BNL — Broadstone Net Lease, Inc.

Summary of Broadstone Net Lease (BNL) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• AFFO per Share: $1.49 for the full year, a 4.2% increase year-over-year.
• Q4 AFFO: $0.38 per share, a 5.6% increase compared to 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: Totaled 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.

2. Strategic Updates and Business Highlights

• Core Strategy: Focused on three pillars: strong portfolio performance, a pipeline of build-to-suit projects, and stabilized acquisitions.
• Build-to-Suit Pipeline: Approximately $350 million in high-quality developments scheduled for stabilization in 2026, with an additional $142 million under executed LOIs.
• Tenant Management: Successfully navigated tenant issues with minimal financial impact, including the American Signature bankruptcy, where no bad debt was incurred.
• Project Triboro: A key transitional capital investment with potential for significant future value, focusing on a hyperscale data center campus.

3. Forward Guidance and Outlook

• 2026 AFFO Guidance: Reiterated guidance range of $1.53 to $1.57 per share, with expectations for investment volume between $500 million and $625 million.
• Dividend Increase: Quarterly dividend raised to $0.2925 per share, reflecting growth and confidence in future performance.
• Investment Strategy: Emphasis on maintaining a rolling target of $350 million to $500 million in active build-to-suit projects.

4. Bad News, Challenges, or Points of Concern

• Red Lobster Exposure: Ongoing challenges with tenant performance and foot traffic; evaluating strategies to reduce exposure.
• Market Valuation: Frustration with relative valuation compared to peers; efforts to close the valuation gap remain a priority.
• Competitive Landscape: Increased competition in the build-to-suit space, although management has not seen significant impacts on their deal sourcing.

5. Notable Q&A Insights

• Build-to-Suit Competition: Management noted that while other net lease companies are entering the build-to-suit space, they have not experienced increased competition for their targeted deals due to their relationship-based sourcing strategy.
• Project Triboro Timeline: Anticipated initial power delivery in Q3 2027, with ongoing discussions about tenant interest in the site.
• Capital Recycling Strategy: Discussions around potential asset sales, particularly related to UNFI, with a focus on timing and market conditions.
• Tenant Management: Positive outcomes with key tenants like At Home and Claire's, but ongoing caution regarding Red Lobster's performance and potential lease terminations.

Overall, Broadstone Net Lease demonstrated solid financial performance in 2025, with a strategic focus on growth through build-to-suit projects and proactive tenant management, while navigating challenges related to specific tenants and market valuation pressures.