BNL - Earnings call transcript Q3 2024 | Broadstone Net Lease, Inc.

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Operator

Hello, and welcome to the Broadstone Net Lease Third Quarter 2024 Earnings Conference Call. My name is Carla, and I will be your operator today. Please note that today's call is being recorded. I will now turn the call over to Brent Maedl, Director of Corporate Finance and Investor Relations at Broadstone to begin. Brent, please go ahead.

Brent Maedl

joining Earnings for Call. for Third Net everyone, XXXX Quarter you, us Broadstone today Lease's Thank Albano; Fennell. On remarks Moragne; Ryan from call, CEO, CFO, today's you John President will and hear prepared and Kevin COO, this All X for available will call. portion the Q&A be of

provided As filings, can you that and to not cause this to to to factors detailed materially contain following actual your only are our to call. for our of conference SEC risks a discussion a are reliance of XX, on discussion including may and December undue statements due factors. cause place year date you statements results to call XXXX, that more subject the during We variety for of and as a the this questions statements made ended reminder, such risk XX-K the forward-looking answers forward-looking differences. the Form uncertainties forward-looking caution of that Any differ these refer

With call that, over I'll to John. turn the

John Moragne

you, through in assets; for We per goals: retail our and future restaurant and industrial, building reposition XXXX to care second, growth to share first, with foundation our X portfolio blocks. main on Thank morning, clinical and strategy, through began focusing core good and simplification place our AFFO health the strategy and put our everyone. attractive Brent, sustainable differentiated

performance proud made to we in and to progress are have have baseline a forward date, for I and to we say accomplished that B&L's setting particularly last believe am looking the now With both this XXXX. substantially in quarter, growth new we

simplification care our clinical Starting strategy. health with

exposure assets health below we October our X, health X% successfully closed most our of With to exposure sales the tranche on clinical the assets completion approximately comprising that ABR. of but to reduced care our XX total importantly, brought clinical XX%, of care latest

remaining a efforts. home assets not of assets of and portfolio generally in health have are that our current services, exposure but office of not clinical science of our remain front our life the that include medical total will Selling relatively X% surgical us, now medical disposition much continue be immaterial. retail X% for and a a focus to broader animal as is clinical, and traditional our will focus and The MedTailor our center will the assets goal

maximize dispositions of the In elevated or transaction given credit will those the time into order assets, that extend anticipate to duration, some address comfortably value clinical shorter have risk. rates to utilization we various for and lines combination XXXX space lease remaining beyond, need

down, in per AFFO for a of health blocks, heightened development on focus clinical the laddered of to attractive year-long effort our share we a build-to-suit our building strategy a and long-term through growth the dispositions and place able to core care differentiated devote attractive tenet and which With foundation put resources winding is have key more been to sustainable pipeline projects.

this We in benefits considerable this quarter. ways saw the multiple of strategy

all schedule an a project initial rent annual budget, and yield straight-line by of and was X.X%, cash that drive to parties. escalations X.X%. Florida yield completion brand-new we square is September. strategically located earnings base now development million with on our food early foot Sarasota, distribution build-to-suit and substantial UNFI our reached high-quality This in in First, to operational contributing Tri-Climate XX-year thanks lease ahead of term execution asset X solid a X.X% The of below

to and Sandstone, all UNFI, are and development excited this success. build-to-suit this partner, that the parties about are We a grateful our incredibly project of made

mid- straight-line and cash estimated we yields the to success end, range total pipeline to in expect developments and an laddered sustained attractive weeks. on close committed funding laying necessary coming groundwork high Second, of the our our $XXX with yields currently in with committed long-term X% began million development strategy. the in build-to-suit to and $XXX and million rest initial we We Subsequent the have for continued X funding in exceeding begin approximately and closed quarter cost X%. of initial

on pipeline to overruns. all of for this with development more. that the core differentiated of build-to-suit associated proud deepening team's direct These projects execute with mitigate delays opportunity Maybe for provide to risk construction are our all, in building extremely growth. I'm are build of relationships and and relationships traditional leveraging identified should cost block we best structures ample to existing our further this ability and tenants place

secure creative brings Our that development execution, They and of that expertise willingness help found grow deep them projects their partners need businesses. BNL. and and be surety someone have a to experience and in

denominator, attractive this so needle size does for aggregate the our strategic the initiative the our in scale that long-term comprising and moves differentiated and a of way drives individual growth With value. build-to-suits

actively out this round $XX come that XXXX in will ABR seeking growth first opportunities build-to-suit we of with existing for XXXX. well Just the pipeline, already online secured XXXX are as our have XXXX half of approximately to ABR additional incremental million and as targeted and QX into

acquisitions from While this transaction inorganic long-term million focused add predict will can to and we approximately through will pipeline can relies growth build-to-suit block. the net period but you differentiated what do a growth XXXX model look of in market, during today, the drive we ABR like we No through exists way lease one tell BNL's are having regular as the or it net on market traditional seeking core to today. lease anything our QX else, that in of $XX this minimum time that strategy without XXXX, building

more and maintain project leverage We're doing to below comfortably BNL, Xx. reaches added able be ratio ABR our come. at things the differently here and excited we rent couldn't with And new substantial completion each what's to incremental we're commences, about as

eye operationally. our have also We on future the

points team to prior early Our re-leasing expiration. asset management engaging XX as as emphasizes touch lease in months

with valuable actively and opportunities intentions, identifying great only gives insights us revenue-generating rollovers provides successfully XXXX. strengthens our into through and ability upcoming lease navigate as are potential confidence our approach lease expirations. their but we already us tenants, needs So with funding evaluating also in This to relationships our such not

just renewals, that terms improvements XXX% of achieving and minimal of required. or lease better. new recapture Offsetting all with now had X half at above gains, XX extensions Recently, for tenant tenant higher or X of we lease expenses operating executed some each vacated, secured or X generating property we these the XXX% Year-to-date, rates recapture properties, we've back years have the year. properties impressive vacant leases in of

towards We sale near-term for or these outcomes these are resolutions. optimistic to cautiously reduce lease about are assets and carrying costs working optimal

initiatives, executing with individual vigilant impact which pockets proven of tenant incremental structures. potential overall efforts risk that to rates of growth on great any results and from any While see limits maintain consumer-centric to ability strong, as we capital event manage remain operating continue of we our and flexible We in broader situation and remain industries duration impact diversified entities less credit interest monitoring the impacts construction, portfolio our the and confidence higher are to our may in arise. our our its credit due such the through

growth and confidence investments committed escalations, through of XXXX Leveraging tenants of CapEx traditional fixed gives build-to-suit opportunities pipeline. to as and us ramp in we rent development XXXX, returning best-in-class funding existing our is our much which in building towards consisting assets, core already our acquisitions blocks, and revenue-generating visible

and AFFO year in cash assets $X.XX into share. exit we range scale proceeds XXXX For guidance AFFO return a ability investments, of ramp clinical $X.XX modest this health accomplishments neutral redeploy I quality XXXX including Starting year, to positive growth a a will a G&A, result view our are our beyond. to result growth in pleased and to in per care for per that decision the and would maintaining that outcome us strategically given XXXX establish our a with with share our and be am this position current growth that in an to reduction to year, the

made that those and share future. and BNL's are the AFFO that this we We believe investors sustainable of and lead for in to long its growth in confident will best decisions are term the BNL per decisions interest attractive year

to call updates our will the turn provide who I'll that, pipeline, build-to-suit Ryan, and With portfolio. over completed transactions on additional

Ryan Albano

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

routine I our exciting provide pipeline. robust with to additional you portfolio build-to-suit wanted details to and updates, on turning some of all Before

significant to committed exceeding developments in we progress tremendous of to our funding of of Sierra made of X where maintenance, first have construction high mentioned, million commonly is our strategy. the yields in in this these repair a initial hangers, straight-line advancing we supporting highly Nevada build-to-suit range yields closed efforts our initial month, The opportunity tenants, underway. as and $XXX attractive John advance continued consists Corporation This with cash occurred X% has As MROs consists X%. Earlier build-to-suit mid- now projects, overhaul on of and project pipeline X one to existing the referred and importance. current in

Air a awarded U.S. $XX plane. the Sierra contract to year, Force this billion a Corporation develop EXB Nevada to the successor Earlier to

the or Airborne or so, National Air Over Aircraft. their as Operations will the Doomsday assist known in fleet of Corporation planes, EXB Nevada nightwatch Sierra aging Force decade U.S. replacing the next also Center

lives. forces ground, If centers the flying the President direct operates a U.S. which and near Doomsday since Force term. on X through would EXBs, the an are currently EXB, destroyed have a that of control the of airborne The service their fleet catastrophe were the the Air thus military's end to commanding occur been XXXXs

X that size approximately Patterson MRO system. X within for be Airport, X-story MROs miles Dayton crane clear of overhead an few be important are existing Force supporting office of Base. Air strategically MROs and will will directly square Each we building feet company's be the will with to Wright XXX,XXX directly XX-foot The very Corporation Nevada located a the a heights, adjacent Sierra project. this They at in positioned International

cost is with QX completion occur the period dates million XX-month for of projects first and X QX MRO estimated and for estimated the total MRO. these over second funding is expected XXXX XXXX $XXX an of The to

of for grateful our important existing their opportunity tenants partner an with are in assist this We such project. advancement one to and of

close begin committed build-to-suit further $XXX time. the coming to opportunities of forward appropriate sharing the and expect weeks, we pipeline projects to the related In at remaining details to and funding currently look those million

that front about newly yields way made opportunities the hiking exceed on As are John credit and believe noted, cycle progress transactions and rate we strong investment most with regular these compelling, interest since are we we've very tenant began. of buildings the excited the this constructed, well-located highly have evaluated featuring

future transaction consistently will In way expectations today's environment, and quality opportunities. growth disconnect between these cautious pricing the about of the remain have as drive regular market we a where we projects observed

weighted $XX.X quarterly to total average year-to-date cap $XX.X opportunities $XXX.X investment build-to-suit Now turning a on million an our million attention UNFI included additional updates. new of to X.X% efforts, This build-to-suit bringing of during fundings million. our Alongside we $XX.X activity our our and associated rate quarter, our acquisitions investment. of million routine closed of the with investment with

second count NAV After perspective. reaching substantial value both our property are Sunbelt and premier completion, in an Sarasota, portfolio to a UNFI we tremendous Florida This overall is adds NOI largest tenant. asset that our excited from located to as

in-place the Now shifting largely to our portfolio. remain third quarter. during Trends unchanged

are near-term generate confident floating will face durable on we cautious are persistently deliver cash and or predictable their discretionary continue of to and portfolio our rates performance to that spending debt interest maturities. While who are sensitive remain rate strong and to tenants exposed industries we consumer debt that higher flows,

focus. modest health remaining Our care as with of of with the successful Lobster well some of rent sites this tenants consumer-centric particular properties our X.XX%. resolution consistent watch all fairly remained are master of in oriented remaining year our has as XX while note, Red open remain a reduction we lease proceedings bankruptcy pleased the and realizing clinically Of list

Broadly for ABR. speaking, continues which be furnishing at the home in tenant approximately to represents X% including focus specifically our space home, us, of

Plano, retail users to As we markets, ever them Texas interest they well if Both distribution site in Carolina. and back. North were from strong located reminder, we own Raleigh, a in would in we alternative strong believe center sites a are a get significant and garner

negotiation care of health properties, mentioned we John have work we tenant combination remains transactions. health and outcomes. clinical care of majority toward accomplished as lease some continue extensions, sites these his what Finally, allowances under strategy. of The oriented substantially of On control simplification to our optimal clinically disposition are remarks, improvement change regarding in our

to manage near these strive resolutions intermediate situations will We the term. and in for

turn With over provide update financial to on to results. Kevin call that, the I'll an our

Kevin Fennell

Ryan. you, Thank

incremental interest care generated of well expenses and were we revenues associated per or by simplification quarter, the X.X% decrease health G&A $X.XX During These Results as as strategy were $XX lower connection cash offset per assets. million AFFO a in results share expenses. in largely factors our of year-over-year. by with lower share, with partially driven lease vacant

realizing points our of John excluding portfolio to Ryan year-to-date, bad XX resiliency, continues show debt Valley. As and mentioned, Green basis

remain basis to comfortable operating persist our For reserve the elevated in we expenses some debt quarter XX current holding vacancies. fourth expect with the full year, point and in bad connection

of result trend the coming lower at services expenses. of set the G&A and continuing a in expectations The lower professional below primarily driven year beginning we as is costs headcount compensation by reduced of

$X As result, a expenses to million of cash we million. million range quarter, are during incurred $XX we our a G&A full cash and $XX approximately of lowering the G&A guidance to year

of with in quarter, position approximately million with approximately the flexible in investments million committed where and ended quarter of proceeds, investment pro quarter. estimated ended availability the gives fund the leverage second which incremental end unsettled $XXX We line once capacity our we $XX forward financial had and the again we forma X.Xx, in to build-to-suit of a strong revolver opportunities. combined us with equity net evaluate of ample At

to meeting, of our Board January or At XX, record per XX, December quarterly as of unit in XXXX, payable dividend holders before of XXXX. declared common on $X.XX a Directors share OP of our

our dividend AFFO align ratio closely the peers, an yield Our our of more relative with attractive to represents targeted continue will well and payout many high covered to to range. XX% mid- remains in

mentioned, range to AFFO per are $X.XX we share. of As our John reaffirming guidance $X.XX

million previously up and million. $XXX investment lowering call high In open G&A $XXX Please addition night's from mentioned, guidance to now are release the the details, questions. reduction reference we'll of additional to cash end earnings last we I for the for

Operator

comes So Eric our Instructions] [Operator first from question from Borden BMO.

Eric Borden

what's expenses you half in point cash ahead guide, the it Is year? John, and just collections it and sequentially. online the is well. offset the UNFI just up year? tracking Just the at the this raising schedule, back on G&A increased keeping are from of maybe really is now rent in from of

John Moragne

Eric, all There the process to things where that year. exactly in additional credit of it. the Commensurate now going This work in we through their with vacant impact some to coming. end of there the were tenant earlier way Yes. that's we events year was of QX. going on knew that costs hit was to we're we that assets the and anticipated that, handful carrying that was a had the some also between the have had

some better We're that we to going the will where year are. for the resolutions as confident we've got and care set we're take things guidance this account comfortable were those these took of we in footing QX. that quarter we so be why holding that into a But on we into

Eric Borden

the And to helpful. That's just Okay. acquisition environment. turning then maybe

on cap acquire and build-to-suit Just the in can what are rates if you're I focused seeing just assets, know you currently broadly today are you discuss volumes And more of were you terms cap you to what guys net rates? targeting? lease traditional environment.

any the for in near if there's you Just guys. term curious opportunities

John Moragne

Yes.

it's we've from we saying that's been whole that now quarter regular working in like. transactions what us. those to returns pretty The risk-adjusted There's that aren't lot last or a in in volume. investing I necessarily there's consistent the certainly really for X about on not there think out we So how way relative think right

a to certainly component cost of that. there's Now capital

we're way the would necessarily are that thinking to that you for universe way the But actionable the penciling the is. things in Xs the want see. in in aren't solidly that are We about us what there

want at allocating into we're the way where way this, place we're the Eric, you've about thinking transaction And of lot So market, understand telling primarily that us a capital if what is say has been investors, heard look where today. capital you allocating pipeline. we've we're the regular to our been and build-to-suit

is compelling differentiated that a think really strategy. We

regular a the there so with that Xs. and to cap price happier in where cap And getting much in yields place way basis rates doing the That's capital, transaction compelling really on upfront we're chasing allocating than we and capitalized initial are happier on down we're market. much a straight-line cash mid-X getting things allocate our we're interest,

Eric Borden

then the That's Okay. And the helpful. acquisitions quarter. in just on

bumps we year-to-date. acquired noticed that average above portfolio what's and Just the annual were been

you So kind a Or drive guys? Were for is unique could you situation? the forward just annual talk of about able higher? expectation going this this was you bumps to

John Moragne

of we're I do regular are have it and to in muted portfolio. to lot you has The what industrial restaurant think the always a assets that the with than more bumps we get our retail industrial that able in way weighting towards sector. see

we majority get this in bump. we've what aggregate you and rent in the where so command year particularly to what this the when it industrial And out last of have, into a weigh is able down we're particulars acquired of higher quarter,

think which I that's so there the bumps in blocks, when And is one is weighted X the first tier talk average about core building our rent why space. we X%, of highest

Operator

Our from next from comes JPMorgan. Paolone question Anthony

Anthony Paolone

I was you just smaller this. -- spending. into just If and next it could if investment talk will sounds acquisitions a thinking a of more year just about bit piece wondering like much be

door that's, And So forward, builds. to done the what pretty meaningful fair? historically, of it's maybe Because will if amount lot trying a capital smaller a, if just seem that build-to-suits it just like order And b, of you be think the going to be just going like magnitude? investing. is a out have the as

John Moragne

Yes.

about near with line what or the historically. capital where When talking we million I if that period right the investments, the we've in our associated you got ABR term, talking -- with looking X-month, we've month of $XXX worth allocating the So in about remarks smaller. were it's X X-quarter additional done start it out be yes, to potentially, think in you're might me, excuse

way end focused our of online things there how we'll consistent about we're XXXX. with come come Are online. about 'XX that that, not the that so for those to that sort what you conversations that the and as thinking a into can have And out conversation today going It's of those doing quarter-over-quarter, we out just world. Once now we're build-to-suits, year-over-year a basis of on going longer-term we're on of on the laddering much ladder of the at having way, view add else 'XX. be it putting because you beginning to are build-to-suits are

to acquisitions what after continue particularly go we'll be majority what term, for direct us. is if like in short And Most year. from we've relationship-based the regular the for done them, market. the existing of has see deals, perspective year things in a we'll opportunistic that things of that. going with make after are those, relationships, transaction deals we way transaction of look and been sense this Now We're those not this the we've that done lot that way regular a investment direct

uncertainty of hope think the you'd around to still maybe expectations I year people certainty interest better. were buyers' a to if for lot the cut start rates to have weeks cap I get and seller and rates and in waiting take and last Fed the starting the way been entire to come rates some you adjust this regular you expectations with that market. going align there's mean, see X transaction down so, even rates or

in by you basis the the you've XX-year. Fed seen from points, to of on Fed XX mean, rates if I XX when But and XX basis increase cut take points September cut today, the rates

are we're people were transaction planning were banking That's get in We that growth program 'XX as environment something that the and way our XXXX market. on building our in core that we build-to-suit comfortable go we control sure more the blocks, the we with the not and I'm to for. were in as of very not and better looking that you'd regular planning they seeing So a generate X type destiny 'XX. can into hopes own for with

Anthony Paolone

as But just and really think the coming likely doing dispositions portfolio care that basis, a a Okay. up time. of just slowing health down sale or parts any as terms of talked the in source for And of about that funds in about then we rest should you go-forward over of XXXX? other on

John Moragne

Yes.

traditional be We've that on. I got clinical strategy a think health of X% this it's more the we'll point. working management care asset at remaining the

of to those in Some XXXX. we'll look execute

those of a bit may Some longer. little take

office our assets, which about We ABR. have of our is X.X%

real have for to office coming There's years There's good and evaluate to no that opportunity we and solutions there. the rush don't of assets, find on value and plenty light those go in out fire.

out, it's of the when would looking on management expect take do some risk, stuff of had the more where going some this you from strategic traditional So advantage outside be care. in strategy arbitrage, to that clinical of to we be on we'll us one asset mitigate do to years here health a focus

Operator

from Markets. KeyBanc Our Capital next from question comes Upal Rana

Upal Rana

out John, there of remaining know the of the what you -- be I appetite mostly to left. are X/X care be mentioned could the you with X/X assets? health for one-offs. there's kind that's Can And about the of share be way, dispositions from buyers going going to

John Moragne

going to of the There's -- as sort There's I you nature. one-off said, repeated certainly interest. be

these be discrete from regional an and folks particular to that have standpoint. going So are in that a local, operating property interest that buyers, asset individual

time maintain price, just is buyer we possible. for but our it, at the try to said, reason a price. always any So seller we're to as some on it. There's on we'll as I And want not take at value taking as time main that a much

maintain much right find situation. we the as possible. if And to So and want that a something be right a as means improvement, extension, person like value do credit in some that that work tenant on event, do to need we work through that, sure patient to try make sure we to lease we'll to the make

Upal Rana

allocate I you traditional looked acquisitions? the you be market? some give Okay. there could details transaction more the to has allocating some build-to-suits, competition sellers you more then could are from And helpful. in capital That's towards towards what where may do think begin on Got us capital And know like it. you exhaustion but

John Moragne

the be competitive like in open as to back been possible. year we this The as XXXX. most look that has did mid-market that opportunistic industrial We'll play certainly that incredibly processes of bid We they in place and deal sort XXXX it. are with

haven't I like couple ago went, environment as yet. of at But where in were what seen of of this expectations for mentioned people's have We in any time, seem they been met back the rate don't questions in exhaustion a half terms the same hoping the terms of year. they

it's to there some possible start So that get capitulation here and people environment. to used see as you a higher longer for

wait Xx that. right we We'll as see. got ready to way comfortably We're the of available those and of build-to-suit basis the even below to our program, through end poised on million We've jump the investments. $XXX I my leverage to all with on prepared in capacity stay on now, line a said remarks,

be we've things opportunity opportunistic buy go and so And got makes out to sense. ample some and if it

Operator

Our from next Jay question Wedbush Securities. comes Kornreich from

Jay Kornreich

in first issued During years. your forward, small equity quarter, a you the X past

how you as the growth, so just I'm to going to do portfolio switches curious about fund focus issuing from forward? transactions capital think And repositioning now equity

John Moragne

Yes.

issued open equity. was So world great and for we're that X forward is to a when constructive It market years the ATM the had earlier sort back basis. know in proceeds between were this pleased very was it We times million certainly we $XX business. on to It the get long let a environment issue year. in of was than the more

a trading would to do where very excited we not of place huge same a were the that feel in time, amount At to go excited out we're equity. we that. and So currently do

have getting. of opportunity match what Of are things course, dynamic equation a what to up. that set is, in the It's the yields a bit terms you we're these of

a So straight-line in build-to-suit long-term million was yields cap compelling the $XX we to the that that X we're on relative program the getting opportunity raised the range.

pleased So with we're that.

a same the raising forward. be additional we'll There's from at always cautious going equity. dilutive impact time, But

opportunity today, the where cost stands happy don't of thing we But where price it's is need to relative So our the do it. to stock the is capital trading, set, it. our we're and yield

planning not more. whole out we're and doing So on going a lot

Jay Kornreich

now build-to-suit about build Okay. funding there focus stands to And the of of goalpost then just is they these it want this grow, large how the into? on do any $XXX you roughly coming platform the ultimately million, start with all of which continues how kind to think developments, you commitments And as online? as at

John Moragne

a we would the funding standpoint, altogether different So way think it that normally. it's not about from from

today. with We the those capacity to turn. near-term we the deal of But our any the debt for rest don't we'll pretty funding We'll way pipeline. have in We have past that maturities. in the at similar look have

to you would for ABR we're pretty net hear of In Sitting QX pretty as about that from as exciting between the able traditionally differentiated of capacity sometime and of $XX the feels that online an the in the got hope future and as here come this, filling QX what XXXX terms will with XXXX. opportunity here it out, lease being today, looking make you said, big million space. We've possible. of and to tell I

filling ladder is out able this going XXXX, So future, rest be about of start thinking out our to to hope into the XXXX. the

is tenants as grow it then to of to funding one-stop them, and for businesses to next and on for a us to industrial projects close, one. differentiated the with our unique This makes chunky find large deals with been relationships them that gives with focus, easier we've do the their move the ability able to with that build them believe we to strategy surety with our shop, source and a a the unique is developers, to

is excited that we're So very this about. something

Operator

And from the with next Green Ryan comes question Street. Caviola

Ryan Caviola

to you X I quarter just want you've versus thoughts to looking see feel if you specific could in provide where last on where and you're levels entered new maybe might a on exposure the optimal industries? or share industries reached bit of detail you some increase

John Moragne

didn't Sorry, I again? repeat the can you first that catch one.

Ryan Caviola

Yes.

that -- for X quarter. the just no industry -- the you by up went worries. Just Yes, count

just So some you those exposure provide going -- interest you're you on color industries increasing if could X new in there. and to if entered

John Moragne

services. a the we blanking at moved of I facet mean, moment. into I'm automotive of different Yes. sort

largest there for services Detroit the acquisition quarter called and was of we based automotive the well, of which -- our them. of a auto different seats in is industry Magna terms products outside Seating, of with company versions and One providing the had in

a it's bit So of an we've of expansion into. already what been

portfolio any than us. individual the maybe a we of of something base to we a of problem individual heart larger quite significant of that's overall mitigate incredibly question, the diversified industries, having of seriously. your But where tenant The take causing don't because for any nature have tenant have that tenants the our is number is -- that important tenant risk helps it X%, number we single event the

your individual industries, to just risk, tenant the And it's industry risk. it's individual also on not point

think right our looking terms more better operators, at watch industries you list health clinical some the the in you off of portfolio, in of that now, and be If can you risk. the the about have mitigating furnitures the

good is over that time increasing So one. a

Ryan Caviola

And emerging just sector activity or if in that there opportunities might to I that then wanted either of if to going steady you has in shift remain are general forward? retail. investment XX-XX mix to split that industrial kind balance see expect

John Moragne

now. for I been pretty we've mean, a Yes. steady that while on

has in years of XX% of think go been even terms X industrial. if our it I you activity, investment back in

focus. a time long industrial been has overall terms say, I of in coming, the would that So

of predominant have. you If our much go where and to is than smaller industrial it sits now XXXX, portion we was back today is what portfolio the it

we're nimble, are opportunistic. We and though,

diversification, going opportunities we But good were afraid going assets, I not for the and that, par do retail would after sort course first we question. the restaurant split relatively think, certainly them. back us, forward. to your to We're is in see and doing XX-XX of we if for go So of a like

Operator

question Kamdem comes from next Stanley. our And Morgan with Ronald

Unknown Analyst

Jenny Ron. [ for ] on It's

I up opportunities. to I follow the think want build-to-suit the on one, first

open this -- guys you the are how So to with of tenant development would forward, with point? relationship development tenant opportunity it? related -- And any like investors any make you do, to and kind risk new risk like this you comfortable going if at

John Moragne

looking shift to well of do here But Jen. opportunities absolutely. that and them, to block. second revenue-generating a core Thanks, we're certainly building happy we Yes, existing CapEx sort so and is our tenants, of our existing strategy have -- third for building sort with between do marriage core are sort projects as of the where to that that if they Yes. new tenants. build-to-suit from With blocks second of This third

about recent were This Nevada remarks Corporation a already tenant great They is portfolio. the in talked one that in example. most Ryan here his existing an in

on We the an of MRO construction Force Air for have Department. and them project wonderful with U.S. opportunity facilities the incredibly in for this the X partner Dayton Defense important to these

to So that we're more. do happy with

and some risk. to remarks, standpoint, it And from not We're in about traditional talked we've more my development taking investors in a risk detail. I mentioned

we in We're I an project note foremost, think first is and rent These it's identified have where projects not building completed. a development important we're who speculative of paying start development. here. tenant doing when the that a all dream to are not will sort place open

thing second the of in we're deals And the structure the is that doing.

a risk, in we on sort last that if development will. of pocket taking We in mitigants risk are place are are you if to ever resort, of we putting of the spot are we more traditional where ensure sort

us. that to it's important is something absolutely So

needed. We looking if to risk traditional are take go folks it's happy not on with that to and detail on more development in

Unknown Analyst

Yes, makes sense.

build-to-suit with at to open you are point? So any relationship this tenant new opportunities

John Moragne

we're look large coffee will not new to are at. for small deal pencil has to open $XXX any every $X individual concept. running as as tenant is or as UNFI million mean, small Whether with I as an site per question. that we an take with we QSR Yes. opportunity us, But projects happy million as did a a

happy things large and that and larger than and we're do as that between. to everything than smaller in So

Unknown Analyst

happened Medical the what is, the of Center? Green me can sense. remind Makes to Valley you second And Okay.

John Moragne

Yes.

a rent that that's resolution carrying property managing right vacant very no now. with there costs next be have a through won't been the We're the hasn't hope we'll There's this associated sell So it. and year. There year, to that quickly. is any

be So anybody's anymore. really that should it's not something on radar

Operator

from of comes Caitlin from question [Operator the Instructions] Burrows next Goldman line Our Sachs.

Caitlin Burrows

of are prepared is I bit you credit think talk a more seeing? could some to the the you pockets earlier risks But mention see, about be diversification. which you could little did risk that that in limited -- remarks, you there by

John Moragne

close talked pretty paying level is site but really compelling. for the side is see their the would to performance We're pleased sort to credit the Yes. estate there, Thanks, went, a some from real attention but Red watch We're of off and with need list. home. there Ryan at corporate usual the to happening what's suspects. as about performance we them it it's how of from to a back concern say structuring I Caitlin. come issue Lobster sustained them the opposed on

that manage we'll So fine. just

operators length, the to care. sort well attention through through. them handful home helping at they're have industry, of some working There's and now, paying talked furniture a we've also issues of clinical of as as a about that we're operators goods there right that credit smaller We're handful in the health

So usual suspects us. for

Caitlin Burrows

I you relate maybe like how doing also Got restaurant it. restaurant side, the cetera. is it's heard how difference concepts to that a it whether in different And some then feel service, quick are could But portfolio on some give just the or on might there's various doing? we've further comments sit-down et and

John Moragne

Yes.

the down in which is level performer and is for on things if the X, it particular, I from about Xs. site you basis I Lobster, in this overall, average for coverage the think about quarter. portfolio rent bit But ticked restaurant then a we us X of sort to in mean, up go a X Red ranges to up weighted So -- little lowest

So you stuff between. in got

our where So with overall, very restaurants sit. pleased

Caitlin Burrows

are the which follow-up Got like guess, build-to-suits. it a of generally sense. makes on maybe it. tenants, with the existing you're deals And I just lot doing another sounds

it properties, size would those of like seems increase though, industrial relationships the somewhat. the Given concentration deepening

larger increase amount they kind some Or just that from you that So still how really is balance a that's piece? to small it concern? do not something of concentration

John Moragne

Yes.

So difficult with above there's to that it but X% we've with X%, had opportunities standpoint. a ABR it's we're tenant. -- we because on we're sometimes go any go above been have risk hard mitigating a an going individual line pretty that a to It's from comfortable basis line not just not

had to seen unfortunately So months. that we've opportunities the last in we've some decline XX

little as top projects in some comfortable higher larger We're that. sort concentration the bit with be of to online, of X%. the and is the of gets are But XX already come tenant us is hard bit for going these fine. what top or really XX little below to terms perfectly top a line lowest tenant tier concentrations that that adding we're As and a keeping every at individual

Operator

from question Truist. next comes Kim from Bin The Ki

Ki Bin Kim

Just here. of a couple follow-ups

release, maybe supplemental development of have few the you a your the you to forward in of development remainder the million projects? about schedule thought enhancing commitments, UNFI safe and Sierra show assume in your funding most $XXX for the is it projects, press it? Is On Nevada. just that And industrial

John Moragne

Yes.

schedule the it more sort gives in towards supplemental predominantly be next and updated an to projects to of time. that got come we've the we'll adding weighted lot detail, So in is What's a industrial. over

little We of gets regular that in schedule the a these on a quarter-over-quarter. The when there have you'll bit intention more basis, start to retail see updating updated. is not

to schedule, us to see releases hopefully, updated been even NAREIT. from if expect before So press close with some an we've should able you potentially these

Ki Bin Kim

trying process. again like group? additional are this And Sandstone to deals, origination these development the the was through Just Or directly understand the sourced?

John Moragne

Yes.

the or in either through tenant direct Corporation So the Sierra with the Nevada direct situation. developer

Samsung. -- at through a time. point with couple expanding So those We're different not of and developers this over working and just relationships

going looking project some prepared where find process they a for in with consistency. those different us. some with that's are to I development provide just developers for now to have As surety, used to to work need of simplifying them them remarks, pockets capital We're X to with They my make work. said the someone

deal move So to can compelling on these their compelling looking opportunities business. where they they're to grow are them for going and so us be next for to the

incredibly So important. from pipeline we relationships are build-to-suit in these deal that or And relationship-based is standpoint a is have now direct every a either our that are right one.

Ki Bin Kim

cash Page of And that fundings one. X.X%. On then comment in your XX just receive supplemental, additional revenue a last and there's rate will a cap

Just curious what means. that

John Moragne

Yes, closeout list for Ki Bin, UNFI. punch of that's items sort the

is ongoing so earned the and contract. capitalized interest build a there's little of under with project differential the the And primary the how from closeout. difference is the bit the And gap yield

Operator

[Operator our was Instructions] Our question last next JMP. Citizens remarks. back for questioner. Mitch from to comes Moragne That any closing over will John hand from I Germain

John Moragne

thank us And thanks, today. everybody, Awesome, you. joining for

with rest you day. at of many in of Thanks we've your building all what year. weeks -- of As you seeing We're hear, where accomplished NAREIT. we're and talking you forward this great we're incredibly very headed we're and and the looking all, what excited and can a have proud where of about coming to

Operator

Third Lease That does Net Quarter the day. a Call. Conference Have Broadstone Earnings conclude XXXX nice

now You disconnect. may

Broadstone Net Lease (BNL) 31 Oct 242024 Q3 Earnings call transcript