95) | (105) | |
Wilmington Trust National Association, Due February 28 | Secured Debt | |||
Debt Instrument [Line Items] | |||
Origination Date | [1],[2],[3],[4] | 2019-04 | |
Maturity Date | [1],[2],[3],[4] | 2028-02 | |
Debt instrument, interest rate | [1],[2],[3],[4] | 4.92% | |
Carrying amount | [1],[2],[3],[4] | $ 43,868 | 44,207 |
Wilmington Trust National Association, Due August 25 | Secured Debt | |||
Debt Instrument [Line Items] | |||
Origination Date | [1],[2],[4] | 2018-06 | |
Maturity Date | [1],[2],[4] | 2025-08 | |
Debt instrument, interest rate | [1],[2],[4] | 4.36% | |
Carrying amount | [1],[2],[4] | $ 18,615 | 18,725 |
PNC Bank | Secured Debt | |||
Debt Instrument [Line Items] | |||
Origination Date | [1],[2] | 2016-10 | |
Maturity Date | [1],[2] | 2026-11 | |
Debt instrument, interest rate | [1],[2] | 3.62% | |
Carrying amount | [1],[2] | $ 16,129 | $ 16,241 |
[1] Debt secured by guaranty of the OP. Debt secured by related rental property and lease rents. Mortgage was assumed as part of the acquisition of the related property. The debt was recorded at fair value at the time of assumption. Non-recourse debt includes the indemnification/guaranty of the Company pertaining to fraud, environmental claims, insolvency, and other matters. |
Mortgages - Additional Informat
Mortgages - Additional Information (Detail) $ in Millions | Mar. 31, 2024 USD ($) |
Debt Disclosure [Abstract] | |
Investment in rental property pledged as collateral | $ 119.8 |
Mortgages - Schedule of Estimat
Mortgages - Schedule of Estimated Future Principal Payments (Detail) $ in Thousands | Mar. 31, 2024 USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2024 | $ 1,700 |
2025 | 20,195 |
2026 | 490,663 |
2027 | 351,596 |
2028 | 263,278 |
Thereafter | 775,000 |
Long-term Debt | $ 1,902,432 |
Interest Rate Swaps - Summary o
Interest Rate Swaps - Summary of Interest-rate Swap Agreements (Detail) $ in Thousands, $ in Millions | 3 Months Ended | ||||
Mar. 31, 2024 USD ($) | Mar. 31, 2024 CAD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 CAD ($) | ||
Derivative [Line Items] | |||||
Notional Amount | $ 20 | $ 40 | |||
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative, Fixed rate | 3.71% | 3.71% | |||
Notional Amount | $ 973,820 | $ 975,435 | |||
Fair Value | $ 57,900 | 46,096 | |||
Interest Rate Swap | Wells Fargo Bank One | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2024-10 | ||||
Derivative, Fixed rate | 2.72% | 2.72% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 15,000 | 15,000 | |||
Fair Value | $ 194 | 255 | |||
Interest Rate Swap | Capital One, National Association One | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2024-12 | ||||
Derivative, Fixed rate | 1.58% | 1.58% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 15,000 | 15,000 | |||
Fair Value | $ 363 | 445 | |||
Interest Rate Swap | Regions Bank | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2032-03 | ||||
Derivative, Fixed rate | 2.69% | 2.69% | |||
Variable Rate Index | one-month CDOR | ||||
Notional Amount | [1] | $ 14,764 | 15,087 | ||
Fair Value | $ 1,043 | 677 | |||
Interest Rate Swap | Bank of Montreal One | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2025-01 | ||||
Derivative, Fixed rate | 1.91% | 1.91% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 612 | 713 | |||
Interest Rate Swap | Truist Financial Corporation One | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2025-04 | ||||
Derivative, Fixed rate | 2.20% | 2.20% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 701 | 734 | |||
Interest Rate Swap | Bank of Montreal Two | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2025-07 | ||||
Derivative, Fixed rate | 2.32% | 2.32% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 793 | 768 | |||
Interest Rate Swap | Truist Financial Corporation Two | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2025-07 | ||||
Derivative, Fixed rate | 1.99% | 1.99% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 894 | 888 | |||
Interest Rate Swap | Truist Financial Corporation Three | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2025-12 | ||||
Derivative, Fixed rate | 2.30% | 2.30% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 1,007 | 887 | |||
Interest Rate Swap | Bank of Montreal Three | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2026-01 | ||||
Derivative, Fixed rate | 1.92% | 1.92% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 1,171 | 1,071 | |||
Interest Rate Swap | Bank of Montreal Four | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2026-01 | ||||
Derivative, Fixed rate | 2.05% | 2.05% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 40,000 | 40,000 | |||
Fair Value | $ 1,787 | 1,615 | |||
Interest Rate Swap | Capital One, National Association Two | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2026-01 | ||||
Derivative, Fixed rate | 2.08% | 2.08% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 35,000 | 35,000 | |||
Fair Value | $ 1,547 | 1,389 | |||
Interest Rate Swap | Truist Financial Corporation Four | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2026-01 | ||||
Derivative, Fixed rate | 1.93% | 1.93% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 1,168 | 1,067 | |||
Interest Rate Swap | Capital One, National Association Three | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2026-04 | ||||
Derivative, Fixed rate | 2.68% | 2.68% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 15,000 | 15,000 | |||
Fair Value | $ 554 | 439 | |||
Interest Rate Swap | Capital One, National Association Four | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2026-07 | ||||
Derivative, Fixed rate | 1.32% | 1.32% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 35,000 | 35,000 | |||
Fair Value | $ 2,396 | 2,186 | |||
Interest Rate Swap | Bank of Montreal Five | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2026-12 | ||||
Derivative, Fixed rate | 2.33% | 2.33% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 10,000 | 10,000 | |||
Fair Value | $ 528 | 423 | |||
Interest Rate Swap | Bank of Montreal Six | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2026-12 | ||||
Derivative, Fixed rate | 1.99% | 1.99% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 1,540 | 1,299 | |||
Interest Rate Swap | Toronto-Dominion Bank | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2027-03 | ||||
Derivative, Fixed rate | 2.46% | 2.46% | |||
Variable Rate Index | one-month CDOR | ||||
Notional Amount | [1] | $ 14,764 | 15,087 | ||
Fair Value | $ 694 | 572 | |||
Interest Rate Swap | Toronto Dominion Bank One Member | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2029-08 | ||||
Derivative, Fixed rate | 2.58% | 2.58% | |||
Variable Rate Index | one-month SOFR | ||||
Notional Amount | $ 45,000 | 45,000 | |||
Fair Value | $ 2,860 | 2,021 | |||
Interest Rate Swap | Wells Fargo Bank Two | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2027-04 | ||||
Derivative, Fixed rate | 2.72% | 2.72% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 1,118 | 806 | |||
Interest Rate Swap | Bank of Montreal Seven | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2027-12 | ||||
Derivative, Fixed rate | 2.37% | 2.37% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 1,568 | 1,215 | |||
Interest Rate Swap | Capital One, National Association Five | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2027-12 | ||||
Derivative, Fixed rate | 2.37% | 2.37% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 1,563 | 1,197 | |||
Interest Rate Swap | Wells Fargo Bank Four | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2028-01 | ||||
Derivative, Fixed rate | 2.37% | 2.37% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 75,000 | 75,000 | |||
Fair Value | $ 4,697 | 3,632 | |||
Interest Rate Swap | Bank of Montreal Eight | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2029-05 | ||||
Derivative, Fixed rate | 2.09% | 2.09% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 2,254 | 1,835 | |||
Interest Rate Swap | Regions Bank One | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2029-05 | ||||
Derivative, Fixed rate | 2.11% | 2.11% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 2,223 | 1,801 | |||
Interest Rate Swap | Regions Bank Two | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2029-06 | ||||
Derivative, Fixed rate | 2.03% | 2.03% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 2,319 | 1,900 | |||
Interest Rate Swap | U.S. Bank National Association | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2029-06 | ||||
Derivative, Fixed rate | 2.03% | 2.03% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 2,324 | 1,908 | |||
Interest Rate Swap | U S Bank National Association One | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2029-08 | ||||
Derivative, Fixed rate | 2.65% | 2.65% | |||
Variable Rate Index | one-month SOFR | ||||
Notional Amount | $ 15,000 | 15,000 | |||
Fair Value | $ 900 | 618 | |||
Interest Rate Swap | U S Bank National Association Two | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2029-08 | ||||
Derivative, Fixed rate | 2.58% | 2.58% | |||
Variable Rate Index | one-month SOFR | ||||
Notional Amount | $ 100,000 | 100,000 | |||
Fair Value | $ 6,294 | 4,427 | |||
Interest Rate Swap | Regions Bank Three | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2029-08 | ||||
Derivative, Fixed rate | 2.58% | 2.58% | |||
Variable Rate Index | one-month SOFR | ||||
Notional Amount | $ 100,000 | 100,000 | |||
Fair Value | $ 6,265 | 4,392 | |||
Interest Rate Swap | U S Bank National Association Three | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2029-08 | ||||
Derivative, Fixed rate | 1.35% | 1.35% | |||
Variable Rate Index | daily compounded SOFR | ||||
Notional Amount | $ 25,000 | 25,000 | |||
Fair Value | $ 3,211 | 2,828 | |||
Interest Rate Swap | Us Bank National Association Four Member | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2032-03 | ||||
Derivative, Fixed rate | 2.70% | 2.70% | |||
Variable Rate Index | one-month CDOR | ||||
Notional Amount | [1] | $ 14,764 | 15,087 | ||
Fair Value | $ 1,043 | 678 | |||
Interest Rate Swap | Bank of Montreal Nine | |||||
Derivative [Line Items] | |||||
Derivative, Maturity date | 2034-03 | ||||
Derivative, Fixed rate | 2.81% | 2.81% | |||
Variable Rate Index | one-month CDOR | ||||
Notional Amount | [2] | $ 29,528 | 30,174 | ||
Fair Value | $ 2,269 | $ 1,410 | |||
[1] The contractual notional amount is $ 20.0 million CAD The contractual notional amount is $ 40.0 million CAD |
Interest Rate Swaps - Summary_2
Interest Rate Swaps - Summary of Interest-rate Swap Agreements (Parenthetical) (Detail) $ in Thousands, $ in Millions | Mar. 31, 2024 USD ($) | Mar. 31, 2024 CAD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 CAD ($) |
Derivative [Line Items] | ||||
Contractual notional amount | $ 20 | $ 40 | ||
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Contractual notional amount | $ 973,820 | $ 975,435 |
Interest Rate Swaps - Total Amo
Interest Rate Swaps - Total Amounts Recognized From Converting Variable Rates to Fixed Rates and Location of Gain (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivative [Line Items] | ||
Total Interest Expense Presented in the Condensed Consolidated Statements of Income and Comprehensive Income | $ 18,578 | $ 21,139 |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | $ 11,804 | $ (17,899) |
Reclassification from Accumulated Other Comprehensive Income (Loss), Location | Interest expense | Interest expense |
Reclassification from Accumulated Other Comprehensive Income (Loss), Amount of Loss | $ 7,548 | $ 4,997 |
Total Interest Expense Presented in the Condensed Consolidated Statements of Income and Comprehensive Income | $ 18,578 | $ 21,139 |
Interest Rate Swaps - Additiona
Interest Rate Swaps - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Derivative [Line Items] | |
Weighted Average Fixed Rate | 5.30% |
Accumulated losses reclassified to interest expense | $ 25.6 |
Interest Rate Swap | |
Derivative [Line Items] | |
Derivative, Fixed Interest Rate | 3.71% |
Weighted Average Fixed Rate | 2.28% |
Non-Controlling Interests - Sch
Non-Controlling Interests - Schedule of OP Units Exchanged for Shares of Common Stock (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Common Stock | ||
Noncontrolling Interest [Line Items] | ||
OP Units exchanged for shares of common stock | 95,000 | 896,000 |
Additional Paid-in Capital | ||
Noncontrolling Interest [Line Items] | ||
Value of units exchanged | $ 1,536 | $ 14,897 |
Credit Risk Concentrations - Ad
Credit Risk Concentrations - Additional Information (Detail) - Customer | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Concentration Risk [Line Items] | ||
Lease revenue, net, percentage | 10% | 10% |
Number of tenants or common franchises | 0 | 0 |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Sep. 30, 2023 | |
Equity [Line Items] | |||
Issuance of shares of common stock, shares | 822,000 | ||
Net proceeds from issuance of common stock | $ (231) | $ 170 | |
ATM | |||
Equity [Line Items] | |||
Net proceeds from issuance of common stock | $ 145,400 | ||
Share Repurchase Program [Member] | |||
Equity [Line Items] | |||
Common stock shares repurchased | 0 | ||
Maximum | Share Repurchase Program [Member] | |||
Equity [Line Items] | |||
Repurchase of common stock value | $ 150,000 | ||
Common Stock | |||
Equity [Line Items] | |||
Issuance of shares of common stock, shares | 259,000 | ||
Common Stock | Maximum | |||
Equity [Line Items] | |||
Gross Sale Price | $ 400,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Restricted Stock Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares of restricted stock | 778,000 | 259,000 |
Weighted Average Grant Date Fair Value per share, Granted | $ 14.74 | $ 17.75 |
Unrecognized compensation costs | $ 15 | |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years 10 months 24 days | |
Performance-based Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares of restricted stock | 202,000 | 186,000 |
Weighted Average Grant Date Fair Value per share, Granted | $ 15.84 | $ 23.78 |
Unrecognized compensation costs | $ 6.1 | |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 3 months 18 days | |
2020 Equity Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Weighted Average Grant Date Fair Value per share, Granted | $ 14.74 | $ 17.75 |
2020 Equity Incentive Plan | Restricted Stock Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares of restricted stock | 777,943 | 259,099 |
2020 Equity Incentive Plan | Performance-based Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares of restricted stock | 202,308 | 186,481 |
Non-vested share awards percentage | 50% | |
Vesting percentage payout schedule can produce | 100% | |
Performance period | 3 years | |
Percentage as rTSR of peer group | 55% | |
Share Based Payment Award Based, Reduction in Non Vested Share Awards Percentage | 25% | |
2020 Equity Incentive Plan | Performance-based Restricted Stock Units | Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting percentage payout schedule can produce | 0% | |
Percentage as rTSR of peer group | 55% | |
2020 Equity Incentive Plan | Performance-based Restricted Stock Units | Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting percentage payout schedule can produce | 200% | |
2020 Equity Incentive Plan | Tranche One | Restricted Stock Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
2020 Equity Incentive Plan | Tranche Two | Restricted Stock Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
2020 Equity Incentive Plan | Tranche Three | Restricted Stock Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
2020 Equity Incentive Plan | Tranche Four | Restricted Stock Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Award vesting period | 5 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of RSAs (Detail) - Restricted Stock Awards - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Compensation cost | $ 1,043 | $ 1,728 |
Dividends declared on unvested RSAs | 295 | 136 |
Fair value of shares vested during the period | 3,207 | $ 2,864 |
Unamortized value of RSAs | $ 15,000 | |
Weighted average amortization period (in years) | 3 years 10 months 24 days |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of RSA Activity (Detail) - Restricted Stock Awards - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Unvested at beginning of period | 492 | 396 |
Number of Shares, Granted | 778 | 259 |
Number of Shares, Vested | (209) | (160) |
Number of Shares, Forfeited | (25) | 0 |
Number of Shares, Unvested at end of period | 1,036 | 495 |
Weighted Average Grant Date Fair Value per Share, Unvested at beginning of period | $ 18.63 | $ 20.36 |
Weighted Average Grant Date Fair Value per share, Granted | 14.74 | 17.75 |
Weighted Average Grant Date Fair Value per Share, Vested | 19.26 | 20.36 |
Weighted Average Grant Date Fair Value per Share, Forfeited | 19.02 | 0 |
Weighted Average Grant Date Fair Value per Share, Unvested at end of period | $ 15.57 | $ 19 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of PRSUs (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Performance-based Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Compensation cost | $ 432 | $ 151 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of PRSU Activity (Detail) - Performance-based Restricted Stock Units - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Unvested at beginning of period | 351 | 233 |
Number of Shares, Granted | 202 | 186 |
Number of Shares, Vested | (88) | 0 |
Number of Shares, Forfeited | (19) | (61) |
Number of Shares, Unvested at end of period | 446 | 358 |
Weighted Average Grant Date Fair Value per Share, Unvested at beginning of period | $ 24.9 | $ 26.27 |
Weighted Average Grant Date Fair Value per share, Granted | 15.84 | 23.78 |
Weighted Average Grant Date Fair Value per Share, Vested | 24.4 | 0 |
Weighted Average Grant Date Fair Value per Share, Forfeited | 25.09 | 26.8 |
Weighted Average Grant Date Fair Value per Share, Unvested at end of period | $ 20.89 | $ 25.01 |
Earnings per Share - Summary of
Earnings per Share - Summary of Components used in Calculation of Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Basic earnings: | |||
Net Income (Loss) | $ 65,114 | $ 39,304 | |
Less: earnings allocated to unvested restricted shares | 358 | 136 | |
Net earnings used to compute basic earnings per common share | 64,756 | 39,168 | |
Diluted earnings: | |||
Net earnings used to compute basic earnings per share | 64,756 | 39,168 | |
Add: net earnings attributable to non-controlling interests | 3,063 | 2,070 | |
Add: undistributed earnings allocated to unvested restricted shares | 63 | 0 | |
Less: undistributed earnings reallocated to unvested restricted shares | (60) | 0 | |
Net earnings used to compute diluted earnings per common share | $ 67,822 | $ 41,238 | |
Weighted average number of common shares outstanding | 187,953,000 | 186,561,000 | |
Less: weighted average unvested restricted shares | [1] | (663,000) | (431,000) |
Weighted average number of common shares outstanding used in basic earnings per common share | 187,290,000 | 186,130,000 | |
Add: effects of restricted stock units | [2] | 285,000 | 220,000 |
Add: effects of convertible membership units | [3] | 8,842,000 | 9,826,000 |
Weighted average number of common shares outstanding used in diluted earnings per common share | 196,417,000 | 196,176,000 | |
Basic earnings per share | $ 0.35 | $ 0.21 | |
Diluted earnings per share | $ 0.35 | $ 0.21 | |
[1] Represents the weighted average effects of 1,035,194 and 494,845 unvested restricted shares of common stock as of March 31, 2024 and 2023, respectively, which will be excluded from the computation of earnings per share until they vest. Represents the weighted average effects of shares of common stock to be issued as though the end of the period were the end of the performance period (see Note 13). Represents the weighted average effects of 8,833,236 and 9,308,457 OP Units outstanding at March 31, 2024 and 2023 , respectively. |
Earnings per Share - Summary _2
Earnings per Share - Summary of Components used in Calculation of Basic and Diluted Earnings per Share (Parenthetical) (Detail) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Unvested restricted shares of common stock | 1,035,194 | 494,845 |
Weighted average effects of OP Units outstanding | 8,833,236 | 9,308,457 |
Supplemental Cash Flow Disclo_2
Supplemental Cash Flow Disclosures - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Line Items] | ||
Cash paid for interest | $ 15,000 | $ 17,100 |
Cash paid for income taxes | 20 | 400 |
Dividends payable | $ 56,900 | $ 54,500 |
Number Of Operating Units Exchanged | 94,500 | 896,349 |
Additional Paid-in Capital | ||
Supplemental Cash Flow Elements [Line Items] | ||
Conversion of OP Units to shares of common stock | $ 1,536 | $ 14,897 |
Common Stock and OP Units | ||
Supplemental Cash Flow Elements [Line Items] | ||
Issuance of shares common stock upon conversion of OP units | 94,500 | 896,349 |
Conversion of OP Units to shares of common stock | $ 1,500 | $ 14,900 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Mar. 31, 2024 USD ($) |
Loss Contingencies [Line Items] | |
Property and Acquisition Commitment fund | $ 74.1 |
Potential liability due to taxable sales of applicable properties | $ 20.4 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Estimated Future Lease Payments Required Under Non-cancelable Operating Leases as well as Reconciliation to Lease Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease liabilities | $ 7,905 | $ 8,256 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Apr. 25, 2024 | Apr. 15, 2024 | Mar. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Subsequent Event [Line Items] | ||||||
Proceeds from sale of property | $ 251,752 | $ 51,874 | ||||
Gain (Loss) on Sale of Properties | 59,132 | 3,415 | ||||
Borrowings on unsecured revolving credit facility | 65,500 | $ 29,000 | ||||
Mortgages, net | $ 78,517 | 78,517 | $ 79,068 | |||
Two Real Estate Properties | ||||||
Subsequent Event [Line Items] | ||||||
Acquisition of Additional Rental Property and Associated Intangible Assets and Liabilities | 500 | 500 | ||||
Carrying value of properties | 18,400 | $ 18,400 | ||||
Proceeds from sale of property | 22,300 | |||||
Additional expenses related to sale of property | 400 | |||||
Gain (Loss) on Sale of Properties | $ 3,500 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Distribution paid | $ 56,200 | |||||
Quarterly distribution per share | $ 0.29 | |||||
Quarterly distribution payable date | Jul. 15, 2024 | |||||
Quarterly distribution date of record | Jun. 28, 2024 |