BNL - Earnings call transcript Q1 2024 | Broadstone Net Lease, Inc.

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Operator

Hello, and welcome to the Broadstone Net Lease's First Quarter 2024 Earnings Conference Call. My name is [ Bailey ], 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 Brent Maedl, Director of Corporate Finance and Investor Relations at Broadstone. Please go ahead.

Brent Maedl

Thank you, operator, and thank you, everyone, for joining us today for Broadstone Net Lease's First Quarter 2024 Earnings Call. will COO, remarks Kevin Ryan you Moragne; CEO, Fennell. call, and President Albano; today's hear from prepared John On and CFO, refer you caution this year uncertainties these questions and due of contain All that factors.We Q&A for differences. statements differ which not forward-looking following available materially our be to discussion including forward-looking cause and factors call.As undue to risks actual subject ended detailed of to cause and discussion your X variety the can the of a XXXX, to the our on reliance to Form you place to for XX, a for answers filings, a more such may risk are reminder, SEC statements that will portion XX-K the December results conference to Any date the the this as statements during forward-looking provided John. are call only made I'll of call call.With turn over that, of this

John Moragne

and morning, you, Thank good Brent, everyone.

largest like last proceeds generated fronts our the increasing perspectives am As provide healthcare announce our pleased in we'd ability of the execute the redeployment environment. we establishing portfolio in of I context year, share and discussed that our subsequent we for operating guidance update the on AFFO range dispositions both timing call $X.XX to during to line to questions, the scale for to are and of per this quarter, from early year a variable and guidance overall the establishing $X.XX.Before on our With was team's our sales. this the in opening

heavily had estate presented resulted has declines underwriting our net transaction and has in transaction and macroeconomic continuing and operational creatively relationships, last of environment differently while this also to effect think expertise. on and historically in particular to commercial February the interest real on in since opportunities existing the lean markets, net levels, emphasizing disciplined been significant impact have rate market.While has environment considerable we backdrop a lease the As year,

an have additional quarter our marketing XX% will this dispositions assets time negotiation XX% and we million.The continue accounts remain Our are we we our the Medical healthcare additional a have am to to disposition strategy. decisions what long-term identified remainder far at in the our part XX% an connection anticipate last in our accomplished as sale along with to additional XX. to approximately this extremely creation later assets make clinical experience portfolio optimal I capital, XX gross decisions assets take primed as growth. team and healthcare closing of of continue stages making of healthcare end make.With resolution Valley earnings XX to actions flexibility these forced has value not of completed achieve The have of likely XXXX. including clinically Center. and we that simplification the through our we generating work talent the want have assets of and proud of our simplification healthcare months we exposure effort, to And were March outcomes.As we environment, BNL, over final drive approximately Green XX ABR for in of we year, various Completed reduced part of concluding of $XXX.X oriented so provided us proceeds strategy, to successfully to after XX the with for disposition this of in

to at of naturally it our which our Our our similar healthcare exposure will emphasized portion point ABR, activity. our near-term become is portfolio, XX% less goal office.Turning below a to of reduce investment to

higher further industrial and and with a from X capital the to single constraints transitional closed disconnect. Steakhouse, end, individual we California million control. a investments tenants $XXX transaction currently subject rates.The with leading candy opportunities direct million stems above ground in an a remaining a strong campus portion The strong transaction manufacturer. opportunity And single build-to-suit. leads retail to our an million outparcel assets end on misalignment opportunity $XXX St. long-term provider traditional between relationship step Chick-fil-A, and our sellers, million rate year-to-date off capital currently we are team selectivity than million to capital, a $XX.X on LongHorn to regional a net quarter is in years, able estate persist.Despite including existing retail where with $XX.X a including by investment, few. fundamentals market concepts, unique transaction relationships, lease market million designed allocation tenant a consents.The portion focused was XX% most year-to-date national significant net the million highlighting at of commercial tenants environment entire lowest in to the exacerbating solutions a other market least navigated a Burger quarter triple challenging Bass X as we our located believe with triple as sourcing shortly Louis.This the tenant from the environment. environment off closed after highly volume of and transaction as occupied the This buyers with acquire existing a that through Shops, It includes for and real and required ongoing unique in that XX which center trafficked market were represented Pro unique of estate environment, We holistic million in more that seeking tenant first and net assets $XX developers to lease real is The this is cap covers in in assets, resulted the of quarter recently $XX the navigate we UNFI leveraging name sourcing center still we was continued King, leased. inline degree investments convert at reignited $XX can retail to investments was nearly capital $XXX the areas direct lending by trade able of under invest additional the deals investment after We one partner

on QX While a we provide on look investments earnings to until will of quarter, strategy, given perform first in details well these our what these we to occupancy We environment, quarter restaurant the sense other Valley the as and XX.X% discussing and the investors and quarter continued simplification second during to earnings.As increasingly defensive to And provide excluding it XXXX. we by we in working evidenced additional rent to QX. collections, weighted in wanted of closing transactions retail March healthcare QX more XX, detail particularly industrial forward proximity our and execute normally is portfolio composition wait XX.X% portfolio of this as in closing investments to overall Green tenants. are on

creative seeing that the interest an overall less net we where growth rate a highly event to and ways of net spectrum through that deal strong, potential which such lease risk pockets to ability deals. of rates this in and environment interest to may risk are lease operational generate we tenant environment maintain on are risk flow on be fueled portfolio reward situation a arise. historically the our financial in individual I longer transaction and results grown and in had appears limits construction, continuing post any REITs for diversified manage In for competence creative higher proven expertise could cap conditions due be But operating the need like our to of conducive credit that sector great and to view While our credit low GFC to remain as growth.In to any this, would to the balance run effect.We choose higher and risk the believe monitoring accustomed its impact will due world, type exchanged focus from finding remain our potential vigilant credit having of impact up our don't prudent the incremental broader of duration higher rate yield. the efforts to in a

while pullback, underwriting have the to down last the and XX to over on creative an discipline years. BNL time made that advantage position things lending the be take real to provider, and to Now of is successful double capital as BNL opportunistic the commercial estate alternative maintaining

balance strategy, funding I transactions sheet includes investment to expertise, but investments and part tenants BNL investing investors portfolio our and of compelling building believe and role opportunities. in our growth, as fundamentals, and in opportunities traditional of blocks and operational growth Solid a sustainable long-term build-to-suit and rent building existing view as a best-in-class diversified block development assets, focused additional industrial differentiated focused growth increased external growth, growth, types with we our development fixed these net We play presents lease mindset.With can to the to a core escalations, our which strategy. approach

these vary efforts, for earnings that, details will building will building based creation While they market our provide and the I'll blocks and combination on to a our the Ryan, path who additional value updates. turn provide over growth compelling growth.With medium-term near to call on of transaction conditions, and blocks portfolio

Ryan Albano

thank and today. us John, you, for Thanks, joining all,

the to ] add years.Additionally, improved XX on strategy rate strength million simplification of us a we lease a maturities dispositions X.X%. cap a the incremental high to XX.X sale medium-term of the assets position able piece through our proceeds sale portfolio we WALE in $XXX.X the [ dry These comprised investment a were of during for actively to execute pursue quality our first quarter, of portfolio As our reduced opportunities. our existing portfolio John from powder, healthcare mentioned, completion placing and and overall as key of

the XXXX As need transaction through timelines of the begin various utilization some we comfortably on we disposition risk. that combination and address extend shorter effort properties lease remaining space duration, into anticipate rates, elevated this credit identified, and to step given focusing

million, our on degree our new and the of funded rent In communicated we of have we And funding the UNFI tactical past, for generating I intently healthcare incremental sales no shareholders.Alongside million the track in and through development March of our XX. have during ] year.Now property John million. maximizing project and selectivity to and our execution towards expenditures for quarter, demonstrated fundings $XXX.X $XX.X attention first the disposition efforts, build-to-suit than the turning As delivery on activity. total, this capital investment $X once remains of focused high approximately [ of later revenue value we commencement October again unified development our are the

model portfolio opportunities opportunities compelling addition completed external access marketed solutions our selective these in allocating to run healthy efforts While in quality environment, for of comments. capital types opportunities and developments, which for and allow stable environment. highlighted remains considering contributions remain a escalations This of way to investments, of market sourcing high our embedded provide in-place a current by sourcing an can create periods, our difficult pipeline with given we standards resulted several John facing positive even for growth his transaction transactions where before We opportunities.While to to companies support historically today AFFO through of our situations more for yielded very as outcomes, new influx opportunities regular favor rate transaction forward to build-to-suit rent transactions.These growth profile has transactions, growth the evaluation from are coupled when differentiated sourced directly produce and disrupted other future or commitments that our in have robust formats us high growth opportunities.

lease our returns investments existing and is and our an balance our business market environment risk environment we opportunities our to building support our front drive growth assets to and development And focus blocks, near center.In creating core estate capacity in-place long-term constrained, meaningful, to our opportunities fixed underlying escalations.Moving medium-term remains Our investments arising other appropriate funding and and rent where confident fundamentals credits transaction for through in feel and its growth real addition leverage resolute. ability the in value toward and from the pricing best-in-class shareholders our prevailing in against adjusted on of portfolio. on model net is traditional achieving

notably will vacate end which proceedings, we later summer, a continue In the remains asset.Red quarter, discretionary spending, during to operator, we X.X% are attention Chapter home headlines. the of which XX recent to have is that one included the focused anticipate furnishings At of rent. last on accounting bankruptcy, highlighted this remain headlines. we this Lobster recent sensitive to industries the in optimal on been has continue tenant property. cautious occupying determining time next As team X.X% some ABR tenants our we occurring been in pay in step bankruptcy representing the for receiving RoomPlace, and of extra asset the for meantime, The that ABR including and consumer

and to healthy monitor maintain it level Our XX as the we performance, master assets situation site relatively lease unfolds. continue

when we last as June QX.Beyond that of Lobster space We had the conclusion of know underlying an a late properties anticipating negotiating future that the the taking property additional vacant compelling value and This our are are XX, the tenant is reduced cautiously which the vacating lease LOI received proposition its we Lobster's potential early represents be vacant possession we of Shutterfly, went tenant lease on over Red new remain in including have and Red comfortable executed our properties, about XX. these with process the upon interest exposure during several their the March expires or X one optimistic tenant, real with will and years, users.Lastly, term. tenants' a a significant quarter quality to there one other of have and only QX lease both estate in

executed already in LOI have of a negotiating this We the an new for lease tenant and the location. with process are

Our operating fourth continue resulting increasingly to and the the at quarter, and sustained is during currently environment for targeting objectives and new for ability assets that, risk demonstrate the the drive broader the enhance quarter. management lease market are I'll investments macroeconomic uncertainty downtime an summary, strong to to commencement minimal challenging, Despite Kevin of rates we property.In equation. new tenant on certainly interest on difficult to update call to diversified backdrop, highly our the turn results over higher adding is in capital a value performance.With the differentiated to portfolio our to provide that investments financial allocate and portfolio execute the

Kevin Fennell

Ryan. you, Thank

the into portfolio driven we we multi XXXX, healthcare proceeds on strategy.We approach rate disposition by Directors driven structure [ the quarter Xx than at RoomPlace. During existing end in of quarter XXXX.This increase of net share rent any and once semi-annual million $X.XX position of rate dividend is $XX largely slightly alternatives a July exposure strong We from million in per quarter's the increase better quarter, excluding our our of From basis the financial and a a approved of markets strength The before progress last as down leverage quarter. increase lower $XX at of $X.XX to our expenses. not an declared again routinely holders increase X.X% Green consecutive Bad in year. our rolling was is OP the common million unit. perspective, we Valley fixed $X.X X.X% tracks per G&A quarter over activity. swaps dividend a XX. we in largely over by our XX, capital in dividend fourth interest in points, At and ended And slightly the driven seventh since This a incremental marks with Results from year a cash line generated in in incurred by share, AFFO ] gap or quarter on results XX of were retain small Board simplification from debt IPO first a XXXX. ended in during in and a guidance.We payable the quarterly floating or quarter as June debt, quarter meeting, G&A flexible capital to which X.X% X.Xx debt position the XXXX for evaluate despite share in engaging from increase the of

volume and XXXX.Our million.With that, healthcare we on a we this revised will of and range and previously Our million, $XXX from objectives to majority. as simplification $XX in represents following between as million environment.Finally, the million substantial call share $X.XX assumptions the $XX execute $X.XX guidance per accounting both provides between $XXX mentioned, growth on share $XXX ability results million ongoing highly Investment healthcare market and our team's our to share sales guidance unchanged. reflects for million $XXX volume attractive now clarity raising our cash are covered finally, disposition for $X.XX and per G&A for to John with questions. dividend the a remains well estimated remain And per key strategy yield open which between portfolio additional

Operator

[Operator comes the Instructions] Our BTIG. of from from Gorman first question line today Michael

Michael Gorman

required innovative could a about if more you talk little bit wondering was and being about about innovative or after opportunities additional you I right opportunities you of the about talked center on the and you're you spend And And as the you the investment ended? you're time focusing kind the quarter bit Ryan, little John, thinking how as how of talking talked transactions your about returns about like of a retail skill set. think closed the -- seeing. Maybe about think build-to-suits environment stratifying you some that now?

John Moragne

Mike. Thanks,

As we were Conversion's are sort harder transaction marketed lot lowest think I XX right at volumes years. as of everyone talking a now. about we've least in knows, the seen the script these and

with far we some lease a from We're So on you're differentiated as seeing do a center, the the -- California.Building retail, good well Net years having industrial focused, mid-market that we to for acquired commercial of lot we're well a $XXX as seen the million but in right real ], UNFI we're able the direct we've as We're and about call post [ the got as now growth we to building deals and the straightway now last GFC.So [ relationships partner on result strategy relationships. core same find and it so seeing on Sansone close in are deals, opportunities disruption and leveraging that persists, that were will as retail The call, to build-to-suits on harder as right from touching industrial of the to direct year-to-date time. for ] to proud build-to-suits. work very our that well partner we X.X as It's that that our evaluating as relationships in the some the enjoy campus opportunity provide on think direct for opportunities of a persist is we finding in lending more deals. XX during commits. lot not environment that in Lease estate these talked years blocks

as provider, in now yields capital is step [ to ] are we the as ]. right we always up comfortable opportunity we're us an we've works yield, -- seeing but really that looking now really [Indiscernible]. alternative provider, a That in holistic and with able as we're There being think I been [ So said risk my you're solidly as not capital that certainly for today. it with attractive.The right an not during remarks. spectrum isn't something the something if comfortable run to that Xs is for that's

we're and So opportunities core think to acquisitions the sort those as adding building solidly blocks. there's build-to-suits both of in we and great as way well Xs the in regular

Michael Gorman

a total sits maybe goes to to as closer on but And of self-evident, kind build-to-suits give rent the a you in you assume John. business to take I the new get a I helpful, of where the it's That's the up. appetite sense of just just kind as guess, commencement UNFI, that on underway? that for Can appetite pipeline have percentage development of terms

John Moragne

to at the is appetite of UNFI for come end QX And now. or We're online strong a of there's Yes, the right really beginning really, expecting progressing QX. it. nicely

we that. before, it's latest, XX we believe earlier absolute date online of come than it commencement an about to talked rent at going but October the As has

up structure XX at commitment And a to core build-to-suits.And starts to ladder over to XX that look us think really into remaining opportunity additional the are months, to next investors we at. we blocks, to having is out to growth so, the at for there when building future build-to-suit look XX we attractive look our open as for the fund, our down winding

that we built-in one should think having don't growth online from able right those As be a provide that to you to larger the same build-to-suits, focus [ now. material next way our pipeline these it's investment the roll from across that industrial going in differentiated we're is know for do see us approach year to you -- ] key a to industry a you with build-to-suits.So, already come

those handful terms As percentage, a the few in about them of a pursuing that but coming pipeline, of not out, and a we're work them online are timeline. pretty it's significant of actively of and and excited all 'XX

Michael Gorman

so, me. clinics. properties but from in change you health And one Have real not in in I of last the on with the I'm the lot lately had tenor year-to-date. tone just healthcare with you're the a the are thinking space estate of how just curious, ] you obviously directly or headlines pharmacy month about [ Walmart the and having discussions space any investors seen space just maybe terms in of and the healthcare its it's healthcare specifically? know And last or good execution the comparable,

John Moragne

taking. that the Yes, the our that already We're for of you're the next last the roughly good allocation little have to of got of less XX% to that, in -- a I point near that's we're the And term it single-digit overall of -- are have our and so pleased when line would XX%. XX% in think goal The time. the then At And 'XX, healthcare the a close portfolio. XX% more becomes approach emphasized out a door. that to that below I ABR, we goal we the get plan second anticipate tone is XX%. very portion will naturally here.We've comfortable think people take half bit sight the with

nots. and really structured. haves in have There's are that think looking a lot well at healthcare I places it's of you're

be And getting sit that and an really of lot so, we're the complexity, plan, And looking strategic the in on on or places at to there ]. are we of to it is of excitement comfort class lot where on a executing of in [ of not next standpoint, can where asset healthcare about sector, continue and they're year excited growth that investor core our I executing sentiment depending rid doing course from struggling.And fits an well getting of there's And so, the then that the X. what long-term a strategy. rid we're terms think over

Operator

next Sachs. question Burrows Goldman from Caitlin of The today line the from comes

Caitlin Burrows

follow as one. last to that up a Just

So, you want how done -- rest healthcare what sell mentioned another of talks XX% the XX% about XX% to now you're to and is portfolio you and TBD. on in the in

you talk about a So or are versus closed differences little the bit expect talks more could you've between take will already in the that on? properties you longer that those

John Moragne

Sure.

evaluating that ones do that So care going right portfolio acquired the a market certain a larger take to one-off are that fit longer is now, viewed deals you're being were and ones public not transactions. likely They playbook owned are the or REITs to that we've the little portfolio health that. everything need a at for are them. deals. assets will fit as And looking private to if be the that institutions Larger on for not were

As acquiring the a since been there. of we've lot care our years history.So in XX-year there's XXXX, going to back health of earliest some that's XXXX, reminder, a operating

managers. focus are and sell just in And these so to optimal is we one-off last any asset good little that We're not outcomes. price, bit, disposition these transactions looking our at

for not to or with it effort that's buy need invest We asset where somebody little for one-off of dollars the a to have the on maybe rush through really a a look bit a plan them. to so going in going it those be into We're real tenant what operational some extension to individually, us takes our to And at attractive on estate if reposition of the business.And TI decision is strong work expertise. on it's get each basis, lease we we're do. to to

those, take it more a little work okay. So through to bit but that's time will

Caitlin Burrows

the happen for sales be those transaction in just asset would in single care expect a multiple? or that XXXX, additional And would to health you a expect you

John Moragne

stage would single one working on closings. currently it but have We're transaction,

would we of to a half of year. out the So it couple the over time different try second in tranches the of course

Caitlin Burrows

And mentioned that it then be just maybe take it but outlook You or I seems the land XX build-to-suit guess, if in land XX opportunities longer on approvals too. on of and to already get permitting. like would you follow-up those kind a impact, need months to have? the the could you

that [indiscernible] if kind have, you and impact what on the of So you what just about wondering talk you timing? could

John Moragne

not We're already spec purposes. the deals front place. acquire for at that are identified in already development identified. on with These No. the has land but where opportunities the [indiscernible] land been buying the We these are land are connection looking we're in deal, would funding end been and already

And risk see traditionally you in would industrial spec that so there's development. no of sort

Caitlin Burrows

takes industrial from to we're it able to just like that in there's time is more on side, you're a shovel able has getting talking somehow some set saying, process has actually -- the already else to going up it to worked the to ground. -- and partner it a this being happened put potential build from somebody it do So quickly? or or already on it seems like what like hear we Is

John Moragne

sort UNFI. XX capital last find we've to has lending months been No, scenario as for seeing of they a happened. starting in the of same The real where this the seeing Think in estate able already haven't the commercial process dislocation us be with you're in do already the can and the step they've to got but it, secured. the project to ready they land They've in we don't the have funding provide break got mind. ground, a funding. provider, but them need. with and permits they They're got They've

Operator

Mitch Securities. from next Germain line the question JMP comes from The of today

Mitch Germain

it development acquisitions, -- you broad dedicated do to have now of a these that set is are you skill John, the people [ team part ]? Or just of committed opportunities? is your

John Moragne

Yes.

-- we So leveraging and experience existing had expertise. we're

the build-to-suits number his career. of of acquisitions over head significant done course Our has a of

on this architect us period through able [ the UNFI a of construction staff. licensed strong of the structure as and and that with through provide time. XXXX, It's XX-year the continuing expertise. a during well grow to course in that And have come their over We really with retail got is build a we've the of in have working to handful team gone been ] sites as expertise

built of it's our types that into investment opportunities the of we're acquisitions and fabric seeing. the So very they're team, excited and about

Mitch Germain

give said I consistent for? mid-X% right maybe transactions the looking And acquiring asset little versus at take you be had what skew now. development that you or one of a yields these a area, with in bit Is think transactions similar higher or these could you're

John Moragne

the [ bumps becomes space sort regular from acquisitions what things long Runs There's straight-line that at of build-to-suits things way at the continue consistently place of ] a of of rent a industrial as the X%. yield a point, a is terms low cap lease are lot that X% X.XX%, that in in great X.X%, on handful with higher range, in gamut on the when a basis. start ]. in the the we X% these Mid-Xs as handful we're is see X% well range, a benefit rent bumps and blended looking cap [ you building really this above to to

cap about Xs. opportunities attractive these talking on in rates yields even line when really straight are you're the low So

Mitch Germain

Last from one me.

Or maybe of sales kind did expected in into education the properties XX% the where about come those market seeing XX%, of health extended referenced and Was You expectation? was? the XXXX. that demand the always of the marketing that care from

John Moragne

answer the think I So is both.

made through brought QX process portfolio call, and earnings the process process work a the talked I time in on it were of takes where the fall. during health care our process to point as the over the to announcement in the early the about -- get strategy about when to course we simplification we a and long February. run we our We that the summer, had started CBRE worked on JLL us with and with Board XXXX, in internally As

be the [indiscernible] able when went we that into we're really the XX% the stretch to we it. that market, looking we're XX% next we'd able little we half. more how time. on So the with But execute anticipated to an to fully out going execute to quickly strategy to as take came bit, be might be open were it and The we mind and a announced out going last first we to on to

So months started this talking about we when exactly it we a few thought this what ago. is was

Mitch Germain

quarter. Good

Operator

today next from Kim of Bin from Truist. Ki the The question comes line

Ki Bin Kim

to of on of to the rate the question assets Any health back XX% you care might going sell. sense cap look that Just additional the might be? last range what

John Moragne

to the half. Similar first

Ki Bin Kim

comments [ restaurants or worry today, to some kind see getting you do zone know the through retailers that started going are you impact that other I retailers And consumer the feeling. risk to that health of on about inflation went of might see a of more you certain and you perhaps your that be red closer list them? where but back ] about credit maybe to

John Moragne

are [ Consumer about are right list focus ones absolutely for casual of we've ones talked sort that dining, that our there ] that some else been about. are retailers at some an bit discretionary for be talking But we're industries here. top resiliency. list continues for And us still we little to a that wherever of like things the obvious it's concerned restaurants, now. The the about

coverage ratios still strong. Our are rent

to some to that saw and themselves well, think, The for You on gives corporate announce was X.X%, continues continue perform it of our retail pressures us stuff I basis, quarter restaurant assets. They more are well. experiencing lot a us this -- our but confidence. perform than generally a sites for

Ki Bin Kim

then early or of ton X.X% and basis next you And a indications have for lease don't year. year think, expirations points those renewal next of I year, Any probabilities tenants? XX type year this of this

John Moragne

pleased really we're aggregate XXX% rent we're it. on of year, On north this those. with basis, recapture an For

lease good assets that are some expirations. had below-market that So rolling

now, sight direct the as starting view absolute no to final it or on going are they of line work year we're -- those but Next until work right tenants to make up decision. to continue on

Operator

from next [Operator line today of Morgan Ronald Instructions] comes Stanley. The the from question Kamdem

Ronald Kamdem

Two quick ones.

what's a the guidance starting the ] timing trying the specific, more that of [ figure curious out contemplated ] assumption that debt raise number? what little interesting, at sort on Just bad forth but is in the sort [ Red to really change guidance on bad of bit Lobster redeployment did all? And debt about be to and and so

Kevin Fennell

of and the last revenue, But the hold can did year. which I'll cash John the XX take points we second. take part Kevin. well. that basis year It's throughout We the as with started we first year

basis or we'll rolls so as you And that, forward ] saw, quarter, the operating the and of as for update forward. [ rolls XX points quarter inside certainly the year

John Moragne

every And we've evaluate last quarter on and our anticipated in the They the Red the for portfolio it's Lobster point, we're bankruptcy. gone years. done haven't few through actually But certainly yet. monitoring that. single news, I it mean,

that of first times, When ABR. about to X.X% As of in XX handful X.X% today. it a XXXX, talked assets we position reduced we was exposure XX. that from initiated It's down we our

the Some growth of from in that's the portfolio. attrition

strong is got able [ of there. The portfolio. Some real being sell coverage the estate ] about us performing to estate, really from off.We've Xx it a across real that's well

Lobster if people even from of offer including going estate at standpoint, going and Red dollar to Lobster to our that cap ] these, the in restaurants it's we QX. just from we're But them. need rate With forward a looking mid-X on quality on and a able real at the $X.XX we be we're we the it basis, that to one operate sold get to think Red of [ door, out in that investment the the

to it plenty our money expect our in So though, there's be the we for that back us future. much business money opportunity going making the take into get out.We're to back here out of just of doesn't and

strong jobs not strong continental see in historical where opportunity over a to casual to this United to dining to about they'll someone's handful we're States, said a brand, I've and with manage it. XX, even of with goes, able performance, have good if times, be the [indiscernible] real the take it As be and to able goes here be and optimistic cautiously strong estate, a it able Chapter to something through going do

where and say good cautious feel -- about headed. should we're about I So, optimistic we're I

Ronald Kamdem

chunk a simplification, so it done, the on then of portfolio big got obviously, And nicely done.

With you'll -- do the of potentially? the little line a could or you the by of do the or sort be year you where XX% of of move end bit have in slip feel enough that does below sight sort timing rates, like

John Moragne

below we'll Yes. be XX% of end by the the confident We're pretty year.

headed, XX%, With line confidence. through And of time good lot having sight where think work then we'll individual we that's that then with there the XX%, gives basis, rest can it. the confidently. a as get the a next of pretty And take we on us rest portfolio of a our we to of the

with often not pushing them the out outcomes sort and of said, just focus is we As there disposition of truck. back the

Operator

The next a follow-up is Burrows question Goldman question from Caitlin Sachs. from

Caitlin Burrows

it I but if know a second for seems like a -- -- in quarter wording bit talk don't about of wondering of came strategy I something could the for you terms deal the if is you're invested be I the different call, of It was little you more release might that be? kind acquired. to how press retail suggesting just this in think, also than or kind unique rather the something

that could how we'll you'd the of kind like and that's doing like of? So then the to be you're outparcels invested more property, came it generally be just leasing center. keeping about the seems you in interested if be talk But of rest something and in that retail ground

John Moragne

Yes.

one is this excited that really we're So about.

I can we market post going rely it's think we said remarks, not fueled the this. on I interest for years that the GFC. Lease during to great REITs, my creativity prepared low to in example XX saw of growth think a able that like I rate show be Net a as we're

partnered commercial feet.So to lending start us And have this partner operational has on estate relying to it. both constructed and creative opportunity Sansone estate on have into We finding a Sansone retail us. been our for it with solutions. real is this provided expertise, direct is relationships, expertise, on jumping They XX UNFI. this. the brought years, that managing opportunity pullback in with initially also real direct location We we're that was

LongHorn really capital shift looking into my as I quality solution.So There's ground transitional X to Caitlin, that to Shops, cap time have were have or solution to And happy other needed you do. well, names to capital that And there we at Steakhouse, in harvest that and Bass ton some current, but make a provided we're wasn't current So they portfolio. in to where able Pro needed where so to manage -- are we a LPs. that, confidence capital creative position do I distributions the funds prior we in and huge so.And the value, something to in closed-end this. gap ability to we've of above to and tranche this roll provide unique had some of have X a -- a sources a holistic those a over One specially, we this It's work their tranches. The the they fund and opportunity mean the lease. King, rates, we retail can the went a were average we're acquired is as we a to and owner ton step really, mentioned to the add excuse from do real and sites in Chick-fil-A, site. else that into in current Burger estate remarks, fill me, to lending not owner, to alluded commercial really really

You work with got tenants on that. to the

activity. that similar lease-up long-term other look second there that historical lows and on creative so There a for find great on that need and we extensions traditional of So converting to sense time that allocate transaction transitional We're you're an people need likely see seeing shape, lease tranche a a there's capital done. to This to one site, situations. X-year been to is out a this where some has be partner. that us permit are they lease where have It's already to the owner.Sansone opportunity as X- environment period. in goes. is some And over leased great then XX% net hold it's activity that in in

We'll to may we'll happily opportunities the that one-off be pursue, unique at we look what This so And it us. these. that brings have something we be just opportunity wait see and and a may do that again.

Caitlin Burrows

picture industrial guess, good just have similarly the like acquisition maybe and for industrial you mid-X% then on seem deal, And does really good. sounds a to like in That outcome guys. the range I rates cap bigger for retail

give the if is Yes, guys? you kinds And anything of color for you sourced how there year? what what retail could could the again, property else anything for any over else you on on made it, to expect additional you of you on kind incremental you the achieve So how unique just yields like other to side, there's rest those add said the it industrial that? of

John Moragne

Yes.

would an ease we So internally more brought because a us personal ability in big working provide have on were a to that the -- campus an of future. to someone they from was It of sourced on. cut sourced the was the check very with But it. California. that in We're again, a looking were that surety detail closing, We'll acquisition solution they execution and holistic it's industrial for that provide that deal directly opportunity relationship. industrial and for an pleased

continuing cap to now.Going other mid-market good your X% we see question, of in X% the opportunities, range. You're in that. to part [ into take those, really We're industrial [ excited the some cap so is about ] range feels on else. ] good everybody right future, that the That are

public from mid-cap If now industrial. like they private REIT right lot of institutional you look pursuing at as what buyers, really as a well people buyers are

right to lose Conversions not so make why going the ones those off-market And discipline. them, critical now. So direct the relationships, the that's are really relationships lose exercise right harder continue we the we we are place now. to can if are anymore. and the that's find But going opportunities and okay. right and right to strong if risk those We're competitive.We're to sense chase doesn't a highly where reward them,

on those, and laddering brokers, and a blast going going to on e-mail right are focus If building transactions things is just you're center the the by out be working in our creative the that working build-to-suit lot of pipeline retail on out over the is bidding up that's the here.So next bit of little off build trying and to hard the working for opportunities pretty where pipeline on like showing now. that

Operator

BMO from The next of from question today Markets. line Eric comes Capital the Borden

Eric Borden

on of development kind laddering for around Just that opportunities, the are comes outlay capital NOI then the just point you potential delay you online between guys? last given how guys the thinking about the when that and

John Moragne

Yes, there's there. a balance

I have think to strategy, really new growth it's attractive differentiated it you with current balance but a paying opportunities. from rent

we want time. the to spend quarter the the time pro things that of is first for that on One forma this included leverage we

X.X. already get are X.X. at levered the But We on position sitting you forma down coming you online, a UNFI to low way when pro in that

So important. between able over I capitalized online.So room got time, to being lot There is but we a we've of interest. are there, things with ladder as these some funding benefit balance a benefit they think, come the these is them, it when current is but is real

bit be a a huge If out, you've hope difficult. big, and way them nothing in consistent that then you've that we need to little to it attractive a basis, got gets capital. the allocate online prove to is which starts that have, we between, in more coming got really balloons But more if these

Eric Borden

peers of That's helpful. of success the financing have in your traditional then sale market. transactions, some net had outside lease leaseback And

hear what potential if of your to you're that and curious you Just kind thoughts a guys grow is around externally? to solution seeing for today

John Moragne

the they're going is not have forward, of capital We're Do Yes, acquisition capital, a thing than alternative they're But company key interested got there's there still on? if sale access why it to growth they've some a an structure necessarily that in was. about they us it's it? confident one sale working for feel leaseback solving market. problem limited leasebacks to limited and more Is that we're that objective? evaluating. The so sources not now we the really turning if it's is pursuing

and really into evaluate a pretty they -- seeking. they're that there's is for purpose the lot driving that them needing now, leasebacks online think absolutely not necessarily the the that ] they that they're point, hone come why and same but what we'll so used I of sale what's are coffers they're to, way in when the funds cash full [ of right corporate

Operator

from of line The Street. Allaway question Instructions] today comes [Operator from Spenser next the Green

Spenser Allaway

question. Maybe picture a just bigger

by the into given capital new more if on further disposition leverage capital shares, at regarding that's being perhaps how right powder bringing until has improves? buying changed, cautious redeploying of market or thinking provided your the sitting investments that signal versus all, of Just cost down cost back dry proceeds the now, just

John Moragne

Yes.

allocate job capital advantageously So is to our possible.

in that Spenser, And ones that the thinking are alternatives the the all great leverage front from evaluating out, of you always set we're spot ones we're a We're a right in so really standpoint. now that about. And are us.

makes isn't at some yield It's share looked evaluate repurchases, relative necessarily some we cash where debt. in we our get currently toolkit that and a the X%. the can have down that The implied in it shares relative north rate health have we proceeds powder opportunities sales.But basis have it conversation. something where additional sales, an the are new interesting straight fact what for the trading are attractive, we'll to dry we fact have particularly care from an additional on a debt our of about we'll that we take So investing cap line But reason. we that sits given health that given position, that the care to levered low think and from if a paying in currently you tool

capital evaluate most possible. we'll to that advantageous something make and it's the So allocating we're that sure place

Operator

questions [Operator time. Instructions] There this were at waiting no additional

call pass to Moragne closing to over So any I would remarks. John for the back like

John Moragne

believe a have forward confidence thanks, We so we with the execution Thank the the upcoming day. conviction season. you I where year. at you, year and great we're conference the all, that hope it we've us look and and of Thanks had can today. about more have headed rest the the this for and of course hear joining and the to everybody, talking over we far you

Operator

Thank This all concludes call. conference you today's for participation. your

your disconnect lines. now may You

Broadstone Net Lease (BNL) 2 May 242024 Q1 Earnings call transcript