BNL - Earnings call 3 2020 | Broadstone Net Lease, Inc.

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Operator

Hello. Welcome to Broadstone Net Lease's Third Quarter 2020 Earnings Conference Call. My name is Kate, and I will be your operator today. Please note that today's call is being recorded. I would now like to turn the call over to Kevin Fennell, Senior Vice President of Capital Markets at Broadstone. ahead. go Please

Kevin Fennell

Ryan joining Quarter for will for Net our Broadstone from Thank Earnings us Call. Third CFO, and Czarnecki; XXXX CEO, you On Lease's our you Chris today Albano. today's hear call,

for Before materially. and We following which contains the or everyone pandemic. provided filings our XXXX, of June Form made this presentation XX-K statements the conference but the of including we the with differ will not the our actual cause forward-looking we risks this results undue to ended call over for Czarnecki. more call uncertainties place such XX-Q those forward-looking If quarter CEO, of date and or during risks ongoing and related risk the the want XX, to to Chris only statements to begin, year are call. subject our remind forward-looking our you detailed turn of that the to other more December for SEC Form materialize, are caution Any SEC a ended uncertainties, reliance filings, one statements, differences. that limited these now you to discussion factors these to may not including I XXXX, XX, may on as refer COVID-XX

Christopher Czarnecki

accretive portfolio IPO, liquidity, and earnings Thank through everyone, our which completed Broadstone excited a are positions as call property us first leverage traded acquisition have you, and publicly base, welcome, to After an Lease's we lower enhanced and recently we Kevin, Net expanded opportunities. attractive to company. our to grow believe shareholder

proven, on long-term continue all our value creating remains strategy to and investment intends diversified team shareholders. executing for of on our Our focused

challenging that very and take to very the a done excited such business The future Broadstone of to execute high job have also all level team is the I a of at during continued a running moment a the period. company. has the tremendous recognize employees of to want about

the strength team investment corporate performance Our and established management portfolio strategy. accomplishments our differentiated of a testament platform, to experienced results are and

September Our sheet. ratio accounting initial the thus of roughly for XX. debt placed million repay interest, million We $XXX.X closed X.X additional net leverage public to proceeds $XXX and our on offering shares of $XXX.X and XX, million proceeds related election million used the raising the on balance October cash significantly issue underwriter's to after on reducing of accrued

ample sheet further moment. a credit a In conjunction investment-grade our million unsecured balance with I'll discuss the solidify on closed IPO, also and $XXX opportunities, pursue these All the new position company in we factors revolving more attractive facility. with growth which to liquidity

is Aside from market the the pandemic. positive IPO, assessment muted, by the relatively the a created ongoing in quarter was business activity which backdrop given

approximately and constructed of for rents thoughtfully our of third we portfolio, result a to collected date XX.X% and quarter As XX.X% October. diversified highly of rents

collected XXX% of us that during third was also owed We quarter. rent the the deferred to

$X.X to for quarter, proceeds we of X also for dispositions million, of During million. year-to-date bringing net assets proceeds the $XX.X XX assets net total sold

weighted X the rate Sales quarter was and the during leased, vacant average were that disposition included quick properties occupied the For restaurants. X cap service properties X.X%.

leased period. annually Supply, of continues to executed rates our extension scheduled same also properties of Rents years who extensions of lease and end, the XXXX lease we continue front, end care at After during mid-XXXX, the at for that on the for to X QX, properties at On on expiring tenants. extensions Tractor we be XX-year and X XX the these previously in leasing assets health were X and one our increase separate X top completed respectively. leases quarter

respectively. on assigned company BaaX the S&P note investment-grade and and ratings Moody's of Tractor Supply. quick BBB, A In October,

nice is place not do that it validation of see we've to been credit on ratings, XXXX. in business we investing While since third-party particular a model emphasis investment-grade

during are our on we expansions year-to-date and other in $X.X investment activity total invested which $X.X in of generate we improvements X.X% meaningful brings not for to additional million properties the exchange we quarter, return. actively million, a This weighted for acquiring will rent. While average existing tenants

We tenants XXXX. work capital as to to our and accretive with way our an QX view and expansions on continue and assets to additional deploy improvements this into

XX.X% states occupancy September X of includes our The portfolio escalators. XX As XX.X Canada. a term annual properties in across average with years of remaining of weighted and rent lease and portfolio XXX XX, has X.X% place province maintained

include across for be growth multiple is diversified stability help primarily continue ever-changing care, afforded our returns, believe and portfolio portfolio strategy and delivers restaurant, office properties. risk-adjusted avenues which asset attributes health that defensive We provide diversification types, Our through industrial, multiple an world. in will to attractive and retail

progress pipeline, up actionable their weighted IPO, happy with into Leading the the of acquisitions multiple have to investment began investments rate that channels we of as made. have $XX our cash contracts I'm we capitalization sourcing advancing And with initial and today, an X average entered for purchase across of asset types. team million opportunities X%.

annual both during X.X%. have The properties increases quarter. transactions fourth close an to expected of of lease XX.X weighted approximately and weighted remaining will years We the approximately rent term average average expect

in attractive which, other building IPO, our quickly to momentum million has team represent We a pipeline attractive into under successfully acquisition also great build investments likely QX or to of the continues have conclusion, letter if job properties XXXX. and intent, of close QX done after opportunities heading of The to a brought $XX XXXX.

views cautious portfolio, be types negatively pandemic, notably opportunities, the As We tenants. ongoing assets on by we asset cautious affected and believe more existing office dining. remain we we level casual and on of these the hold certain same on heightened could pursue to maintained that we within our a attention investment continue additional assets do where

sector disruption also tenant. returns the team risk-adjusted diversified our pursue experienced we have ensure effects that single flexibility while Importantly, limiting of to and strategy find we any within where growth or negative attractive the occurring

for of Lease, ahead been during team one Broadstone for our Net we on have has excited and unprecedented the accomplished opportunities quarter I'm significance great us. of and times proud what value focused This to shareholders. We these of of go has while risk-adjusted like over results quarter the turn greater generating detail. Ryan remain over creating call for the in our I the to would now to long-term attractive returns

Ryan Albano

on to Thanks, year. during to comments efforts ability change first like to I'd Chris. countless constant echo everybody and recognize this your for and Broadstone near their team adapt the

addition running In on execute on completed moving business a we the know continuing is proven strategy milestone forward. everyone to with remotely, focused seamlessly major I IPO, and the to our

I'd financial profile additional details provide the our the IPO. in on activities into like diving quarter, to after Before

indicated, we IPO QX Chris strengthened as our we our for balance Xx. accounting to as partial net As from overallotment, sheet significantly by measured X.Xx using debt After ratio estate adjusted of leverage the reduced to EBITDA XXXX reduced real and leverage for proceeds.

also We option, our revolving no weighted million in years average to additional debt maturity with a significant term X increased available approximately X-year $XXX at of credit until a our maturities new an resulting XXXX. facility year plus debt with

have a near growth less deploy, available than of our Xx, believe sufficient financial over the our we X liquidity and objectives pursue revolver Given on million to leverage of and flexibility target in balance term. to ratio cash we $XXX

at of relief an quarterly on pandemic. update to onset request and the our during rent QX granted Moving first our update. collection to the we performance give I'd activity the like

for today, Chris October, of the rent, trend we As into XX.X% which of XX.X% which base continued This mentioned, rent as saw results compares QX third to strong collected collected of we XX.X%. of favorably owed. collection quarter already in we

short-term partial XX deferral have of in reminder, September As each deferrals And as those agreements granted a periods XX, for we the QX. of expired.

each rent these XXX% of tenants, that to of we also repayment collecting in deferred was the the from scheduled During in of quarter, owed third previously addition quarter. for rent XXX% base received

deferred to XX, weighted receive As over a $X.X approximately X.X of rent remaining months. of September million of scheduled period average we are

In which previously of rent The with scheduled tenant required exchange agreement amount also we a of casual is pay in January rent, rent. of additional abatement runs term, a tenant X through into base QX XXXX for before partial that years dining minimum returning to a entered upon during to The base clause have effective received thresholds pursuant combined. additional certain to rent approximately period, we and increases and additional additional $X.X million if that August, abatement for as based became in the September met exceeded. as or base clause rent rent are well lease August sales of

bankruptcy activity and or proceedings on Van One our XX.X% Van $X.XX rent final collection in total of Art post-petition base approximately million, resolved claim of to our We claim during the XX% the representing Art total owed. the point post-petition received quarter relates Furniture.

Furniture City under long-term previously discussed, brand. former we Art XX operates retenanted have American X the we of Signature, with Value who leases locations As our Van

In earlier remaining X a properties lease this week. we addition X to under X those retenanted the properties, long-term of

remaining evaluate We continue re-lease for locations. market X various to for and alternatives the

X negative adjustments locations these going $X.X to to our recognized million previously resulted optimal sold we and assets office we of as is the The Art quarter, most of remaining during million the the continue severity of quarter. an sale vacant solutions $XX.X X that and on X was medical the market approximately we value on are evaluate as the I and Van length has carrying building X locations XX, assumptions. mentioned, Art former September During property Van properties The properties. and re-leasing pandemic the and potential for impairment in aggregate a provision forward.

result headline were to closed earnings that as period primarily Per-share QX per of a shares. The we a a over in On additional a $XX.X Moving growth an results. third large in diluted X.X% compared our increase late than the quarter, the AFFO representing results basis, acquisition XX% given increase in August was XXXX. share, lower AFFO of contribution XXXX. of of to impact increase AFFO XXXX. $X.XX the We million from same was per-share the of reported of

third million of G&A the quarter, incurred For $X.X expense. we

public to growth our likely our near incur respect in the to While we as expect achieve time over company we expenses cost costs of incremental economies with G&A structure. portfolio outpaces scale term, will

or provide paid on declared dividend. as September Directors before to shareholders like of per common share XXXX, of holders and payable I'd in in that our October. our meeting, Finally, January $X.XX We to XX, XX, dividend $X.XXX of of distribution X on an a record December was on of unit Board August OP November OP as record previously XXXX. of our X, set update At unitholders a XXXX, XX to Board

back will With it over turn to that, Chris. I

Christopher Czarnecki

Thank Ryan. you,

of has Our face its set exists unprecedented resiliency to opportunity excited attractive the net attention turn that proven the believe the uncertainty. to the portfolio we after market. completing in And in lease we're our IPO,

historically. investment acquisition exceed our diversified through the have to positioned are our as continue and we QX advance We same to initial believe in well employed process, we opportunities we expectations manner

now we'll for questions. and remarks, prepared open up our the concludes This line

Operator

[Operator Instructions] Capital from Our Markets. first Kim John is from BMO question

John Kim

guess wondering with it I will I that transaction of as government. there's a like in far Biden the was any a as of means intact. market XXXX terms today, you if what looks And think just as you to comments presidency with this likelihood remain had split the be going

Christopher Czarnecki

you. Sure. great to the John, it's to Thank question. you for talk

general, with quarter, in the comments has And think it's year. that we've this towards -- monitor And been we've attention way had robust. or view transaction good one that's what's fourth through the I the election other to market, on excuse the the me, way XXXX one know or perspective, any as paid Green market going some continued experienced one the From particularly to. don't Street other. have of weighted on earlier and that or one I the

it into properties would folks of who looking and sales of I asset to be out move mean other a smaller less bit incrementally, might ones. think, from then little trade

transactions. to factor to On tool still ability think and excuse used a and me, the kit that -- years. an of the unit the quite And though, deals whole tax-deferred a I do OP have have bit tool, do us that interest a we is offsetting that's which is over

before. to gives may so able execute been some potentially to have opportunity us to think an transactions be And that that available on not us I

activity, while on X% usually, front, business. huge it's of our portfolio. disposition do the we It's part of the do, on X% a And not disposition a year or average,

But particularly with change in. the So probably a all dramatic change political anything market really in a more wash seeing in seen landscape. that's little bit the a different of transaction or haven't

John Kim

or what is million Okay. there on under intent. any yield stage? is you And remind type Chris, closing $XX have us you you on then of assets? success goes of transactions rate letters these on mentioned, when Can into typical it assets that on you commentary provide property expectations just could your And

Christopher Czarnecki

Sure.

few a there's think things. I So

Our bit. always execution. thoughtful same or structuring contract do and ultimate a general from team, an review by little things a and is that success rate usually diligence quite there's the our very LOI high change to time, push occasionally At

that of underwriting, the really stand general, has about behind want going we offer and the that So forward team think such really to one I is always a a to lot that's acquisitions caution. we've think with in the work of of LOIs that But done I our really, lot upfront and something do done well. ways

So I think degree translates high LOIs. to with into pretty closures that of a respect

little we property I rate. terms In that of retail. and a million that reside of would you see blend are things X% on And that's today into the industrial, niche it's would high $XX contract, of tell of mix under health good LOIs that things cap cash in our -- assets, $XX sort about of still those and bit existing QSR where care our under a our today. the million the control initial under

with very over built consistent portfolio that So the our X we've last years.

an are perspective think complementary before. we've I consistent to employed and these the assets. seamless be with from strategy integration bought that fit and what we've the They should very portfolio very

John Kim

you And X them If CapEx of rather final But upcoming on for it about do just or high managing strategy disposition is you how me or an the more one included forward? retenant is your you was can the sell to your They vacancy question portfolio? about vacancy, see going MOB. Ryan assets. think preference then I think And in an Okay. or talk a strategy the current dispositions. at just mentioned asset vacant than

Christopher Czarnecki

Yes, absolutely.

another issue. re-lease I Art dependent. just the did Van think as vacant And no of it's relatively talked asset-by-asset we Ryan this week one sites about, with

on each move forward that MOB leasing The sales I one with strategies one we the both had component to sale ultimately was And think it. vacant worked we'd one so take strategies individually. and and of we had decided

the So and is we by the MOBs piece a of amount look outcome And plus we of based towards for those again, assets. during it Tractor re-leasing the other take the piece best quarter each did Supply. what also reasonable on

it very so and relative manageable thing maturities X think with much So their on very are we're we near-term depends to years that rents, lease out the great I is and market just on are we thinking And we to tenant the and where process, have little desire a where always coming, stay. it's front.

So...

John Kim

asset upcoming have CapEx I in about realize re-leasing you very think industrial? little and certain a expirations. But should particularly MOBs to we like extent, office classes and, rising, lesser

Christopher Czarnecki

I re-leased that guide The exposure or were almost and then CapEx have towards. anything fairly nothing. care don't nominal, there health specific increases, we other the CapEx any to didn't assets think ones any

based for if know I upon classes the don't So on any heavy to what guide seeing anything asset particular today. there's particular CapEx towards we're of

Operator

Our from Morgan Vikram is from Malhotra next Stanley. question

Vikram Malhotra

acquisition. to going just back the Just -- maybe

sort give that wondering, XQ 'XX? just of picture, funnel, closure kind maybe like just the of better bigger we of sort rate us about sense pipeline, of talked sense look the can just you're I'm sort the rate. the to a of so you start of get what could You into run heading broader the composition, set a considering the

Christopher Czarnecki

Sure. Absolutely, Vikram.

pipeline their we've volumes acquisitions to years. our we've previous moved consistent think as I fairly and the thought move about into has started team and seen state, actionable with forward as So an being

IPO begin looked we've about closings. from into and sourcing, proceeds, perspective able with obviously So team -- at billion. that underwritten. an believe been from And and been then of we've I The run forward to rate to the now year, move this a thought north $XX acquisition has acquisition

large maybe year years. like historical working our transactions, executing pretty assuming seeing more we market, different And feels so and the feel past the excluding averages from hold, number with we're we the but or pipeline to where what in line over view, we're the a robust. the historical in be XXXX, that levels market conditions current on historical can above of And of in X XXXX opportunities, close

about and set, QX, be we're broader based that's about our we're XXXX scaled so headed it opportunity to on were which we're of Again, to the the -- but feel active on how generally exceed And for projections IPO good where really today. whatnot out track thinking for and the there. pipeline coming from

Vikram Malhotra

where Okay. That's the final are the just in result. are on and as next -- And what you maybe retail economy, takes given obviously, the it months? But today can kind puts then COVID restaurant sectors, terms just the with now right there's the us over few -- in you helpful. and of give where especially with we we do the election and you of the occupancy see

Christopher Czarnecki

Sure.

we're prepared our casual Most on well have it portfolio, tenants. things which has focused held that pay think national and sales casual of said across kind that on been remarks, I dining strong to the I very there, even to of some of declines industry. the you've hit the attention our and close closely during experienced with entire some has up continue corporate dining operators

that little is our more credit we're surety there paying but does a us attention strength certainly to. behind close and one give it So that operators, additional bit

months. side the about year-over-year since that expectations, has basis. well in and Our component, QSR side. consistent lot nice seen people speaking certainly generally, fairly food of way. performed And able with industrial not packaged businesses the more bounce and of cold defer elective been is care Again, showing and then our Where they've is procedures, and our portfolio levels at also their in industrial to a a line performed strength back is health good on of to businesses it, health several the component they've have have were of XX% sides as been the a storage care, relatively goods last only processing, over weighted, the high

different feel are to expect. difficult you'd the caution space that because we predict. from We thing leased in see always reasons is occupancy of But and XX% a So level the all zone. perspective high restaurant where -- about the winter good around the a months of

So...

Vikram Malhotra

one model Great. of us for, into G&A. 'XX. what maybe the of costs sort may into sort maybe rate Just Okay. rate of may on carry looking run Can the 'XX and away? you as last what run just what's good heading we of sort then on sort And go things out, remind

Christopher Czarnecki

Absolutely, Vikram. going that kick about to to Ryan I'm it for to you. talk

Ryan Albano

terms that costs in that of whatnot. in additional of in comp, Vikram, being it remarks, give say right to thinking now Sure. some of thoughts, previous a is public kind have G&A in we I run our G&A in runway somewhere little we're bit the I'd way with my -- say have of quarter. company excluding a of seen per rate, kind of uptick line our $X related run mentioned stock-based which and of rate or take, is, about million, I'd as

Operator

Paolone JPMorgan. next question Anthony Our from is from

Anthony Paolone

your sounds it and like a what pretty number too. peers robust to comparable So are more pipelines deal become saying, your of

just So who existing more folks that leases seeing selling? are these you are Are sellers? wondering, the are leasebacks? more Or like net sale

Christopher Czarnecki

that. Yes. you Good question, Tony. for Thank

underlying for year from. same addition robust pipeline think portfolio, we number And earlier we source you show, having and matches QX sourcing road I when through that we talking highlighted on to the this been honestly, a in we've those think channels of sort our and channels XXXX. I of into a number of a talking were guys with

with have long developers we with. transactions that so going And we've relationships certain had

through with or transactions well. X obviously transactions X sale-leaseback and have the few well looking as as we're a maybe and then tenants at broader there market We existing doing working additional actually

a number, we then XXXX And continuing our the while into few as own invest have And not during we a for remarks, through in there. opportunities, alluded highlighted, huge QX to assets to prepared and improvements. tenant I

bring different of our number executing funnel really pipeline. on we're broad a to opportunities the into So

boxes all in the earlier sort of about we the So of things checking talked we're fall.

Anthony Paolone

existing. leasebacks or Is more like bit as to towards what sounds new It see? opposed skewed Okay. you sale leases buying that a an

Christopher Czarnecki

-- -- as it's sale-leasebacks a I but There's the between few moment. and at balance few it's double-check a a existing could think think well. I leases X I least it, pretty it's the at

So it's a just mix.

Anthony Paolone

then the... Okay. Got And it.

Christopher Czarnecki

a Or leases existing of for expansions existing me, excuse tenants, lease. master well, grouping as so into more

Anthony Paolone

moving Got with of had over we how based target of should then same that Or it's discussion Vikram? maybe the sort tenants last the group of on that few next that occupancy X And Okay. think or is bit point a it. the quarters? a noncollections, not you because about of

Christopher Czarnecki

for else target. It's one Yes. then of little is you'd bit has amount left small don't is know, and there? who last Ryan, The deferred more partial a a in simply there moving there tenant I throw rent anything October.

Ryan Albano

don't think in it's I I we're what No, remain to would so. and, continues think with strong line overall, right I strong, I say been mean that today. seeing

Anthony Paolone

And Okay. question, million forward. as added last about on run capital that? what $X.X should a NOI how just And roll think matter? was run with that rate The then the that we back to improvement/reserves, rate you

Christopher Czarnecki

I'll for Yes. that. it to kick Ryan

Ryan Albano

of the as capital they to you of an period it the The of say during reserve during AFFO, would impact to X.X, see balance that AFFO. that's We no sort one to a And XXXX. is little to to X, to fund item there cumulative historically every I'd bit net-net it this was onetime relates or line number there amount a that really a tenant-funded since that top of item, better, sort that liability. there today was AFFO since amount this reclassified sheet given was XXXX. is period. offset What it describe period to Sure. sort the

need modeling something forward not from about think going perspective. overall, a So that to it's we

Anthony Paolone

Okay.

So up -- statement, it up I where on or the was income in was revenue in it up was it guess? -- it was in

Ryan Albano

had since recorded Historically, we offset to period, to XXXX, revenue each Yes. it AFFO. with an

way. the along impact AFFO no So

as balance the corresponding on line sheet to reclassified that cumulative reclassified to this from liability top offset amount well. a and AFFO the we a we quarter, it had As

no impact AFFO this period to either. again, So

Operator

Kim Truist. Bin question is Ki next from Our from

Ki Bin Kim

Can curious obviously. you you what if is you want your looking of type a to capital, details more just I'm yields, little deploy like strategy? and that what markets type talk acquisition still on you where about can industrial at assets, and bit of provide some predominantly if are the

Christopher Czarnecki

Sure.

and during worth a of we're industrial, IPO. industrial gateway for think lot talked our it's you for say, for sort always assets about focused I'd to market or, the X secondary million obviously of relative So facilities reiterating very markets the But facilities. or slightly us, more big and what might smaller on square foot distribution coastal

broken So about and in flex today and space our storage cold me. some is processing food the X/X manufacturing, remainder portfolio roughly down excuse -- R&D flex and X/X in distribution space, and in

Our square average about XXX,XXX is feet. asset size

that of actually, different Wisconsin X within zone a largest those and a there. range to cap good property markets, of couple we'll the today in closed, mid- get today. in we that give high regard, midsized more but fairly there's we're assets. say include and And secondary industrial reasonable looking more Phoenix, markets still opportunities markets. markets on mix -- Some And for you and of we're Chicago industrial sourcing there types There's I'd rates similar more that then our actually secondary include details. finding I so our at obviously, some is think bigger once Dallas a And what

Ki Bin Kim

level right you're reserve the carrying that speaking, now? Okay. And what generally is

Christopher Czarnecki

that pass but good to one I'll Sure. Ryan, question.

Ryan Albano

that level, about at into And I think at look there things looking playing typically are reserve as bps. we it. XX We're X Sure.

related see on, of in we've think I that just side environment think that. of But and to inside having the uncertainty cases of so the other that. number historically, the operated I uptick given and could recently we of the some an

I makes today, at or looking So me. XX so generally bp assumption think a to sense

Ki Bin Kim

reversed. here. the already Okay. was if reserves last addressed you about And capital already sure but million $X.XX just Was -- not or the talk it, you improvements in of I'm that did call? quick one that

Ryan Albano

item this or was cumulative to impact sheet period. I That's previously earlier reclass the the had was for today, AFFO as no it describing as and Yes. liability the what amount the balance

Operator

Our from is Goldman next Sachs. Caitlin Burrows from question

Caitlin Burrows

talk I care? that just want target is cap types property now for front, could right like guess in competitive landscape industrial allows or continuing you you you to make acquisition the acquisitions on -- the just the health and rates about how favor at of what

Christopher Czarnecki

Sure.

built but a long think continued core competitive for strategy acquisition the I and of smaller secondary environment for focus building relationships with work It's brand some execute that -- is we've we've with that relationships and the long term existing it's us. time been developer as to of today, able and the and to secondary space. an And our And a on the markets competitive, then for also been asset over it's it's ability in tenants our some regard. industrial well. our then assets

a our see pricing. reputation, transactions variety feel we flow to criteria. And so and many competitive including and proven But of like on relationship the collection deal resilient, and them for our lot acquisition continue our our reasons, we execute be of has to of follow a certainly meet right to don't team we

to that it's grow one that's portion as we've successful on continue to very so been very portfolio our for of focused trying And been us.

Caitlin Burrows

you how more results. and pre Okay. And that during the -- restaurant could coverage report you or pandemic what includes time post of details of on if that often then get sales restaurant Xx, you sales rent frame on the Like give this? it's

Christopher Czarnecki

QX this through We from is of I the It four-wall high restaurant Sure. believe, end of at receive, reporting the point. portfolio. XX% XX% or it's

some the per But quarter it's end reporting after quarter have more folks may of through days second and or only year well. under quickly once that quarter whatnot. do we some even for the data XX or report it's quarterly some Now as might the into report third up-to-date than the most

Operator

Lucas Our Chris One. from question Capital next is from

Christopher Lucas

Chris, just side. on the investment

basis if industrial business now properties could less you're of the across things you from maybe you rank are comfort opportunity of where risk-adjusted to your order But about attractive the interested focus sort You that and in. talked invest lot that for from where a lines is of sort kinds of you right of in. a different best level sort

Christopher Czarnecki

Yes. Absolutely.

a you held of So and a businesses where high have industrial, Those think, interest as I lot well. level spent. in obviously time is there's our of up said, that's

We Cap our there been of pipeline transactions feed large able new MOBs also do and of me, then That's say, their a on have pretty there's as few the that in a attractive -- We're there further. strong interest have health a be excuse and well. repeat with should so either in working secondarily system. health tenants with specialist there some X% some been I we've might grow off-campus in our that ones expanding And broader to range, well. smaller as care the working the we're but our on upper portfolio, care couple or existing rates groups transactions affiliated in the portfolio hospital groups health market. that regional physicians a is our -- component given verticals equally,

those And cap to rates and terms have so those us. lease been attractive

casual as really caution a is a of certainly times, there. level to restaurant the On the and business, not transact dining I've at said of side few looking

regular there's to with point spot is sale folks it's that opportunities. specialized, are a buyer probably existing but come market competitive a of add working more We lot large I'm That we're assets through a and are these and priced broader priced with a been we whatnot. a where on attractively leasebacks a excited not to know, be if portfolio, tends the very Those to where likely QSR on QSR or market lot opportunities. they a the of a not the few to smaller buyers basis.

X assets that a quite have have well -- reasonably or We've cap And things plus X have rate coming the pandemic. for then niche as been quarter. or been retail got during this generally X% priced Those attractively. been well our done minus

to those happy add but So massively. on margin, looking expand to not the that

little on So then industrial QSR, be retail. and top. I guess health the see of add niche don't incremental margin, And to pricing Very rank there. the order sense but making a care bit would up happy

Christopher Lucas

for I a questions sort Ryan. maybe couple just guess of of

collected Or other -- than, that well? issues? should pre sort the of guys timing? all thinking COVID issues as Just say, of you But there collection, rent rent? that credit related you XXX% for be for always timing on anything is mean have typical the I are were we to about getting to is

Ryan Albano

say, we've Yes. XX% XXX% XX.X%, of at rent. -- No. I'd been historically, that

how the in general think it's operated. -- been COVID that's dislocation That's the so of on, yes. that where historically I and So minus has historically portfolio

Christopher Lucas

Okay. the $X.X or G&A And guide. on you just did what this to total that G&A or trying sense the of give a quarter, as $XXX,XXX to million Can then what with saw cash the not third whether me be should you stated I the on tie so sort of rate either component of or previously out me the we -- -- what wanted that's maybe follow quarter? noncash in I'm if was I got cash with basis, run right, what -- G&A of in million help had you $X.X sort and up of kind the a I roughly. mean about comp, it cash just to

Ryan Albano

we give plus x -- the kind sort like. or comp. company, few Sure. say quarter stock mind feed G&A G&A moment million the that some so that as X the the insurance take, that to cash about operating XXXX I'd I'd a I things that say and the D&O minus, run increased component additional coming are on, a of it's of or think is or and things rate costs of of public $X right, at

I some the expenses I'd in $X see a as it I fair deal of on, of and going back on. continue that And to it. As we run get lead sort assessment we things But a T&E to about into about and lot so of or little uptick activity that's I forward. as think give think think take, -- rate million that, that think so

Operator

next Our is question Michael Gorman from BTIG. from

Michael Gorman

just acquisitions? office interested portfolio? what that What and looking about right potential part the you conversations as you're the of back office a now the we then having if you're how just -- then comments at having make go side your and conversations you're Chris, within the are talk question. thinking made how maybe some you the and or prior your in space response remarks to Can acquisition in with prepared on portfolio, you tenants you're the to in less

Christopher Czarnecki

Sure.

generally we've held is that time nature, this on So one suburban I view certainly long is in a frame. more as the cautious which of think more our things office benefit a of office, during

would We or along to, office for a say, have I be transactions might industrial and way included several office, whatnot. and with, a us facilities it's been say, where ourselves certain on differentiate sale leasebacks corporate there

whether like out long-term of have need where had us. the work, and other spot little office as ultimately, very our lot thought of that being on we a before in office with feel good for model on our regular today, leases hybrid that have exposure plus whether minus lot a still we've and to amount Not good office of we portfolio, some tenants the sit long-term we back tenants is same nationally of space a a our everybody model. about there's strong with basis. just all need but XX% bit, tenants or a And sorted conversations So there. conversations they they adopt the credit be But fully we to or we've

businesses And or we once commitments, people to XX-year so are going their want us behind to how operate surety us. this make XX- on for is more

been as just tenants that have good, out waiting of which to out making really credit, continuing said, collections -- and is shakes our itself so have shape, in just And over have see us, how that I how then shakes good there to been strong lot time. model and just it's see extra for a spending spending caution really and our portfolio sure and about that --

Michael Gorman

local given place process? the it portfolio playing obviously, collections what and local bigger about the and businesses? been focus issue a as Is of helpful. for with in regulations governments and for as are local role That's in making you of about putting And new opening governance how the think hasn't they're kind you see putting But you greater much occupancy. and people your how different increased up are an footprint differentiation think underwriting maybe responses we all much on in your investments,

Christopher Czarnecki

interesting an question. It's

component level, certificate of level, over state not time. imposed, states about. side have today it's have acquisition think need I a the the on be thought benefit but things where we in of our way do because or health spaces tenants, we've and us some last maybe opportunities say, have should not and would for and been But the certain always care local of another tenants say, the classes a restrictions on their might this, coming people on in how of impacts we're I future to months the the asset properties been out A whatnot. acquisitions, tenants. -- I where our we of visiting the started of better current sense -- make do when of hitting -- understanding have local X we we when reconfigured number

that So to is into benefit that us, sort these nice of QX acquisitions. a for have going

tenants just the cross whatnot. speak easy, ultimately, And when acquisitions, again, state about property industries, local And but really tremendous restrictions local like one not at types diversification it. I is thing and a that within level portfolio and of and I the exists the then, much, amongst or to amount our think about we components so future have of the Texas, portfolio it's

or of that concentration change of portfolio. So have those county-level there that a really those -- component feel to of don't even the a restrictions some state across whole changes, of any and shouldn't of if we municipality such we lot one within it some within magnitude, or a state-level really was

that's positive as mind in a well. So my

Michael Gorman

then one for just Great. maybe last me. And

you life property cold property pipeline or was include and sciences? about you're are -- that types, I that like expansion expansion was the the As that it, into think I types into missed pipeline, does pipeline new evaluating? any in the new if apologize into storage Any

Christopher Czarnecki

the No, QSR core specifically It's in care pipeline industrial, the and health mostly today. today. business not

So...

Operator

is Frank Lee question BMO. from next from Our

Tak-Sun Lee

we about the are initially ATM? should acquisitions cash, these Is expectation that LOI line under establishing versus How funded funding for the be with on think an now? deals the right will

Christopher Czarnecki

I'm Yes. that to Ryan Frank, but... going one, take let

Ryan Albano

of to here, Sure. the deploy. on significant cash say Yes. we're sheet sitting early with on -- our balance I'd ready a amount

just upsized the So put with to coming we acquisitions conjunction be that quarters $XXX with order. to say the we'll that revolver the whatnot should I'd that and over primarily funded the in first then in next and IPO use work million.

Tak-Sun Lee

earnings? are with And providing Great. Okay. what XQ current XXXX your guidance on thoughts then

Ryan Albano

Sure.

potential to in of looks pipeline what the little acquisitions sort about what both of next and a -- year. think to an today be, for of what do we've outlook I QX and the tried we're bit on up how the is shaping terms what give like thinking are

AFFO through for specific evaluate we're to move guess and, we if on year, next QX, we'll best guidance to now, what we forward, committing I of share continue best to As sort way make today our obviously for practices year as guidance look those next so and practices that. you're specifically AFFO are. not or about per asking right

Operator

would now back closing turn to Chris the to like over concludes session. conference the Czarnecki question-and-answer This I remarks. for

Christopher Czarnecki

both helping to much. at employees will make Thank diligent so their work again, you of successful. least and by, thank close so in continuing our Broadstone for I all investors our

are have great into the as to into year look everyone, our in sharing half and you through updates plan Thank and XXXX, growth with QX of the back first continue very excited a We and on the very much, very we much execute forward to afternoon weekend. to and all quarter. and appropriate,

Operator

has conference now presentation. concluded. today's attending The Thank for you

may You now disconnect.

Broadstone Net Lease (BNL) 6 Nov 202020 Q3 Earnings call transcript