• AFFO per Share: $1.43 for 2024, a 1.4% increase compared to 2023.
• Portfolio Leased Rate: More than 99% leased.
• Rent Collection: More than 99% rent collection.
• Total Investments: Over $400 million executed in 2024.
• Build-to-Suit Developments: $227.3 million with initial cash yields in the mid- to high 7% range.
• 2025 AFFO Guidance: $1.45 to $1.49 per share, approximately 3% growth at the midpoint.
• Investment Activity 2024: $404.8 million total, including $234.3 million in new property acquisitions.
• Dispositions 2024: 58 properties sold for $364 million.
• Lease Rollovers 2024: 7 executed, 112% weighted average recapture rate.
• Core G&A Expenses: $29.3 million for the year.
• Pro Forma Leverage: 4.9x net debt.
• Dividend: $0.29 per common share and OP unit.
• 2025 Investment Volume Guidance: $400 million to $600 million.
• 2025 Disposition Volume Guidance: $50 million to $100 million.

• Warning! GuruFocus has detected 6 Warning Signs with BNL.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Broadstone Net Lease Inc (NYSE:BNL) achieved $1.43 of AFFO per share, reaching the top end of their guidance range.
• The company maintained a portfolio that is more than 99% leased with over 99% rent collection.
• BNL executed over $400 million in total investments and completed their clinical healthcare portfolio simplification strategy.
• The company has a strong pipeline of new investments, including $103.5 million of acquisitions under control and $227.3 million of build-to-suit developments.
• BNL's build-to-suit development strategy offers attractive yields, with straight-line yields in the mid- to high 8% range, providing a powerful tool for long-term growth.

Negative Points

• BNL is facing incremental pockets of credit risk, particularly in consumer-centric industries and some clinical healthcare properties.
• The company is navigating the Zips Car Wash bankruptcy, which involves 10 sites under master leases, accounting for 62 basis points of ABR.
• There is a disconnect between pricing expectations and the quality of opportunities in the regular transaction market, making it competitive.
• BNL's guidance includes 125 basis points of bad debt for 2025, indicating potential challenges in tenant creditworthiness.
• The company does not plan to raise equity in 2025, relying instead on accretive dispositions, which may limit flexibility in funding growth.

Q & A Highlights

Q: Your $400 million to $600 million of investment guidance, is that money out the door? Or is that deals that actually contribute net rents? A: (John Moragne, CEO) That's money out the door. It includes both regular way deals that will contribute net rent today and investments in our build-to-suit program.

Q: How much of the investment should we think about as contributing to earnings during the year versus growing the build-to-suit pipeline? A: (John Moragne, CEO) It will be a mix. We have $103.5 million of regular way deals under control that should close by the end of the first quarter. We'll ensure you can model out what's rent-paying this year versus future contributions.

Q: Regarding the developments, how are you planning to fund the $200 million of current obligations? A: (John Moragne, CEO) Not all of the $227 million will be funded this year; some will extend into 2026. We'll use the revolver and incremental disposition proceeds for funding.

Q: Can you provide more details on the Zips Car Wash bankruptcy and your expectations? A: (John Moragne, CEO) We own 10 sites under 3 master leases, accounting for 62 basis points of our ABR. We are negotiating terms and expect a favorable outcome. We are also in discussions with other interested parties for potential sales or new leases.

Q: What are the economics of the additional $500 million build-to-suit developments you're evaluating? A: (John Moragne, CEO) The economics are consistent with our current projects: upfront cash yields in the mid-7s, straight-line yields in the mid-8s to mid-9s, and rent bumps of 2.5% to 3.5%. These are primarily industrial projects.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.