BNL — Broadstone Net Lease, Inc.

Broadstone Net Lease (BNL) Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• AFFO per Share: $1.49 for the full year, a 4.2% increase year-over-year.
• Q4 AFFO: $75.8 million or $0.38 per share, a 5.6% increase from Q4 2024.
• Portfolio Performance: 99% leased with 99.8% of rents collected.
• Investment Activity: Deployed $748.4 million in 2025, including $429.9 million in new property acquisitions and $209.3 million in build-to-suit developments.
• Bad Debt: Only 31 basis points for 2025, down from 67 basis points in 2024.
• G&A Expenses: $28.7 million for the full year, down 2% year-over-year.
• Leverage: Ended the year with pro forma leverage of 5.8x and over $700 million available on the revolver.

2. Strategic Updates and Business Highlights

• Core Strategy: Focused on three pillars: solid portfolio performance, a pipeline of build-to-suit projects, and stabilized acquisitions.
• Build-to-Suit Pipeline: Approximately $350 million of projects scheduled to stabilize in 2026, with an additional $142 million under executed LOIs.
• Tenant Management: Successfully navigated tenant situations, including the bankruptcy of American Signature, with no bad debt incurred.
• Project Triboro: A key transitional capital investment with potential for a hyperscale data center, expected to begin initial power delivery by Q3 2027.

3. Forward Guidance and Outlook

• 2026 AFFO Guidance: Reiterated guidance of $1.53 to $1.57 per share, with a midpoint growth of 4%.
• Investment Volume: Expected between $500 million and $625 million, primarily focused on build-to-suit projects.
• Dividend: Increased quarterly dividend to $0.2925 per share, reflecting growth and confidence in future performance.

4. Bad News, Challenges, or Points of Concern

• Red Lobster Exposure: Tenant performance is mixed post-bankruptcy, with ongoing evaluations to reduce exposure. The brand currently represents approximately 1.3% of total ABR.
• Market Valuation: Management expressed frustration with the company's relative valuation compared to peers, despite improvements in stock price.
• Competitive Landscape: Increased competition in the build-to-suit market, although management believes their relationship-based sourcing strategy mitigates this risk.

5. Notable Q&A Insights

• Build-to-Suit Competition: Management noted that while others are entering the build-to-suit space, they have not seen a significant increase in competition affecting their deal flow.
• Project Triboro: Discussions around tenant commitments are ongoing, with expectations to be in the market for leasing activity in the first half of 2026.
• Capital Recycling: Management is open to opportunistic asset sales but emphasized the importance of favorable economics in any transaction.
• Tenant Management: Positive outcomes were reported with other tenants, including At Home and Claire's, with proactive strategies in place for lease transitions and re-leasing efforts.

Overall, Broadstone Net Lease demonstrated solid financial performance in 2025, with strategic initiatives aimed at growth and tenant management, while also navigating challenges related to specific tenants and market competition. The outlook for 2026 remains positive, with a focus on maintaining growth and managing portfolio risks.