BNL - Earnings call transcript Q1 2022 | Broadstone Net Lease, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to the Broadstone Net Lease's First Quarter 2022 earnings conference call. My name is Sam, and I will be your operator today. Please note that today's call is being recorded. I'll now turn the call over to Mike Caruso, Senior Vice President of Corporate Finance and Investor Relations of Broadstone. Mike, please go ahead.

Mike Caruso

thank Lease's for call. first and for us operator, Net Broadstone quarter you, you, joining everyone, today Thank XXXX earnings today's Financial hear Chris will John Moragne, our call, Chief available Officer, On Officer, for be Executive Q&A. Chief from Operating Czarnecki; Ryan Officer, our Chief will Albano; and our you

the for to December only forward-looking cause to year that would call subject to ended may are of over and to variety XX-K I statements begin, for such everyone SEC Chris now can XX, we differences. Form Chief our I Any a Officer, We not which of actual to the remind caution filings, due during as forward-looking the you this that refer to are factors reliance and discussion statements, Czarnecki. uncertainties differ call the of factors. Before risk place call. this conference including will to like Executive forward-looking that statements and our following a on date of cause the provided results presentation made XXXX, materially more our contains you detailed turn risks these undue

Christopher Czarnecki

welcome start first and pleased afternoon a with solid quarter operating I'm strong Good report to to of everyone. a XXXX results.

represented XX over a since estate we year including quarter the in volume, to start lease largest ago. several real BNL first firsts for acquisition began The strongest first quarter and of years net investing

facing positioned current to first, both I'd in touch will of provide has footprint completed diversified across how I markets several the details new of the and many navigate market the border, broader on very a all Net challenges space. we successfully the which has Additionally, first strategy to into of expanded just our Lease targeted on few our north milestones moments. us our acquisition Canada. environment these like further But uniquely attractive

XXXX. year The remains in market Net competitive. current a Lease during environment highly acquisition was what historic Following transaction

buyers, generally aggressively of as transactions. prices public substantial to continue held and private Asset Chase amounts have firm capital from

elevated volatility sustained months in and rates of year. the equity levels that Although new inflation, markets interest challenges first few of pose rising the in

navigate Our diversified this environment. positions to us flexibly dynamic strategy

investing cap to where lag cost quickly of changes approach adapt during diversified periods us changes allows to rates Our capital. in in

allocation are our We acquisition flow able expectations. of a evolving a our buy return adjusted that our to and ensure meet adjust box across capital to wider decisions of opportunities capital risk cost consistent

earnings still levels Granular defensive smaller acted provides ability growth meaningful In in relatively asset pandemic. producing selective, addition, base with of the modest COVID during the while as a remain acquisitions. hedge a to highly successfully diversification

will be in to today's diversification environment. prove offensive market Now advantage an

dynamics. to invested Acquisitions a weighted million first X.X%. retail leases of cap restaurants quarter the of respectively. attractive market lease QX consistent heavily highly a despite allocation weighted in more The XX% to During average a initial during opportunities, how X.X% pipeline rent first capital and strong $XXX XX%, towards completed we X.X%. and XX approach the our diversified Acquisitions completed creates escalations, annual average years, rate cash translating rate weighted of of term GAAP cap XX.X a quarter, solid properties into include and competitive at showcase during were continue and

core accounted acquisitions property closing We industrial all sourcing XX%. across While the and for to committed remain remaining verticals. our of

our composition levels we to portfolio portfolio of expect size the property vary the current the concentration stable, the by remain of overall our and composition pipeline. from While quarter-to-quarter, may existing type given

inaugural part growth that during opportunities of Capital the successful creatively helped equity as On offerings with markets transact us the allowed program to financing provide I'm in half us our bond side and quarter. to rates ATM execution QX during to detail on. high public issuance via fuel on coupled our on the pleased quality follow XXXX additional capital second of first accretive several

term a portfolio increased escalations translate that These to X.X% of qX, XX.X The lease space We're diversified we restaurants XX average we Since excited located upscale include during for nearly modestly and four national were and a invest lease quarter rent annual and sites The from two across the master concepts through rent average of located will sales years During a corridors the coverage separate operator the add to XX assets restaurant strong XX% of of of portfolio. weighted total transactions. a acquired years. weighted experience. XX and and with operating total of locations total have and XX rent to exposure ABR XX different over in across different $XXX to million. additional thoughtfully are exhibit attractive into retail in exposure to our metrics returning ratios. restaurant portfolio robust XX% restaurant to states,

has in Winnipeg, footprint milestone into our transaction expand premier are allowed Ottawa, markets to located a including separate urban Calgary, meaningfully targeted Canada, markets, and first $XX three Vancouver, quality master high include the total year Toronto. Canada's for during leading X.X%, us nine new annual This to leads The assets of The through transactions in which our average And We weighted opportunities escalations representing had select retail retail comprised of of retailer quality of of we'll leases quarter. scale. also own border These to continue Canada lease now total recreation term. portfolio in average seven acquisition that evaluate rent complement portfolio. a million assets XX.X high is in X.X% outdoor existing our of assets locations first gear. include transactions of retail the ADR. north portfolio six unaided We

million intended their attractive and rent facility for during assets Minneapolis. industrial footprint, largest a the for a to total and The quarter. of leases we the annual $XX X.X% lease leaseback is assets a of dedicated of Finally, transactions of of prepared XX% facility two and two escalations space, transactions production weighted XX.X XXX average acquired was storage a term manufacturing products. located to of small include average grade first cold The years. over sale weighted the site food food in

industrial remain of to million currently as such transaction under closed of With opportunities our continue been pipeline issue which year million unique prudent second XXX a and to return robust remain over distributors million. million specifically, continue would letter industrial assets is our our to these to a our Oklahoma We strong transactions, underwriting on wholesale off has start executed to select market a investing diversified least provides downtown We're materials what was to control, largest U.S. approach to current we've quarter risk or focused how have fit We standards acquisition $XX.X intensely have opportunities. intent. I and qX to allocation an a located industrial profile. one amidst portfolio within maintaining guidance confidence acquisition in acquisition market. capital our the assets, advantage will in on just challenging contract warehouse reiterate overall to that end of thrilled and committed in The of as the a transact and $XXX of environment. Property of $XXX failure industrial define City. during of of the we on of to prove the our like these both completed Since

of for the our with accounted no of rents commercial to with collected two but tenant end, as first exceptionally properties single were quarter, perform to of continues XXX portfolio and properties were more occupied a base an occupancy tenants ABR. XX.X% XXX% during subject all lease, XXX X.X% of quarter well Our of different than our

QX to any for the results as and capital Our portfolio has market our singular to current call weather provide Ryan? now been detail positioned recent activity event. additional our constructed deliberately I'll Ryan on credit tenant uniquely and to guidance XXXX. over XXXX turn

Ryan Albano

Thank you, good And afternoon Chris. everyone.

which acquisitions first was During the QX as generated approximately well this our share $X.XX represents in of we or driven during the cents million of quarter results growth and a closed as largely basis December XXXX $XX.X by XXXX, XX% over they AFFO per in AFFO completed first QX and quarter. acquisitions respectively. Growth share, on quarter QX X% late per

During of $X.X the quarter, total includes incurred expenses. million which G&A expenses we of million, $X.X G&A cash

million price total net sold of of per for $XXX.X we shares X.X sale at share common proceeds stock QX $XX.XX weighted a million. of average approximately During

quarter end, ATM to the approximately via was $XXX.X QX of help issued EBITDAre the during the adjusted of quarter-over-quarter. annualized capacity Equity net program. As ATM million debt our there X.Xx of our growth of ended basis, year. feel quarter remaining the leverage will remainder on with consistent We for objectives

of the the call, less target the capacity for other points to to portfolio acquisition we dollar XX BaaX margin stated to continue upsizing execute provided and provided second fund facility, also conservative of guidance for its the the based Canadian and on We to and BBB extending leverage compromising basis Xx. the on use credit without during our And leverage amended QX revolving $XXX integrity Canadian flexibly maturity applicable restated we a balance current acquisition March sub earnings of our equity our ratings. XXXX, foreign than As we a quarter. XXXX profile billion, navigate then to and $X which our liquidity date capacity and has million sheet to of limit the half I issuance first QX reducing our currency and borrowings,

$X.XX our results initial and million million share unchanged. our on XXXX million million, volume guidance million, unchanged. which AFFO based range, which per $XX the represents range growth XXXX, $XXX of our million total remains and an G&A over of year and reiterating cash And between For guidance rate dollars, is $X.XX, the This of key $XXX assumptions. fiscal $X.XX remains $XXX X.X% share. range remains between volume $XX guidance we Acquisition between implied and which in between following per which midpoint of $XX at unchanged. Disposition are full-year

markets the results reminder, acquisition, year are our timing of activity to As year. and a disposition, sensitive the per capital amount occurs both for and throughout share that the

Directors April at on X% held XX, declared This common of Finally, our before over and the $X.XX approximately July of represents an per increase or op of XX. Board on payable share a unit record dividend holders as dividend our rate. Meeting June XX, previous to

our on a quarterly for will closing basis. We future additional our Chris to board with to remarks. over that, increases With continue back it turn will dividend evaluate I to

Christopher Czarnecki

also that from far But XXXX. started have recognize we how our with complete. is work pleased I'm

are at coming the strategy our various portfolio on I to and of industry you for results will yield We external seeing believe and into both on to look shareholders carrying person exceptional remainder front. over the our in continue forward QX months XXXX of same-store of focused the the many growth that events. diversified momentum performance

of for be website. launch on lookout our the the Finally, new please

and functionality, is it of content of hope user very for Our a team some you This for useful prepared excited to degree pieces new stakeholders. higher all the line Operator, now unveil our concludes to can will prove questions. our with remarks. of open be

Operator

Chris. you, Thank

now will now John, Kim the Q&A We line with our Instructions] will your open. John line take begin first question is of [Operator session. from Capital Markets. We BMO the

Unidentified Analyst

kind portfolio? for of in then the new you in with It's expansion. key on of Hey, a What will bigger that afternoon. the Eric there forward, John. become guys, more Canadian market? good comfortable And part some going Maybe helps were Canada of the become maybe of assets terms sticking mix decisions the underwriting

Christopher Czarnecki

for the thanks Eric. Absolutely, question,

continued future to let going the of have really the simple than had was to nature a John little our space the the one sense. this one-off where portfolios in about active do along real, being just we bit I'll exceptional at I more scaled way and talk more might something even we asset various potentially talked have opportunity more that think a comfortable opportunity with But bit back little Canada, look at IPO that And activity. make could we retail the in about acquisition. we portfolio and got the the IPO a

lease and development, So location of really across as excuse markets, me. space the where master further sites settings premier Canada a infill really That it, and component, part looked able incredibly in brand, was limited strength of in the for we for an the solid some big very just rent the growth there's to attractive us. acquire XX bigger markets the the year lease, being was and across

lot so into was that went And a what it. of

we standard procedure. but individual regular was ratios coverage rent period low its and In a has strong very brand and going able the with sales to that a fairly the time. And it they've a just through what straightforward, group where business side very of ownership achieve and been relatively been in from here terms was to underwriting rent very dynamics loved the of short

us, tenant. be for in That we of quality and assets don't for we was their along felt portfolio the their the about build, opportunities location, these this, Cornerstone So, would one come given us where like what every these liked then day.

comfortable aperture of how the something got bit do And border. North a so that's we with the little expanding to

at As we've maybe the we're here, John hard but space go over you let tell And about our more it couple you at in look could with where Canadian last jump forward. took detailed, can going looked quarters. thinking again, a I'll board of this good the

John Moragne

competitive United through focus focus and should are the be in to able going in largest so Sure, they for competitors able aren't most now included then highly bid that differentiator us. do exciting as the leaseback our think Canada in this that expect we're in because vertical. maybe Canada, in Canada, same a little entirety on secondary which be there leaseback part said, was the where by is particular a in Canada that portfolio. to us thing a U.S. to invest the effort a going opportunity in differentiates so anyone don't from I diversified really should if the here in that being us same most would for a less I larger similar what's that don't where be of bit there those often But of in portfolio relative makes our assets And it able be the Canada, take of on that Canada. a strategy opportunities a may a others we're on States, Canadian many I expansion in opportunity is, tertiary the other to hopefully is the to We be the a active That geographic in the we're us think sale their well. some strategy where sale of large portfolio or competitive, portfolio way thinking natural to not we and with to ways, some exclude, already that think down, advantage same able about have others to markets we'll do markets diversified to

So to we're our underwriting. highly with explore looking take and expect to Canada, be slow to position to and methodical, there. not big we disciplined continued overnight we will a in approach it opportunities commitment maintaining a continue But diversified

Unidentified Analyst

terms switching appreciate similar that pretty pricing to a they of cap I then the Is rates, U.S. a border? and there for across between minute. kind delta of and Canada the are in

John Moragne

similar. Yes, they're very

versus you're rates of markets. some areas markets, secondary in transactions U.S. will this urban cap You're those looking urban particularly in to outside like cap consistent of those in of population opportunity centers similar with markets, the border along at outside the for But of largest sort are us the their concentration the there's terms Canada what of be in pretty their lower rates and the where large seeing

Unidentified Analyst

you right, it. Appreciate All guys. thank

John Moragne

Thank you.

Operator

Ronald line with your from Morgan Ronald, John. next you, the is Thank Kamdem open. of line question Stanley. is The

Unidentified Analyst

much. Thank you so

Ronald. have health, one you quick future? in Rosemary You on I behalf on had might tenant that can on and see -- your that you elaborate of you. near Thank the that headwinds tenants any might the see a portfolio's

Christopher Czarnecki

you. Thank Rosemary. Sure,

a a rent time multiple process, in granularly portfolio a collection very from at point, each our is most this obviously Generally, I PM we've this through and few indicator, been and and think pretty list of names on out few basis our our teams internal for our in that solid pretty real off. quarters for the at handful came just a the position us, annual tenants looking watch that just of year, quarter for review perspective lens. we've past and a and but been or has came steady credit an AM

today. So that might of inflation talk of topics can be any discussions to And that a we're perspective. you portfolio focused where nothing our our I'd aware and grow those were and continue It the and to are been they've that of we're sensitive we where some and particularly our to performance we're management on changes over given happening That a metrics material and side are sales able be from assets and are best overarching where they a to hasn't whatnot. obviously, about just from with of be guess where we of an tends talking those we risk or particularly just the really as sure generally where management but those pandemic, we say would be more about food result where focus time. how making But regularly, tenants, to of spending concern efforts the been the that's pressures perspective. might labor yet, all some where all seen the there,

Unidentified Analyst

Awesome, thank you so much.

Christopher Czarnecki

Thank you.

Operator

The is of Kim Rosemary. your you, next Thank Ki Bin open. question is Truist. from Ki, line

Unidentified Analyst

were Yes, [indiscernible] could if you strategy this was capital Bin. share you kind what I for for of on have the your Kyle thoughts Ki wondering release year.

Just there inputs give some where have the gone. of

Christopher Czarnecki

mind a got there, question? and Kyle, us. little quiet it was You thoughts quiet, repeat your would then for got repeating it just that you [indiscernible] it around

Unidentified Analyst

if about year, this yes, interest rates towards like and end what were just raise the guys those I'm Sorry, like? look of you talking that contemplating,

Christopher Czarnecki

that so Okay, would ahead. that debt what go potential look Please, like, Ryan raise and okay.

Ryan Albano

of debt Sure, we're contemplated opportunistic a move or in continue the point I and a so accomplished so and I that for available, out markets this the have from have how backup there of would we we've far, the options debt the do so year we we terms offering provided as as the that's have say our term more to that of of that to to seeing in not, revolver some need and think we into lot an would what and basis. permanent sort whether flexibility of now, right through be don't a year, volatility

we this don't and point, it's the clearly the bit choppy, in we've obviously At quite basis either have week. any markets points whatnot points However, need base seen now. expand XX XX down. right a rates And basis up, given

today where last guess of hard say that what that, rate I some and without as that did we're the anytime offering go be pursue growth is, size work there, bond So market positioned we well to would having need really any continue well objectives leverage revolver to to the our our increasing given I to our it's year, I the plus able as say to think soon. to is that in

Unidentified Analyst

you, guys Got sales, you guess, the assets whether okay. or there, just general your And, portfolio guidance, over or I could to detail pruning? dispositions that's switching of share more more just if curious strategic some on not

Christopher Czarnecki

Sure, that first quarter, front of the one casual that's and sold the the site approach consistent we've portfolio a restaurant restaurants few applying sort disposition on we over months. a XX during been past pruning Quick the -- dining casual to with dining Service

And would really guidance so either seek have And and master for bit our assets few contemplated our that the asset. disposition those initial contract. year, asset, and the leases also last QX. overall selling But there tighten a here. enhance QX to so late been as of sort through. of that round an that's late up we up office in guidance. the the flowing a is do then of a little year just under out guidance, locked that we we contemplated into in And negotiated or anticipate that That's we in And that's portfolio chunkier quality

Unidentified Analyst

guys. helpful. all end. that's Thanks, on you, That's I got my Got

Christopher Czarnecki

Thank you, Kyle.

Operator

Instructions] waiting [Operator registered do not There are questions our We Thank questions any you. this have time. no in queue. further at

remarks. the call to any management the closing hand team I'll back over So for

Christopher Czarnecki

our again We for NAREIT the Thank and you weeks look us had strong excited a other many to the quarter today. And you the Bye. coming events very and execute in pipeline. you. to quarter, soon. before, we you said as talk at really first I months. of in much seeing deliver to team We'll second continue Thank during forward is all joining to and

Operator

XXXX QX concludes the That call. you Thank for all participation. your Net earnings Broadstone conference Lease, Inc.

You may lines. now disconnect your

Broadstone Net Lease (BNL) 4 May 222022 Q1 Earnings call transcript