Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

    Date of Report (Date of earliest event reported): July 30, 2024

   

BROADSTONE NET LEASE, INC.

(Exact name of Registrant as Specified in Its Charter)


Maryland	001-39529	26-1516177
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

207 High Point Drive Suite 300
Victor, New York		14564
(Address of Principal Executive Offices)		(Zip Code)

    Registrant’s Telephone Number, Including Area Code: 585 287-6500

   

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00025 par value	BNL	The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 30, 2024, Broadstone Net Lease, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Additionally, on July 30, 2024, the Company made available on its website an updated presentation containing quarterly supplemental information pertaining to its operations and financial results including the quarter ended June 30, 2024. A copy of the quarterly supplemental information is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The press release and quarterly supplemental information are also available on the Company’s website.

The information contained in this Item 2.02, including the information contained in the press release attached as Exhibit 99.1 hereto and quarterly supplemental information attached as Exhibit 99.2 hereto, are being “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. References to the Company’s website in this Current Report on Form 8-K and in the attached Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K do not incorporate by reference the information on such website into this Current Report on Form 8-K and the Company disclaims any such incorporation by reference.

Item 9.01 Financial Statements and Exhibits.


(d)	Exhibits

INDEX TO EXHIBITS


Exhibit No.		Description

99.1		Press Release dated July 30, 2024
99.2		Quarterly Supplemental Information for the Quarter Ended June 30, 2024


104		Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			BROADSTONE NET LEASE, INC.

Date:	July 30, 2024	By:	/s/ John D. Callan
			Name: John D. Callan Title: Senior Vice President, General Counsel and Secretary

EXHIBIT 99.1

For Immediate Release

July 30, 2024

    Company Contact:
 
Brent Maedl
Director, Corporate Finance & Investor Relations
brent.maedl@broadstone.com
585.382.8507

Broadstone Net Lease Announces Second Quarter 2024 Results

VICTOR, N.Y. – Broadstone Net Lease, Inc. (NYSE: BNL) (“BNL”, the “Company”, “we”, “our”, or “us”), today announced its operating results for the quarter ended June 30, 2024.

MANAGEMENT COMMENTARY

“We are performing well in all facets of our business, and I am incredibly proud of our results and execution on our strategic priorities through the first half of this year,” said John Moragne, BNL’s Chief Executive Officer. “We had ambitious goals for 2024 and are well on our way to meeting them. We are on the cusp of substantially completing our healthcare portfolio simplification strategy, having fully redeployed those proceeds into closed and committed investments, and are continuing to build a strong pipeline focused on our differentiated core building blocks of growth, seeing incremental revenue generating capital expenditures with our existing tenants and build-to-suit funding opportunities with our development partners that supplement our traditional net lease acquisition pipeline. Combined with a solid and streamlined portfolio with top tier weighted average annual rent growth, a fortified balance sheet with low leverage and ample liquidity, and the benefits of prudent and disciplined capital decisions, we are positioning BNL to generate attractive and sustainable growth in 2025 and beyond.”

SECOND QUARTER 2024 HIGHLIGHTS

    INVESTMENT ACTIVITY

    •During the second quarter, we invested $247.8 million, including $165.1 million in new property acquisitions, $52.2 million in transitional capital, and $30.5 million in development fundings. The new property acquisitions had a weighted average initial cash capitalization rate of 7.3%, a weighted average lease term of 11.5 years, and weighted average annual rent increases of 2.3%. Total investments consist of $134.3 million in industrial properties and $113.5 million in retail and restaurant properties.
•Through the second quarter, we have invested $287.9 million, including $165.1 million in new property acquisitions, $52.2 million in transitional capital, $67.7 million in development fundings, and $3.0 million in revenue generating capital expenditures. The revenue generating capital expenditures had a weighted average initial cash capitalization rate of 8.0%, a lease term of 8.0 years, and annual rent increase of 2.5%. Total investments consist of $171.4 million in industrial properties, $113.5 million in retail and restaurant properties, and $3.0 million in animal health services properties.
•Subsequent to quarter-end, we invested $11.3 million in development fundings. 
•As of the date of this release, we have an additional $69.3 million of acquisitions under control and $339.3 million of commitments to fund developments. Our commitments to fund developments were sourced through existing and new developer relationships, and include $331.7 million of industrial properties and $7.6 million of restaurant properties with varying construction start dates through 2024 and rent commencement dates beginning throughout 2025 and the first half of 2026. 
•During the second quarter, we sold three properties for gross proceeds of $24.4 million at a weighted average cash capitalization rate of 7.3%. Together with dispositions from the first quarter and subsequent to quarter end, we have sold 45 properties for gross proceeds of $306.9 million at a weighted average cash capitalization rate of 7.8% on tenanted properties. The dispositions included 5 properties for gross proceeds of $30.8 million relating to our previously announced Portfolio Sale (as discussed below) as part of our healthcare portfolio simplification strategy.

   

    OPERATING 
RESULTS

    •Generated net income of $35.9 million, or $0.19 per share.
•Generated adjusted funds from operations (“AFFO”) of $70.4 million, or $0.36 per share.
•Incurred $9.9 million of general and administrative expenses, inclusive of $2.1 million of stock-based compensation.
•Portfolio was 99.3% leased based on rentable square footage, with only three of our 777 properties vacant and not subject to a lease at quarter end.
•Collected 99.0% of base rents due for the second quarter for all properties under lease. Excluding rents from Green Valley Medical Center, rent collections were 99.8%. 

   

    CAPITAL MARKETS ACTIVITY

    •Ended the quarter with total outstanding debt of $1.9 billion, Net Debt of $1.9 billion, a Net Debt to Annualized Adjusted EBITDAre ratio of 5.1x, and a Pro Forma Net Debt to Annualized Adjusted EBITDAre ratio of 4.9x.
•At June 30, 2024, had $920.9 million of capacity on our unsecured revolving credit facility.
•In May 2024, we refreshed our ATM Program, increasing the available capacity to $400.0 million.
•In June 2024, we entered into $460.0 million of forward interest rate swaps starting in 2025 and maturing through 2030 at a weighted average fixed rate of 3.73%.
•Declared a quarterly dividend of $0.29.

   

SUMMARIZED FINANCIAL RESULTS


	For the Three Months Ended						For the Six Months Ended
(in thousands, except per share data)	June 30, 2024		March 31, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Revenues	$	105,907	$	105,366	$	109,353	$	211,274	$	228,345

Net income, including non-controlling interests	$	35,937	$	68,177	$	62,996	$	104,114	$	104,370
Net earnings per share – diluted	$	0.19	$	0.35	$	0.32	$	0.53	$	0.53

FFO	$	73,725	$	73,135	$	72,524	$	146,861	$	153,701
FFO per share	$	0.37	$	0.37	$	0.37	$	0.74	$	0.78

Core FFO	$	73,001	$	74,072	$	74,381	$	147,073	$	148,854
Core FFO per share	$	0.37	$	0.38	$	0.38	$	0.74	$	0.76

AFFO	$	70,401	$	70,873	$	69,004	$	141,276	$	136,489
AFFO per share	$	0.36	$	0.36	$	0.35	$	0.72	$	0.69

Diluted Weighted Average Shares Outstanding		196,470		196,417		196,228		196,379		196,148

FFO, Core FFO, and AFFO are measures that are not calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See the Reconciliation of Non-GAAP Measures later in this press release.

REAL ESTATE PORTFOLIO AND HEALTHCARE PORTFOLIO SIMPLIFICATION STRATEGY

As of June 30, 2024, we owned a diversified portfolio of 777 individual net leased commercial properties with 770 properties located in 44 U.S. states and seven properties located in four Canadian provinces, comprising approximately 38.5 million rentable square feet of operational space. As of June 30, 2024, all but three of our properties were subject to a lease, and our properties were occupied by 207 different commercial tenants, with no single tenant accounting for more than 4.1% of our annualized base rent (“ABR”). Properties subject to a lease represent 99.3% of our portfolio's rentable square footage. The ABR weighted average lease term and ABR weighted average annual minimum rent increase, pursuant to leases on properties in the portfolio as of June 30, 2024, was 10.4 years and 2.0%, respectively.

As previously announced in our July 2, 2024 press release, a third-party purchaser has completed due diligence procedures with respect to the purchase of an additional 15 clinically-oriented healthcare properties from the Company pursuant to a previously executed purchase and sale agreement (the “Portfolio Sale”). On July 11, 2024, we closed on the first of two tranches, selling five properties for gross proceeds of $30.8 million. The second tranche, representing 10 additional properties for $49.5 million, will close in October 2024. In total, the Portfolio Sale will generate $80.3 million of gross proceeds at a weighted average capitalization rate of 7.96%. Based on ABR at the time of our initial announcement of the healthcare portfolio simplification strategy, the Portfolio Sale represents an additional 15% of our planned healthcare simplification strategy, completing approximately 65% of our healthcare portfolio strategy and representing nearly all previously planned healthcare dispositions for 2024.

Following the closing of the second tranche of the Portfolio Sale, our healthcare dispositions would total $342.5 million year-to-date at a weighted average capitalization rate of 7.87%, which we anticipate will be fully redeployed based on actual and committed investments. With these sales and successful redeployment efforts completed to-date, we anticipate a reduction in our healthcare exposure from 17.6% of our ABR at the end of 2023 to 11.3%.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITIES

As of June 30, 2024, we had total outstanding debt of $1.9 billion, Net Debt of $1.9 billion, a Net Debt to Annualized Adjusted EBITDAre ratio of 5.1x, and a Pro Forma Net Debt to Annualized Adjusted EBITDAre ratio of 4.9x. We

had $920.9 million of available capacity on our unsecured revolving credit facility as of quarter end, and have no material debt maturities until 2026.

In May 2024, the Company refreshed its ATM Program through which it may, from time to time, publicly offer and sell shares of common stock having an aggregate gross sales price of up to $400.0 million. We did not raise any equity during the quarter, and had $400.0 million of capacity remaining on our ATM Program as of June 30, 2024.

In June 2024, we entered into $460 million of forward interest rate swaps starting in 2025 and maturing through 2030 at a weighted average fixed rate of 3.73% compared to the June 30, 2024, SOFR rate of 5.34%. The interest rate swaps will serve two purposes: first, to lock in a near-term cost of capital for a portion of our future expected revolver activity as we continue to execute on our growth strategy; and, second, to replace existing swaps that start to mature more meaningfully in 2025 and 2026.

DISTRIBUTIONS

At its July 25, 2024, meeting, our board of directors declared a quarterly dividend of $0.29 per common share and OP Unit to holders of record as of September 30, 2024, payable on or before October 15, 2024.

2024 GUIDANCE

For 2024, BNL expects to report AFFO of between $1.41 and $1.43 per diluted share, which remains unchanged.

The guidance is based on the following key assumptions:

(i)

investments in real estate properties between $400 million and $700 million, revised up from between $350 million and $700 million;

(ii)

dispositions of real estate properties between $350 million and $450 million, revised from between $300 million and $500 million; and

(iii)

total cash general and administrative expenses between $31.5 million and $33.5 million, revised down from between $32 million and $34 million.

Our per share results are sensitive to both the timing and amount of real estate investments, property dispositions, and capital markets activities that occur throughout the year.

The Company does not provide guidance for the most comparable GAAP financial measure, net income, or a reconciliation of the forward-looking non-GAAP financial measure of AFFO to net income computed in accordance with GAAP, because it is unable to reasonably predict, without unreasonable efforts, certain items that would be contained in the GAAP measure, including items that are not indicative of the Company’s ongoing operations, including, without limitation, potential impairments of real estate assets, net gain/loss on dispositions of real estate assets, changes in allowance for credit losses, and stock-based compensation expense. These items are uncertain, depend on various factors, and could have a material impact on the Company’s GAAP results for the guidance periods.

CONFERENCE CALL AND WEBCAST

The Company will host its second quarter earnings conference call and audio webcast on Wednesday, July 31, 2024, at 11:00 a.m. Eastern Time.

To access the live webcast, which will be available in listen-only mode, please visit: https://events.q4inc.com/attendee/782540478. If you prefer to listen via phone, U.S. participants may dial: 1-833-470-1428 (toll free) or 1-404-975-4839 (local), access code 639622. International access numbers are viewable here: https://www.netroadshow.com/events/global-numbers?confId=68100.

A replay of the conference call webcast will be available approximately one hour after the conclusion of the live broadcast. To listen to a replay of the call via the web, which will be available for one year, please visit: https://investors.bnl.broadstone.com.

About Broadstone Net Lease, Inc.

BNL is an industrial-focused, diversified net lease REIT that invests in primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. Utilizing an investment strategy underpinned by strong fundamental credit analysis and prudent real estate underwriting, as of June 30, 2024, BNL’s diversified portfolio consisted of 777 individual net leased commercial properties with 770 properties located in 44 U.S. states and seven properties located in four Canadian provinces across the industrial, restaurant, healthcare, retail, and office property types.

Forward-Looking Statements

This press release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies, and prospects, both business and financial. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “outlook,” “potential,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “projects,” “predicts,” “expect,” “intends,” “anticipates,” “estimates,” “plans,” “would be,” “believes,” “continues,” or the negative version of these words or other comparable words. Forward-looking statements, including our 2024 guidance and assumptions, involve known and unknown risks and uncertainties, which may cause BNL’s actual future results to differ materially from expected results, including, without limitation, risks and uncertainties related to general economic conditions, including but not limited to increases in the rate of inflation and/or interest rates, local real estate conditions, tenant financial health, property investments and acquisitions, and the timing and uncertainty of completing these property investments and acquisitions, and uncertainties regarding future distributions to our stockholders. These and other risks, assumptions, and uncertainties are described in Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 22, 2024, which you are encouraged to read, and will be available on the SEC’s website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company assumes no obligation to, and does not currently intend to, update any forward-looking statements after the date of this press release, whether as a result of new information, future events, changes in assumptions, or otherwise.

Notice Regarding Non-GAAP Financial Measures

In addition to our reported results and net earnings per diluted share, which are financial measures presented in accordance with GAAP, this press release contains and may refer to certain non-GAAP financial measures, including Funds from Operations (“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds from Operations (“AFFO”), Net Debt, and Net Debt to Annualized Adjusted EBITDAre. We believe the use of FFO, Core FFO, and AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure, and should be considered in addition to, and not in lieu of, GAAP financial measures. We believe presenting Net Debt to Annualized Adjusted EBITDAre is useful to investors because it provides information about gross debt less cash and cash equivalents, which could be used to repay debt, compared to our performance as measured using Annualized Adjusted EBITDAre. You should not consider our Annualized Adjusted EBITDAre as an alternative to net income or cash flows from operating activities determined in accordance with GAAP. A reconciliation of non-GAAP measures to the most directly comparable GAAP financial measure and statements of why management believes these measures are useful to investors are included below.

Broadstone Net Lease, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except per share amounts)


	June 30, 2024			December 31, 2023
Assets
Accounted for using the operating method:
Land	$	773,224		$	748,529
Land improvements		324,138			328,746
Buildings and improvements		3,708,366			3,803,156
Equipment		8,248			8,265
Total accounted for using the operating method		4,813,976			4,888,696
Less accumulated depreciation		(627,871	)		(626,597	)
Accounted for using the operating method, net		4,186,105			4,262,099
Accounted for using the direct financing method		26,413			26,643
Accounted for using the sales-type method		572			572
Property under development		165,014			94,964
Investment in rental property, net		4,378,104			4,384,278
Cash and cash equivalents		18,282			19,494
Accrued rental income		153,551			152,724
Tenant and other receivables, net		2,604			1,487
Prepaid expenses and other assets		33,255			36,661
Interest rate swap, assets		56,444			46,096
Goodwill		339,769			339,769
Intangible lease assets, net		282,548			288,226
Total assets	$	5,264,557		$	5,268,735

Liabilities and equity
Unsecured revolving credit facility	$	79,096		$	90,434
Mortgages, net		77,970			79,068
Unsecured term loans, net		896,574			895,947
Senior unsecured notes, net		845,687			845,309
Accounts payable and other liabilities		42,635			47,534
Dividends payable		58,028			56,869
Accrued interest payable		14,033			5,702
Intangible lease liabilities, net		53,124			53,531
Total liabilities		2,067,147			2,074,394

Commitments and contingencies

Equity
Broadstone Net Lease, Inc. equity:
Preferred stock, $0.001 par value; 20,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $0.00025 par value; 500,000 shares authorized, 188,517 and 187,614 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		47			47
Additional paid-in capital		3,444,265			3,440,639
Cumulative distributions in excess of retained earnings		(449,893	)		(440,731	)
Accumulated other comprehensive income		60,383			49,286
Total Broadstone Net Lease, Inc. equity		3,054,802			3,049,241
Non-controlling interests		142,608			145,100
Total equity		3,197,410			3,194,341
Total liabilities and equity	$	5,264,557		$	5,268,735

Broadstone Net Lease, Inc. and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share amounts)


	For the Three Months Ended						For the Six Months Ended
	June 30, 2024			March 31, 2024			June 30, 2024			June 30, 2023
Revenues
Lease revenues, net	$	105,907		$	105,366		$	211,274		$	228,345

Operating expenses
Depreciation and amortization		37,404			37,772			75,176			80,815
Property and operating expense		5,303			5,660			10,963			10,874
General and administrative		9,904			9,432			19,336			19,899
Provision for impairment of investment in rental properties		3,852			26,400			30,252			1,473
Total operating expenses		56,463			79,264			135,727			113,061

Other income (expenses)
Interest income		649			233			882			244
Interest expense		(17,757	)		(18,578	)		(36,334	)		(41,416	)
Gain on sale of real estate		3,384			59,132			62,515			32,877
Income taxes		(531	)		(408	)		(939	)		(927	)
Other income (expenses)		748			1,696			2,443			(1,692	)
Net income		35,937			68,177			104,114			104,370
Net income attributable to non-controlling interests		(608	)		(3,063	)		(3,671	)		(5,052	)
Net income attributable to Broadstone Net Lease, Inc.	$	35,329		$	65,114		$	100,443		$	99,318

Weighted average number of common shares outstanding
Basic		187,436			187,290			187,363			186,433
Diluted		196,470			196,417			196,379			196,148
Net earnings per common share
Basic and diluted	$	0.19		$	0.35		$	0.53		$	0.53

Comprehensive income
Net income	$	35,937		$	68,177		$	104,114		$	104,370
Other comprehensive income
Change in fair value of interest rate swaps		(1,456	)		11,804			10,348			1,753
Realized loss (gain) on interest rate swaps		62			159			221			1,044
Comprehensive income		34,543			80,140			114,683			107,167
Comprehensive income attributable to non-controlling interests		(546	)		(3,600	)		(4,146	)		(5,138	)
Comprehensive income attributable to Broadstone Net Lease, Inc.	$	33,997		$	76,540		$	110,537		$	102,029

Reconciliation of Non-GAAP Measures

The following is a reconciliation of net income to FFO, Core FFO, and AFFO for the three months ended June 30, 2024 and March 31, 2024 and for the six months ended June 30, 2024 and 2023. Also presented is the weighted average number of shares of our common stock and OP Units used for the diluted per share computation:


	For the Three Months Ended						For the Six Months Ended
(in thousands, except per share data)	June 30, 2024			March 31, 2024			June 30, 2024			June 30, 2023
Net income	$	35,937		$	68,177		$	104,114		$	104,370
Real property depreciation and amortization		37,320			37,690			75,010			80,735
Gain on sale of real estate		(3,384	)		(59,132	)		(62,515	)		(32,877	)
Provision for impairment on investment in rental properties		3,852			26,400			30,252			1,473
FFO	$	73,725		$	73,135		$	146,861		$	153,701
Net write-offs of accrued rental income		—			2,556			2,556			297
Lease termination fees		—			—			—			(7,500	)
Cost of debt extinguishment		—			—			—			3
Severance and executive transition costs		24			77			99			664
Other (income) expenses1		(748	)		(1,696	)		(2,443	)		1,689
Core FFO	$	73,001		$	74,072		$	147,073		$	148,854
Straight-line rent adjustment		(5,051	)		(4,980	)		(10,031	)		(14,547	)
Adjustment to provision for credit losses		(17	)		—			(17	)		(10	)
Amortization of debt issuance costs		983			983			1,966			1,972
Amortization of net mortgage premiums		—			—			—			(78	)
Non-capitalized transaction costs		445			182			629			—
Loss on interest rate swaps and other non-cash interest expense		62			159			221			1,043
Amortization of lease intangibles		(1,095	)		(1,018	)		(2,113	)		(3,776	)
Stock-based compensation		2,073			1,475			3,548			3,031
AFFO	$	70,401		$	70,873		$	141,276		$	136,489
Diluted WASO2		196,470			196,417			196,379			196,148
Net earnings per diluted share3	$	0.19		$	0.35		$	0.53		$	0.53
FFO per diluted share3		0.37			0.37			0.74			0.78
Core FFO per diluted share3		0.37			0.38			0.74			0.76
AFFO per diluted share3		0.36			0.36			0.72			0.69

1 Amount includes $0.7 million and $1.7 million of unrealized foreign exchange gain for the three months ended June 30, 2024 and March 31, 2024, respectively, and $2.4 million and ($1.7) million of unrealized foreign exchange gain (loss) for the six months ended June 30, 2024 and June 30, 2023, respectively, primarily associated with our Canadian dollar denominated revolving borrowings.

2 Excludes 1,033,418, and 663,196 weighted average shares of unvested restricted common stock for the three months ended June 30, 2024 and March 31, 2024, respectively. Excludes 848,307, and 467,977 weighted average shares of unvested restricted common stock for the six months ended June 30, 2024 and 2023, respectively.

3 Excludes $0.3 million and $0.4 million from the numerator for the three months ended June 30, 2024 and March 31, 2024, respectively. Excludes $0.6 million and $0.3 million from the numerator for the six months ended June 30, 2024 and 2023, respectively, related to dividends paid or declared on shares of unvested restricted common stock.

Our reported results and net earnings per diluted share are presented in accordance with GAAP. We also disclose FFO, Core FFO, and AFFO, each of which are non-GAAP measures. We believe the use of FFO, Core FFO, and AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.

We compute FFO in accordance with the standards established by the Board of Governors of Nareit, the worldwide representative voice for REITs and publicly traded real estate companies with an interest in the U.S. real estate and capital markets. Nareit defines FFO as GAAP net income or loss adjusted to exclude net gains (losses) from sales of certain depreciated real estate assets, depreciation and amortization expense from real estate assets, and impairment charges related to certain previously depreciated real estate assets. FFO is used by management, investors, and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers, primarily because it excludes the effect of real estate depreciation and amortization and net gains (losses) on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions.

We compute Core Funds From Operations (“Core FFO”) by adjusting FFO, as defined by Nareit, to exclude certain GAAP income and expense amounts that we believe are infrequently recurring, unusual in nature, or not related to its core real estate operations, including write-offs or recoveries of accrued rental income, lease termination fees, cost of debt extinguishment, unrealized and realized gains or losses on foreign currency transactions, severance and executive transition costs, and other extraordinary items. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis.

We compute Adjusted Funds From Operations (“AFFO”), by adjusting Core FFO for certain revenues and expenses that are non-cash or unique in nature, including straight-line rents, amortization of lease intangibles, amortization of debt issuance costs, amortization of net mortgage premiums, non-capitalized transaction costs such as acquisition costs related to deals that failed to transact, (gain) loss on interest rate swaps and other non-cash interest expense, deferred taxes, stock-based compensation, and other specified non-cash items. We believe that excluding such items assists management and investors in distinguishing whether changes in our operations are due to growth or decline of operations at our properties or from other factors. We use AFFO as a measure of our performance when we formulate corporate goals, and is a factor in determining management compensation. We believe that AFFO is a useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by non-cash revenues or expenses.

Specific to our adjustment for straight-line rents, our leases include cash rents that increase over the term of the lease to compensate us for anticipated increases in market rental rates over time. Our leases do not include significant front-loading or back-loading of payments, or significant rent-free periods. Therefore, we find it useful to evaluate rent on a contractual basis as it allows for comparison of existing rental rates to market rental rates.

FFO, Core FFO, and AFFO may not be comparable to similarly titled measures employed by other REITs, and comparisons of our FFO, Core FFO, and AFFO with the same or similar measures disclosed by other REITs may not be meaningful.

Neither the SEC nor any other regulatory body has passed judgment on the acceptability of the adjustments to FFO that we use to calculate Core FFO and AFFO. In the future, the SEC, Nareit or another regulatory body may decide to standardize the allowable adjustments across the REIT industry and in response to such standardization we may have to adjust our calculation and characterization of Core FFO and AFFO accordingly.

The following is a reconciliation of net income to EBITDA, EBITDAre, and Adjusted EBITDAre, debt to Net Debt and Net Debt to Annualized Adjusted EBITDAre as of and for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023:


	For the Three Months Ended
(in thousands)	June 30, 2024			March 31, 2024			June 30, 2023
Net income	$	35,937		$	68,177		$	62,996
Depreciation and amortization		37,404			37,772			39,031
Interest expense		17,757			18,578			20,277
Income taxes		531			408			448
EBITDA	$	91,629		$	124,935		$	122,752
Provision for impairment of investment in rental properties		3,852			26,400			—
Gain on sale of real estate		(3,384	)		(59,132	)		(29,462	)
EBITDAre	$	92,097		$	92,203		$	93,290
Adjustment for current quarter investment activity1		1,241			—			342
Adjustment for current quarter disposition activity2		(87	)		(4,712	)		(444	)
Adjustment to exclude non-recurring and other expenses3		26			(125	)		183
Adjustment to exclude net write-offs of accrued rental income		—			2,556			—
Adjustment to exclude realized / unrealized foreign exchange (gain) loss		(748	)		(1,696	)		1,681
Adjustment to exclude cost of debt extinguishment		—			—			3
Adjusted EBITDAre	$	92,529		$	88,226		$	95,055
Estimated revenues from developments4		3,458			2,771			—
Pro Forma Adjusted EBITDAre	$	95,987		$	90,997		$	95,055
Annualized EBITDAre		368,388			368,812			373,160
Annualized Adjusted EBITDAre		370,116			352,904			380,220
Pro Forma Annualized Adjusted EBITDAre		383,948			363,988			380,220

1 Reflects an adjustment to give effect to all investments during the quarter as if they had been made as of the beginning of the quarter.

2 Reflects an adjustment to give effect to all dispositions during the quarter as if they had been sold as of the beginning of the quarter.

3 Amount includes $0.02 million of employee severance and executive transition costs for the three months ended June 30, 2024.

4 Represents estimated contractual revenues based on in-process development spend to-date.


(in thousands)	June 30, 2024			March 31, 2024			June 30, 2023
Debt
Unsecured revolving credit facility	$	79,096		$	73,820		$	122,912
Unsecured term loans, net		896,574			896,260			895,319
Senior unsecured notes, net		845,687			845,498			844,932
Mortgages, net		77,970			78,517			80,141
Debt issuance costs		7,825			8,337			9,872
Gross Debt		1,907,152			1,902,432			1,953,176
Cash and cash equivalents		(18,282	)		(221,740	)		(20,763	)
Restricted cash		(1,614	)		(1,038	)		(15,502	)
Net Debt	$	1,887,256		$	1,679,654		$	1,916,911

Leverage Ratios:
Net Debt to Annualized EBITDAre	5.1x			4.6x			5.1x
Net Debt to Annualized Adjusted EBITDAre	5.1x			4.8x			5.0x
Pro Forma Net Debt to Annualized Adjusted EBITDAre	4.9x			4.6x			5.0x

We define Net Debt as gross debt (total reported debt plus debt issuance costs) less cash and cash equivalents and restricted cash. We believe that the presentation of Net Debt to Annualized EBITDAre and Net Debt to Annualized Adjusted EBITDAre is useful to investors and analysts because these ratios provide information about gross debt less cash and cash equivalents, which could be used to repay debt, compared to our performance as measured using EBITDAre.

We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. EBITDA is a measure commonly used in our industry. We believe that this ratio provides investors and analysts with a measure of our performance that includes our operating results unaffected by the differences in capital structures, capital investment cycles and useful life of related assets compared to other companies in our industry. We compute EBITDAre in accordance with the definition adopted by Nareit, as EBITDA excluding gains (losses) from the sales of depreciable property and provisions for impairment on investment in real estate. We believe EBITDA and EBITDAre are useful to investors and analysts because they provide important supplemental information about our operating performance exclusive of certain non-cash and other costs. EBITDA and EBITDAre are not measures of financial performance under GAAP, and our EBITDA and EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider our EBITDA and EBITDAre as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

We are focused on a disciplined and targeted investment strategy, together with active asset management that includes selective sales of properties. We manage our leverage profile using a ratio of Net Debt to Annualized Adjusted EBITDAre, discussed below, which we believe is a useful measure of our ability to repay debt and a relative measure of leverage, and is used in communications with our lenders and rating agencies regarding our credit rating. As we fund new investments using our unsecured revolving credit facility, our leverage profile and Net Debt will be immediately impacted by current quarter investments. However, the full benefit of EBITDAre from new investments will not be received in the same quarter in which the properties are acquired. Additionally, EBITDAre for the quarter includes amounts generated by properties that have been sold during the quarter. Accordingly, the variability in EBITDAre caused by the timing of our investments and dispositions can temporarily distort our leverage ratios. We adjust EBITDAre (“Adjusted EBITDAre”) for the most recently completed quarter (i) to recalculate as if all investments and dispositions had occurred at the beginning of the quarter, (ii) to exclude certain GAAP income and expense amounts that are either non-cash, such as cost of debt extinguishments, realized or unrealized gains and losses on foreign currency transactions, or gains on insurance recoveries, or that we believe are one time, or unusual in nature because they relate to unique circumstances or transactions that had not previously occurred and which we do not anticipate occurring in the future, and (iii) to eliminate the impact of lease termination fees and other items, that are not a result of normal operations. While investments in property developments have an immediate impact to Net Debt, we do not make an adjustment to EBITDAre until the quarter in which the lease commences. We then annualize quarterly Adjusted EBITDAre by multiplying it by four (“Annualized Adjusted EBITDAre”). You should not unduly rely on this measure as it is based on assumptions and estimates that may prove to be inaccurate. Our actual reported EBITDAre for future periods may be significantly different from our Annualized Adjusted EBITDAre. Adjusted EBITDAre and Annualized Adjusted EBITDAre are not measurements of performance under GAAP, and our Adjusted EBITDAre and Annualized Adjusted EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider our Adjusted EBITDAre and Annualized Adjusted EBITDAre as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

Exhibit 99.2

toneet Lease, Inc. (NYSE: BNL) is a Real Estate Investment Trust (REIT) that acquires, owns, and manages single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. www.broadstone.com

Table of Contents


Section	Page
About the Data	3
Company Overview	4
Quarterly Financial Summary	5
Balance Sheet	6
Income Statement Summary	7
Funds From Operations (FFO), Core Funds From Operations (Core FFO), and Adjusted Funds From Operations (AFFO)	8
Lease Revenues Detail	9
Capital Structure	10
Equity Rollforward	11
Debt Outstanding	12
Interest Rate Swaps	13
EBITDA, EBITDAre, and Other Non-GAAP Operating Measures	14
Net Debt Metrics & Covenants	15
Debt & Swap Maturities	16
Investment Activity	17
Transitional Capital & Developments	18
Dispositions & Portfolio at a Glance: Key Metrics	19
Diversification: Tenants and Brands	20-23
Diversification: Property Type	24-25
Key Statistics by Property Type	26
Diversification: Tenant Industry	27
Diversification: Geography	28
Lease Expirations	29
Portfolio Occupancy	30
Definitions and Explanations	31-32

About the Data

This data and other information described herein are as of and for the three months ended June 30, 2024 unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with Broadstone Net Lease, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023, including the financial statements and the management’s discussion and analysis of financial condition and results of operations sections.

Forward Looking Statements

Information set forth herein contains forward-looking statements, which reflect our current views regarding our business, financial performance, growth prospects and strategies, market opportunities, and market trends. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “would be,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. All of the forward-looking statements herein are subject to various risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, performance, and achievements could differ materially from those expressed in or by the forward-looking statements and may be affected by a variety of risks and other factors. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to general economic conditions, including but not limited to increases in the rate of inflation and/or interest rates, local real estate conditions, tenant financial health, and property acquisitions and the timing of these investments and acquisitions. These and other risks, assumptions, and uncertainties are described in our filings with the SEC, which are available on the SEC’s website at www.sec.gov.

You are cautioned not to place undue reliance on any forward-looking statements included herein. All forward-looking statements are made as of the date of this document and the risk that actual results, performance, and achievements will differ materially from the expectations expressed or referenced herein will increase with the passage of time. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.

IP Disclaimer

This document contains references to copyrights, trademarks, trade names, and service marks that belong to other companies. Broadstone Net Lease is not affiliated or associated with, and is not endorsed by and does not endorse, such companies or their products or services.

Company Overview

Broadstone Net Lease, Inc. (NYSE:BNL) (the “Company”, “BNL”, “us”, “our”, and “we”) is an industrial-focused, diversified net lease real estate investment trust (“REIT”) that invests in primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. Since our inception, we have selectively invested in real estate across the industrial, restaurant, healthcare, retail, and office property types. We target properties with credit worthy tenants in industries characterized by positive business drivers and trends, where the properties are an integral part of the tenants’ businesses and there are opportunities to secure long-term net leases. Through long-term net leases, our tenants are able to retain operational control of their strategically important locations, while allocating their debt and equity capital to fund core business operations rather than real estate ownership.

    Executive Team
John D. Moragne
Chief Executive Officer and Member, Board of Directors
Ryan M. Albano
President and Chief Operating Officer
Kevin M. Fennell
Executive Vice President and Chief Financial Officer
John D. Callan, Jr.
Senior Vice President, General Counsel, and Secretary
Michael B. Caruso
Senior Vice President, Underwriting & Strategy
Timothy D. Dieffenbacher 
Senior Vice President, Chief Accounting Officer, and Treasurer
Will D. Garner
Senior Vice President, Acquisitions
Jennie L. O’Brien 
Senior Vice President, Accounting, and Controller
Molly Kelly Wiegel
Senior Vice President, Human Resources & Administration
 

     

    Board of Directors
Laurie A. Hawkes
Chairman of the Board
John D. Moragne
Chief Executive Officer
Denise Brooks-Williams
Michael A. Coke
Jessica Duran
Laura Felice
David M. Jacobstein
Shekar Narasimhan
James H. Watters
 
 

   

    Company Contact Information
Brent Maedl
Director, Corporate Finance & Investor Relations
brent.maedl@broadstone.com
585-382-8507
 
Transfer Agent
Computershare Trust Company, N.A.
150 Royall Street
Canton, Massachusetts 02021
800-736-3001

Quarterly Financial Summary

(unaudited, dollars in thousands except per share data)


	Q2 2024			Q1 2024			Q4 2023			Q3 2023			Q2 2023
Financial Summary
Investment in rental property	$	4,840,961		$	4,666,969		$	4,915,911		$	4,939,598		$	4,981,430
Less accumulated depreciation		(627,871	)		(606,225	)		(626,597	)		(601,895	)		(578,616	)
Property under development		165,014			133,064			94,964			49,819			37,449
Investment in rental property, net		4,378,104			4,193,808			4,384,278			4,387,522			4,440,263
Cash and cash equivalents		18,282			221,740			19,494			35,061			20,763
Restricted cash		1,614			1,038			1,138			15,436			15,502
Total assets		5,264,557			5,269,655			5,268,735			5,335,043			5,368,150
Unsecured revolving credit facility		79,096			73,820			90,434			74,060			122,912
Mortgages, net		77,970			78,517			79,068			79,613			80,141
Unsecured term loans, net		896,574			896,260			895,947			895,633			895,319
Senior unsecured notes, net		845,687			845,498			845,309			845,121			844,932
Total liabilities		2,067,147			2,051,951			2,074,394			2,059,570			2,106,553
Total Broadstone Net Lease, Inc. equity		3,054,802			3,073,622			3,049,241			3,120,776			3,107,536
Total equity (book value)		3,197,410			3,217,704			3,194,341			3,275,473			3,261,597

Revenues		105,907			105,366			105,000			109,543			109,353
General and administrative - other		7,831			7,957			7,982			8,603			7,944
Stock based compensation		2,073			1,475			1,401			1,540			1,539
General and administrative		9,904			9,432			9,383			10,143			9,483
Total operating expenses		56,463			79,264			84,457			54,383			53,502
Interest expense		17,757			18,578			18,972			19,665			20,277
Net income		35,937			68,177			6,797			52,145			62,996
Net earnings per common share, diluted	$	0.19		$	0.35		$	0.03		$	0.26		$	0.32

FFO		73,725			73,135			69,443			75,478			72,524
FFO per share, diluted	$	0.37		$	0.37		$	0.35		$	0.39		$	0.37
Core FFO		73,001			74,072			75,275			74,754			74,381
Core FFO per share, diluted	$	0.37		$	0.38		$	0.38		$	0.38		$	0.38
AFFO		70,401			70,873			71,278			69,958			69,004
AFFO per share, diluted	$	0.36		$	0.36		$	0.36		$	0.36		$	0.35

Net cash provided by operating activities		74,172			70,867			60,582			73,888			62,228
Capital expenditures and improvements		134			132			568			1,106			1,011
Capital expenditures and improvements - revenue generating		38			3,000			16,229			4,755			7,000
Net cash provided by (used in) investing activities		(225,708	)		204,285			(49,536	)		42,528			1,713
Net cash provided by (used in) financing activities		(51,346	)		(73,006	)		(40,911	)		(102,184	)		(46,986	)
Distributions declared		57,710			57,292			56,433			54,274			55,419
Distributions declared per diluted share	$	0.290		$	0.285		$	0.285		$	0.280		$	0.280

Balance Sheet

(unaudited, in thousands)


	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Assets
Accounted for using the operating method:
Land	$	773,224		$	724,199		$	748,529		$	752,708		$	754,402
Land improvements		324,138			316,170			328,746			330,214			332,757
Buildings and improvements		3,708,366			3,591,260			3,803,156			3,819,745			3,857,236
Equipment		8,248			8,247			8,265			9,608			9,608
Total accounted for using the operating method		4,813,976			4,639,876			4,888,696			4,912,275			4,954,003
Less accumulated depreciation		(627,871	)		(606,225	)		(626,597	)		(601,895	)		(578,616	)
Accounted for using the operating method, net		4,186,105			4,033,651			4,262,099			4,310,380			4,375,387
Accounted for using the direct financing method		26,413			26,522			26,643			26,751			26,855
Accounted for using the sales-type method		572			571			572			572			572
Property under development		165,014			133,064			94,964			49,819			37,449
Investment in rental property, net		4,378,104			4,193,808			4,384,278			4,387,522			4,440,263
Cash and cash equivalents		18,282			221,740			19,494			35,061			20,763
Accrued rental income		153,551			149,203			152,724			152,268			148,697
Tenant and other receivables, net		2,604			836			1,487			1,372			1,895
Prepaid expenses and other assets		33,255			33,149			36,661			42,309			42,322
Interest rate swap, assets		56,444			57,900			46,096			79,086			65,143
Goodwill		339,769			339,769			339,769			339,769			339,769
Intangible lease assets, net		282,548			273,250			288,226			297,656			309,298
Total assets	$	5,264,557		$	5,269,655		$	5,268,735		$	5,335,043		$	5,368,150
Liabilities and equity
Unsecured revolving credit facility	$	79,096		$	73,820		$	90,434		$	74,060		$	122,912
Mortgages, net		77,970			78,517			79,068			79,613			80,141
Unsecured term loans, net		896,574			896,260			895,947			895,633			895,319
Senior unsecured notes, net		845,687			845,498			845,309			845,121			844,932
Accounts payable and other liabilities		42,635			40,655			47,534			44,886			44,147
Dividends payable		58,028			56,871			56,869			55,770			55,640
Accrued interest payable		14,033			9,377			5,702			9,186			5,889
Intangible lease liabilities, net		53,124			50,953			53,531			55,301			57,573
Total liabilities		2,067,147			2,051,951			2,074,394			2,059,570			2,106,553
Equity
Broadstone Net Lease, Inc. equity:
Preferred stock, $0.001 par value		—			—			—			—			—
Common stock, $0.00025 par value		47			47			47			47			47
Additional paid-in capital		3,444,265			3,446,910			3,440,639			3,430,725			3,430,692
Cumulative distributions in excess of retained earnings		(449,893	)		(430,169	)		(440,731	)		(393,571	)		(391,631	)
Accumulated other comprehensive Income		60,383			56,834			49,286			83,575			68,428
Total Broadstone Net Lease, Inc. equity		3,054,802			3,073,622			3,049,241			3,120,776			3,107,536
Non-controlling interests		142,608			144,082			145,100			154,697			154,061
Total equity		3,197,410			3,217,704			3,194,341			3,275,473			3,261,597
Total liabilities and equity	$	5,264,557		$	5,269,655		$	5,268,735		$	5,335,043		$	5,368,150

Income Statement Summary

(unaudited, in thousands except per share data)


	Three Months Ended
	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Revenues
Lease revenues, net	$	105,907		$	105,366		$	105,000		$	109,543		$	109,353
Operating expenses
Depreciation and amortization		37,404			37,772			39,278			38,533			39,031
Property and operating expense		5,303			5,660			5,995			5,707			4,988
General and administrative		9,904			9,432			9,383			10,143			9,483
Provision for impairment of investment in rental properties		3,852			26,400			29,801			—			—
Total operating expenses		56,463			79,264			84,457			54,383			53,502
Other income (expenses)
Interest income		649			233			141			127			82
Interest expense		(17,757	)		(18,578	)		(18,972	)		(19,665	)		(20,277	)
Gain on sale of real estate		3,384			59,132			6,270			15,163			29,462
Income taxes		(531	)		(408	)		268			(104	)		(448	)
Other income (expenses)		748			1,696			(1,453	)		1,464			(1,674	)
Net income		35,937			68,177			6,797			52,145			62,996
Net income attributable to non-controlling interests		(608	)		(3,063	)		(319	)		(2,463	)		(2,982	)
Net income attributable to Broadstone Net Lease, Inc.	$	35,329		$	65,114		$	6,478		$	49,682		$	60,014

Weighted average number of common shares outstanding
Basic1		187,436			187,290			186,829			186,766			186,733
Diluted1		196,470			196,417			196,373			196,372			196,228
Net earnings per common share2
Basic	$	0.19		$	0.35		$	0.03		$	0.27		$	0.32
Diluted	$	0.19		$	0.35		$	0.03		$	0.26		$	0.32

1 Excludes 1,034 weighted average shares of unvested restricted common stock for the three months ended June 30, 2024.

2 Excludes $0.3 million from the numerator for the three months ended June 30, 2024, related to dividends declared on shares of unvested restricted common stock.

Funds From Operations (FFO), Core Funds From Operations (Core FFO), and Adjusted Funds From Operations (AFFO)

(unaudited, in thousands except per share data)


	Three Months Ended
	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Net income	$	35,937		$	68,177		$	6,797		$	52,145		$	62,996
Real property depreciation and amortization		37,320			37,690			39,115			38,496			38,990
Gain on sale of real estate		(3,384	)		(59,132	)		(6,270	)		(15,163	)		(29,462	)
Provision for impairment of investment in rental properties		3,852			26,400			29,801			—			—
FFO	$	73,725		$	73,135		$	69,443		$	75,478		$	72,524
Net write-offs of accrued rental income		—			2,556			4,161			—			—
Lease termination fees		—			—			—			—			—
Cost of debt extinguishment		—			—			—			—			3
Severance and executive transition costs		24			77			218			740			183
Other (income) expenses1		(748	)		(1,696	)		1,453			(1,464	)		1,671
Core FFO	$	73,001		$	74,072		$	75,275		$	74,754		$	74,381
Straight-line rent adjustment		(5,051	)		(4,980	)		(5,404	)		(6,785	)		(7,276	)
Adjustment to provision for credit losses		(17	)		—			—			—			(10	)
Amortization of debt issuance costs		983			983			983			983			986
Amortization of net mortgage premiums		—			—			—			—			(52	)
Non-capitalized transaction costs2		445			182			—			—			—
Loss on interest rate swaps and other non-cash interest expense		62			159			319			522			521
Amortization of lease intangibles		(1,095	)		(1,018	)		(1,014	)		(1,056	)		(1,085	)
Stock-based compensation		2,073			1,475			1,401			1,540			1,539
Deferred taxes		—			—			(282	)		—			—
AFFO	$	70,401		$	70,873		$	71,278		$	69,958		$	69,004

Diluted weighted average shares outstanding3		196,470			196,417			196,373			196,372			196,228
Net earnings per diluted share4	$	0.19		$	0.35		$	0.03		$	0.26		$	0.32
FFO per diluted share4		0.37			0.37			0.35			0.39			0.37
Core FFO per diluted share4		0.37			0.38			0.38			0.38			0.38
AFFO per diluted share4		0.36			0.36			0.36			0.36			0.35

1 Amount includes $0.7 million of unrealized and realized foreign exchange gain for the three months ended June 30, 2024, primarily associated with our Canadian dollar denominated revolver borrowings.

2 Includes $0.4 million of acquisition costs related to deals that failed to transact for the three months ended June 30, 2024.

3 Excludes 1,034 weighted average shares of unvested restricted common stock for the three months ended June 30, 2024.

4 Excludes $0.3 million from the numerator for the three months ended June 30, 2024, related to dividends declared on shares of unvested restricted common stock.

Lease Revenues Detail

(unaudited, in thousands)


	Three Months Ended
	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Contractual rental amounts billed for operating leases	$	95,736		$	97,549		$	97,182		$	96,333		$	96,456
Adjustment to recognize contractual operating lease billings on a straight- line basis		5,177			5,104			5,513			6,891			7,380
Net write-offs of accrued rental income		—			(2,556	)		(4,161	)		—			—
Variable rental amounts earned		659			598			971			513			452
Earned income from direct financing leases		689			682			685			687			689
Interest income from sales-type leases		15			14			15			14			15
Operating expenses billed to tenants		4,651			5,105			5,513			5,181			4,594
Other income from real estate transactions		12			66			—			19			3
Adjustment to revenue recognized for uncollectible rental amounts billed, net		(1,032	)		(1,196	)		(718	)		(95	)		(236	)
Total Lease revenues, net	$	105,907		$	105,366		$	105,000		$	109,543		$	109,353

Capital Structure

(in thousands, except per share data)


EQUITY
Shares of Common Stock		188,517
OP Units		8,801
Common Stock & OP Units		197,318
Price Per Share / Unit at June 30, 2024	$	15.87
IMPLIED EQUITY MARKET CAPITALIZATION	$	3,131,439
% of Total Capitalization		62.1	%
DEBT
Unsecured Revolving Credit Facility - 2026	$	79,096
Unsecured Term Loans		900,000
Unsecured Term Loan - 2026		400,000
Unsecured Term Loan - 2027		200,000
Unsecured Term Loan - 2029		300,000
Senior Unsecured Notes		850,000
Senior Unsecured Notes - 2027		150,000
Senior Unsecured Notes - 2028		225,000
Senior Unsecured Notes - 2030		100,000
Senior Unsecured Public Notes - 2031		375,000
Mortgage Debt - Various		78,055
TOTAL DEBT	$	1,907,151
% of Total Capitalization		37.9	%
Floating Rate Debt %		0.3	%
Fixed Rate Debt %		99.7	%
Secured Debt %		4.1	%
Unsecured Debt %		95.9	%

Total Capitalization	$	5,038,590
Less: Cash and Cash Equivalents		(18,282	)
Enterprise Value	$	5,020,308

Equity Rollforward

(in thousands)


	Shares of Common Stock			OP Units			Total Diluted Shares
Balance, January 1, 2024		187,614			8,928			196,542
Grants of restricted stock awards - employees		778			—			778
Vesting of performance-based restricted stock units – employees		44			—			44
Retirement of common shares under equity incentive plan		(71	)		—			(71	)
Forfeiture of restricted stock awards		(25	)		—			(25	)
OP unit conversion		95			(95	)		—
Balance, March 31, 2024		188,435			8,833			197,268
Grants of restricted stock awards - employees		55			—			55
Forfeiture of restricted stock awards		(5	)		—			(5	)
OP unit conversion		32			(32	)		—
Balance, June 30, 2024		188,517			8,801			197,318

Debt Outstanding

(in thousands)


	Outstanding Balance
	June 30,			December 31,
	2024			2023			Interest Rate	Maturity Date
Unsecured revolving credit facility	$	79,096		$	90,434		Applicable reference rate + 0.85%1	Mar. 20263
Unsecured term loans:
2026 Unsecured Term Loan		400,000			400,000		one-month adjusted SOFR + 1.00%2	Feb. 2026
2027 Unsecured Term Loan		200,000			200,000		one-month adjusted SOFR + 0.95%2	Aug. 2027
2029 Unsecured Term Loan		300,000			300,000		one-month adjusted SOFR + 1.25%2	Aug. 2029
Total unsecured term loans		900,000			900,000
Unamortized debt issuance costs, net		(3,426	)		(4,053	)
Total unsecured term loans, net		896,574			895,947
Senior unsecured notes:
2027 Senior Unsecured Notes - Series A		150,000			150,000		4.84%	Apr. 2027
2028 Senior Unsecured Notes - Series B		225,000			225,000		5.09%	Jul. 2028
2030 Senior Unsecured Notes - Series C		100,000			100,000		5.19%	Jul. 2030
2031 Senior Unsecured Public Notes		375,000			375,000		2.60%	Sep. 2031
Total senior unsecured notes		850,000			850,000
Unamortized debt issuance costs and original issuance discount, net		(4,313	)		(4,691	)
Total senior unsecured notes, net		845,687			845,309
Total unsecured debt, net	$	1,821,357		$	1,831,690

1 At June 30, 2024 and December 31, 2023, a balance of $6.0 million and $15.0 million, respectively was subject to the one-month SOFR. The remaining balances include $100 million CAD borrowings remeasured to $73.1 million and $75.4 million USD, respectively, which were subject to the daily simple CORRA and the one-month Canadian Dollar Offered Rate, respectively.

2 At June 30, 2024 and December 31, 2023, one-month SOFR was 5.34% and 5.35%, respectively.

3 Our unsecured revolving credit facility contains two six-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.0625% of the revolving commitments.


	Origination	Maturity
	Date	Date	Interest	June 30,			December 31,
Lender	(Month/Year)	(Month/Year)	Rate	2024			2023
Wilmington Trust National Association	Apr-19	Feb-28	4.92%	$	43,531		$	44,207
Wilmington Trust National Association	Jun-18	Aug-25	4.36%		18,506			18,725
PNC Bank	Oct-16	Nov-26	3.62%		16,018			16,241
Total mortgages					78,055			79,173
Debt issuance costs, net					(85	)		(105	)
Mortgages, net				$	77,970		$	79,068


Year of Maturity	Revolving Credit Facility		Mortgages		Term Loans		Senior Notes		Total
2024	$	—	$	1,143	$	—	$	—	$	1,143
2025		—		20,195		—		—		20,195
2026		79,096		16,843		400,000		—		495,939
2027		—		1,596		200,000		150,000		351,596
2028		—		38,278		—		225,000		263,278
Thereafter		—		—		300,000		475,000		775,000
Total	$	79,096	$	78,055	$	900,000	$	850,000	$	1,907,151

Interest Rate Swaps

(dollars in thousands)


						June 30, 2024
Counterparty	Maturity Date1	Fixed Rate2			Variable Rate Index	Notional Amount			Fair Value
Effective Swaps:
Wells Fargo Bank, N.A.	October 2024		2.72	%	daily compounded SOFR	$	15,000		$	103
Capital One, National Association	December 2024		1.58	%	daily compounded SOFR		15,000			239
Bank of Montreal	January 2025		1.91	%	daily compounded SOFR		25,000			428
Truist Financial Corporation	April 2025		2.20	%	daily compounded SOFR		25,000			553
Bank of Montreal	July 2025		2.32	%	daily compounded SOFR		25,000			670
Truist Financial Corporation	July 2025		1.99	%	daily compounded SOFR		25,000			751
Truist Financial Corporation	December 2025		2.30	%	daily compounded SOFR		25,000			911
Bank of Montreal	January 2026		1.92	%	daily compounded SOFR		25,000			1,054
Bank of Montreal	January 2026		2.05	%	daily compounded SOFR		40,000			1,611
Capital One, National Association	January 2026		2.08	%	daily compounded SOFR		35,000			1,395
Truist Financial Corporation	January 2026		1.93	%	daily compounded SOFR		25,000			1,051
Capital One, National Association	April 2026		2.68	%	daily compounded SOFR		15,000			517
Capital One, National Association	July 2026		1.32	%	daily compounded SOFR		35,000			2,216
Bank of Montreal	December 2026		2.33	%	daily compounded SOFR		10,000			509
Bank of Montreal	December 2026		1.99	%	daily compounded SOFR		25,000			1,473
Toronto-Dominion Bank	March 2027		2.46	%	one-month CDOR		14,619	3		588
Wells Fargo Bank, N.A.	April 2027		2.72	%	daily compounded SOFR		25,000			1,102
Bank of Montreal	December 2027		2.37	%	daily compounded SOFR		25,000			1,557
Capital One, National Association	December 2027		2.37	%	daily compounded SOFR		25,000			1,550
Wells Fargo Bank, N.A.	January 2028		2.37	%	daily compounded SOFR		75,000			4,665
Bank of Montreal	May 2029		2.09	%	daily compounded SOFR		25,000			2,267
Regions Bank	May 2029		2.11	%	daily compounded SOFR		25,000			2,237
Regions Bank	June 2029		2.03	%	daily compounded SOFR		25,000			2,329
U.S. Bank National Association	June 2029		2.03	%	daily compounded SOFR		25,000			2,334
Regions Bank	August 2029		2.58	%	one-month SOFR		100,000			6,462
Toronto-Dominion Bank	August 2029		2.58	%	one-month SOFR		45,000			2,946
U.S. Bank National Association	August 2029		2.65	%	one-month SOFR		15,000			932
U.S. Bank National Association	August 2029		2.58	%	one-month SOFR		100,000			6,490
U.S. Bank National Association	August 2029		1.35	%	daily compounded SOFR		25,000			3,192
Regions Bank	March 2032		2.69	%	one-month CDOR		14,619	3		931
U.S. Bank National Association	March 2032		2.70	%	one-month CDOR		14,619	3		930
Bank of Montreal	March 2034		2.81	%	one-month CDOR		29,239	4		2,082
						$	973,096		$	56,075
Forward Starting Swaps:5
Bank of Montreal	March 2030		3.80	%	daily simple SOFR	$	80,000		$	—
JPMorgan Chase Bank, N.A.	March 2030		3.79	%	daily simple SOFR		50,000			35
U.S. Bank National Association	June 2030		3.73	%	daily simple SOFR		70,000			76
Truist Financial Corporation	June 2030		3.73	%	daily simple SOFR		55,000			48
Manufacturers & Traders Trust Company	September 2030		3.71	%	daily simple SOFR		50,000			29
Regions Bank	September 2030		3.69	%	daily simple SOFR		15,000			13
Truist Financial Corporation	September 2030		3.70	%	daily simple SOFR		15,000			14
Toronto-Dominion Bank	December 2030		3.66	%	daily simple SOFR		70,000			101
Regions Bank	December 2030		3.66	%	daily simple SOFR		55,000			53
						$	460,000		$	369

Total Swaps						$	1,433,096		$	56,444

1 The weighted average maturity date of effective swaps and effective swaps and forward starting swaps combined was 3.6 years and 4.4 years, respectively, at June 30, 2024.

2 At June 30, 2024, the weighted average interest rate on all outstanding borrowings was 3.73%, inclusive of a weighted average fixed rate on effective interest rate swaps of 2.28%.

3 The contractual notional amount is $20.0 million CAD.

4 The contractual notional amount is $40.0 million CAD.

5 Forward starting swaps have effective dates that are 5 years prior to each respective maturity date.

EBITDA, EBITDAre, and Other-Non GAAP Operating Measures

(unaudited, in thousands)


	Three Months Ended
	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Net income	$	35,937		$	68,177		$	6,797		$	52,145		$	62,996
Depreciation and amortization		37,404			37,772			39,278			38,533			39,031
Interest expense		17,757			18,578			18,972			19,665			20,277
Income taxes		531			408			(268	)		104			448
EBITDA	$	91,629		$	124,935		$	64,779		$	110,447		$	122,752
Provision for impairment of investment in rental properties		3,852			26,400			29,801			—			—
Gain on sale of real estate		(3,384	)		(59,132	)		(6,270	)		(15,163	)		(29,462	)
EBITDAre	$	92,097		$	92,203		$	88,310		$	95,284		$	93,290
Adjustment for current quarter investment activity 1		1,241			—			153			26			342
Adjustment for current quarter disposition activity 2		(87	)		(4,712	)		(156	)		(400	)		(444	)
Adjustment to exclude non-recurring and other expenses 3		26			(125	)		128			740			183
Adjustment to exclude net write-offs of accrued rental income		—			2,556			4,161			—			—
Adjustment to exclude realized / unrealized foreign exchange (gain) loss		(748	)		(1,696	)		1,453			(1,433	)		1,681
Adjustment to exclude cost of debt extinguishments		—			—			—			—			3
Adjusted EBITDAre	$	92,529		$	88,226		$	94,049		$	94,217		$	95,055
Estimated revenues from developments4		3,458			2,771			—			—			—
Pro Forma Adjusted EBITDAre	$	95,987		$	90,997		$	94,049		$	94,217		$	95,055
Annualized EBITDAre	$	368,388		$	368,812		$	353,240		$	381,136		$	373,160
Annualized Adjusted EBITDAre		370,116			352,904			376,196			376,868			380,220
Pro Forma Annualized Adjusted EBITDAre		383,948			363,988			376,196			376,868			380,220

1 Reflects an adjustment to give effect to all investments during the quarter as if they had been made as of the beginning of the quarter.

2 Reflects an adjustment to give effect to all dispositions during the quarter as if they had been sold as of the beginning of the quarter.

3 Amounts include $0.02 million of employee severance and executive transition costs during the three months ended June 30, 2024.

4 Represents estimated contractual revenues based on in-process development spend to-date.


	Three Months Ended
	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Adjusted EBITDAre	$	92,529		$	88,226		$	94,049		$	94,217		$	95,055
General and administrative		9,878			9,557			9,254			9,404			9,300
Adjusted Net Operating Income ("NOI")	$	102,407		$	97,783		$	103,303		$	103,621		$	104,355
Straight-line rental revenue, net		(5,191	)		(4,929	)		(5,438	)		(6,744	)		(7,277	)
Other amortization and non-cash charges		(1,095	)		(1,018	)		(1,014	)		(1,087	)		(1,095	)
Adjusted Cash NOI	$	96,121		$	91,836		$	96,851		$	95,789		$	95,983
Annualized Adjusted NOI	$	409,628		$	391,132		$	413,212		$	414,483		$	417,420
Annualized Adjusted Cash NOI		384,484			367,344			387,404			383,157			383,932

Net Debt Metrics

(in thousands)


	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Debt
Unsecured revolving credit facility	$	79,096		$	73,820		$	90,434		$	74,060		$	122,912
Unsecured term loans, net		896,574			896,260			895,947			895,633			895,319
Senior unsecured notes, net		845,687			845,498			845,309			845,121			844,932
Mortgages, net		77,970			78,517			79,068			79,613			80,141
Debt issuance costs		7,825			8,337			8,848			9,360			9,872
Gross Debt		1,907,152			1,902,432			1,919,606			1,903,787			1,953,176
Cash and cash equivalents		(18,282	)		(221,740	)		(19,494	)		(35,061	)		(20,763	)
Restricted cash		(1,614	)		(1,038	)		(1,138	)		(15,436	)		(15,502	)
Net Debt	$	1,887,256		$	1,679,654		$	1,898,974		$	1,853,290		$	1,916,911

Leverage Ratios:
Net Debt to Annualized EBITDAre	5.1x			4.6x			5.4x			4.9x			5.1x
Net Debt to Annualized Adjusted EBITDAre	5.1x			4.8x			5.0x			4.9x			5.0x
Pro Forma Net Debt to Annualized Adjusted EBITDAre	4.9x			4.6x			5.0x			4.9x			5.0x

Covenants

The following is a summary of key financial covenants for the Company’s unsecured debt instruments. The covenants associated with the Revolving Credit Facility, Unsecured Term Loans with commercial banks, and the Series A-C Senior Unsecured Notes, are reported to the respective lenders via quarterly covenant reporting packages. The covenants associated with the 2031 Senior Unsecured Public Notes are not required to be reported externally to third parties, and are instead calculated in connection with borrowing activity and for financial reporting purposes only. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of June 30, 2024, the Company believes it is in compliance with the covenants.

    Covenants

    Required

    Revolving Credit Facility and Unsecured Term Loans

    Senior Unsecured 
Notes Series 
A, B, & C

    2031 Senior Unsecured Public Notes

Leverage ratio

≤ 0.60 to 1.00

0.32

0.33

Not Applicable

Secured indebtedness ratio

≤ 0.40 to 1.00

0.01

0.01

Not Applicable

Unencumbered coverage ratio

≥ 1.75 to 1.00

3.55

Not Applicable

Not Applicable

Fixed charge coverage ratio

≥ 1.50 to 1.00

4.65

4.65

Not Applicable

Total unsecured indebtedness to 
   total unencumbered eligible 
   property value

≤ 0.60 to 1.00

0.35

0.37

Not Applicable

    Dividends and other restricted 
   payments

    Only applicable 
in case of default

    Not Applicable

    Not Applicable

    Not Applicable

Aggregate debt ratio

≤ 0.60 to 1.00

Not Applicable

Not Applicable

0.35

Consolidated income available for 
   debt to annual debt service 
   charge

≥ 1.50 to 1.00

Not Applicable

Not Applicable

5.21

Total unencumbered assets to 
   total unsecured debt

≥ 1.50 to 1.00

Not Applicable

Not Applicable

2.88

Secured debt ratio

≤ 0.40 to 1.00

Not Applicable

Not Applicable

0.01

Debt Maturities

(dollars in millions)

The Company utilizes diversified sources of debt capital including unsecured bank debt, unsecured notes, and secured mortgages (where appropriate).

    Weighted Average Debt Maturity: 4.1 years1

   

1 Our Revolving Credit Facility reflected above assumes exercise of two six-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.0625% of the revolving commitments.

Swap Maturities

(dollars in millions)

    Weighted Average Effective Swap Maturity: 3.6 years
Weighted Average Effective & Forward Starting Swap Maturity: 4.4 years

Investment Activity

(square feet and dollars in thousands)

The following tables summarize the Company’s investment activity during 2024.


	Q2 2024			Q1 2024			YTD 2024
Acquisitions:
Number of transactions		6			—			6
Number of properties		21			—			21
Square feet		1,094			—			1,094
Acquisition price	$	165,053		$	—		$	165,053
Industrial		103,735			—			103,735
Retail		52,359			—			52,359
Restaurant		8,959			—			8,959
Initial cash capitalization rate		7.3	%		—			7.3	%
Straight-line yield		8.1	%		—			8.1	%
Weighted avg. lease term (years)		11.5			—			11.5
Weighted average annual rent increase		2.3	%		—			2.3	%

Transitional Capital:
Number of transactions		1			—			1
Investments1	$	52,200		$	—		$	52,200
Cash capitalization rate		8.0	%		—			8.0	%

Revenue generating capital expenditures:
Number of existing properties		—			1			1
Investments	$	—		$	3,000		$	3,000
Healthcare - Animal Health Services		—			3,000			3,000
Initial cash capitalization rate		—			8.0	%		8.0	%
Weighted avg. lease term (years)		—			8.0			8.0
Weighted average annual rent increase		—			2.5	%		2.5	%

Development funding opportunities:
Number of new properties		—			—			—
Total development funding opportunities		30,583			37,107			67,690

Total investments	$	247,836		$	40,107		$	287,943
Total initial cash capitalization rate2		7.3	%		8.0	%		7.3	%
Total weighted average lease term (years)2		11.5			8.0			11.4
Total weighted average annual rent increase2		2.3	%		2.5	%		2.3	%

1 Refer below for property-level statistics relating to our transitional capital investments.

2 Due to the nature of (1) transitional capital representing a contractual yield on invested capital, and (2) development funding opportunities not generating revenue during construction, these are excluded from the calculation of total capitalization rates, weighted average lease terms, and rent increases.

Transitional Capital

The following table summarizes the Company’s transitional capital investments, which are excluded from real estate investment portfolio statistics:


	Q2 2024
Transitional Capital:
Type	Preferred Equity
Investment (’000s)1		52,200
Stabilized cash capitalization rate2		8.0	%
Annualized initial cash NOI yield		7.6	%
Term (years)3		3.0
Property type	Retail Center
Underlying property metrics
Number of retail spaces		28
Rentable square footage (“SF”) (’000s)		332
Weighted avg. lease term (years)		3.6
Occupancy rate (based on SF)4		98.7	%
Quarterly rent collection		98.4	%

1 Agreement includes commitment to fund up to an additional $7.8 million of preferred capital.

2 Represents stated yield with unpaid amounts accruing with preferential payment.

3 Agreement contains two one-year extension options subject to a 0.50% extension fee. Repayment at end of term subject to a $3.5 million repayment fee.

4 Includes executed leases that have not yet commenced.

Developments5

(square feet and dollars in thousands)

The following table summarizes the Company’s developments under construction as of June 30, 2024:


Property	Property Type	Projected Rentable Square Feet	Start Date5	Target Completion Date5	Initial Purchase Price5	Estimated Project Development Costs5	Estimated Total Project Investment5	QTD Q2 2024 Investment	Cumulative Investment at 6/30/24	Estimated Cash Capitalization Rate5	Estimated Straight-line Yield5
Under Construction:
UNFI (Sarasota - FL)	Industrial	1,016	5/2023	10/2024	$17,300	$187,500	$204,800	$30,583	$161,297	7.2%	8.3%
Total		1,016			$17,300	$187,500	$204,800	$30,583	$161,297	7.2%	8.3%

5 Refer to definitions and explanations appearing at the end of this supplemental document.

Dispositions

(square feet and dollars in thousands)

The following table summarizes the Company’s property disposition activity during 2024.


Q1 2024
Property Type	Number of Properties		Square Feet		Acquisition Price		Disposition Price		Net Book Value
Healthcare		37		706	$	250,079		251,700	$	199,098
Total Properties		37		706	$	250,079	$	251,700	$	199,098
Weighted average cash cap rate										7.9	%

Q2 2024
Property Type	Number of Properties		Square Feet		Acquisition Price		Disposition Price		Net Book Value
Industrial		1		187	$	11,330	$	11,750	$	10,753
Office		1		46		11,745		2,100		3,003
Healthcare		1		34		10,000		10,500		7,620
Total Properties		3		267	$	33,075	$	24,350	$	21,376
Weighted average cash cap rate										7.3	%

2024 Dispositions
Property Type	Number of Properties		Square Feet		Acquisition Price		Disposition Price		Net Book Value
Industrial		1		187	$	11,330	$	11,750	$	10,753
Office		1		46		11,745		2,100		3,003
Healthcare		38		740		260,079		262,200		206,718
Total Properties		40		973	$	283,154	$	276,050	$	220,474
Weighted average cash cap rate										7.9	%

Portfolio at a Glance: Key Metrics


	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Properties		777			759			796			800			801
U.S. States		44			44			44			44			44
Canadian Provinces		4			4			4			4			4
Total annualized base rent	$385.5M			$374.1M			$392.2M			$390.0M			$391.0M
Total rentable square footage (“SF”)	38.5M			37.6M			38.3M			38.2M			38.5M
Tenants		207			200			220			220			221
Brands		196			188			208			208			209
Industries		53			53			53			54			54
Occupancy (based on SF)		99.3	%		99.2	%		99.4	%		99.4	%		99.4	%
Rent Collection		99.0	%		99.0	%		99.2	%		99.9	%		99.9	%
Top 10 tenant concentration		20.2	%		20.6	%		19.6	%		19.3	%		19.4	%
Top 20 tenant concentration		33.4	%		34.0	%		32.3	%		32.0	%		32.1	%
Investment grade (tenant/guarantor)		15.5	%		15.7	%		15.3	%		15.3	%		15.3	%
Financial reporting coverage1		94.8	%		95.3	%		93.8	%		93.7	%		94.2	%
Rent coverage ratio (restaurants only)	3.3x			3.3x			3.4x			3.4x			3.3x
Weighted average annual rent increases		2.0	%		2.0	%		2.0	%		2.0	%		2.0	%
Weighted average remaining lease term	10.4 years			10.6 years			10.5 years			10.5 years			10.7 years
Master leases (based on ABR)
Total portfolio		41.7	%		43.0	%		41.5	%		41.6	%		41.5	%
Multi-site tenants		71.0	%		71.0	%		69.0	%		69.3	%		69.3	%

1 Includes 8.8% related to tenants not required to provide financial information under the terms of our lease, but whose financial statements are available publicly at June 30, 2024.

Diversification: Tenants & Brands

Top 20 Tenants


Tenant	Property Type	# Properties		ABR (’000s)		ABR as a % of Total Portfolio			Square Feet (’000s)		SF as a % of Total Portfolio
Roskam Baking Company, LLC*	Food Processing		7	$	15,917		4.1	%		2,250		5.9	%
AHF, LLC*	Distribution & Warehouse/Manufacturing		8		9,612		2.5	%		2,284		5.9	%
Joseph T. Ryerson & Son, Inc	Distribution & Warehouse		11		7,780		2.0	%		1,599		4.2	%
Jack’s Family Restaurants LP*	Quick Service Restaurants		43		7,456		1.9	%		147		0.4	%
Tractor Supply Company	General Merchandise		23		6,353		1.7	%		462		1.2	%
Axcelis Technologies, Inc.	Flex and R&D		1		6,263		1.6	%		417		1.1	%
J. Alexander’s, LLC*	Casual Dining		16		6,207		1.6	%		131		0.3	%
Salm Partners, LLC*	Food Processing		2		6,168		1.6	%		426		1.1	%
Hensley & Company*	Distribution & Warehouse		3		6,109		1.6	%		577		1.5	%
Red Lobster Hospitality & Red Lobster Restaurants LLC*	Casual Dining		18		6,061		1.6	%		147		0.4	%
Total Top 10 Tenants			132	$	77,926		20.2	%		8,440		22.0	%

Dollar General Corporation	General Merchandise		60	$	5,980		1.6	%		562		1.5	%
BluePearl Holdings, LLC**	Animal Health Services		13		5,750		1.5	%		165		0.4	%
Krispy Kreme Doughnut Corporation	Quick Service Restaurants/ Food Processing		27		5,538		1.4	%		156		0.4	%
Outback Steakhouse of Florida LLC*	Casual Dining		22		5,454		1.4	%		140		0.4	%
Big Tex Trailer Manufacturing Inc.*	Automotive/Distribution & Warehouse/Manufacturing/ Corporate Headquarters		17		5,157		1.3	%		1,302		3.4	%
Jelly Belly Candy Company	Distribution & Warehouse/Food Processing/General Merchandise		5		4,650		1.2	%		576		1.5	%
Nestle’ Dreyer's Ice Cream Company1	Cold Storage		1		4,611		1.2	%		309		0.8	%
Carvana, LLC*	Industrial Services		2		4,589		1.2	%		230		0.6	%
Arkansas Surgical Hospital	Surgical		1		4,587		1.2	%		129		0.3	%
Klosterman Bakery*	Food Processing		11		4,567		1.2	%		549		1.4	%
Total Top 20 Tenants			291	$	128,809		33.4	%		12,558		32.7	%

1Nestle’s ABR excludes $1.6 million of rent paid under a sub-lease for an additional property, which will convert to a prime lease no later than August 2024

*Subject to a master lease.

**Includes properties leased by multiple tenants, some, not all, of which are subject to master leases.

Top 20 Tenant Descriptions1

Top 20 Tenant Descriptions1 (continued)

Top 20 Brands


Brand	Property Type	# Properties		ABR (’000s)		ABR as a % of Total Portfolio			Square Feet (’000s)		SF as a % of Total Portfolio
Roskam Baking Company, LLC*	Food Processing		7	$	15,917		4.1	%		2,250		5.9	%
AHF Products*	Distribution & Warehouse/ Manufacturing		8		9,612		2.5	%		2,284		5.9	%
Ryerson	Distribution & Warehouse		11		7,780		2.0	%		1,599		4.2	%
Jack's Family Restaurants*	Quick Service Restaurants		43		7,456		1.9	%		147		0.4	%
Tractor Supply Company	General Merchandise		23		6,353		1.7	%		462		1.2	%
Axcelis	Flex and R&D		1		6,263		1.6	%		417		1.1	%
Salm Partners, LLC*	Food Processing		2		6,168		1.6	%		426		1.1	%
Hensley*	Distribution & Warehouse		3		6,109		1.6	%		577		1.5	%
Red Lobster*	Casual Dining		18		6,061		1.6	%		147		0.4	%
Dollar General	General Merchandise		60		5,980		1.6	%		561		1.4	%
Total Top 10 Brands			176	$	77,699		20.2	%		8,870		23.1	%

BluePearl Veterinary Partners**	Animal Health Services		13	$	5,750		1.5	%		165		0.4	%
Bob Evans Farms*	Casual Dining/Food Processing		21		5,568		1.4	%		281		0.7	%
Krispy Kreme	Quick Service Restaurants/ Food Processing		27		5,538		1.4	%		156		0.4	%
Big Tex Trailers*	Automotive/Distribution & Warehouse/Manufacturing/ Corporate Headquarters		17		5,157		1.3	%		1,302		3.4	%
Outback Steakhouse*	Casual Dining		20		4,718		1.3	%		126		0.3	%
Jelly Belly	Distribution & Warehouse/Food Processing/General Merchandise		5		4,650		1.2	%		576		1.5	%
Nestle’1	Cold Storage		1		4,611		1.2	%		309		0.8	%
Carvana*	Industrial Services		2		4,590		1.2	%		230		0.6	%
Arkansas Surgical Hospital	Surgical		1		4,587		1.2	%		129		0.3	%
Klosterman Bakery*	Food Processing		11		4,567		1.2	%		550		1.5	%
Total Top 20 Brands			294	$	127,435		33.1	%		12,694		33.0	%

1Nestle’s ABR excludes $1.6 million of rent paid under a sub-lease for an additional property, which will convert to a prime lease no later than August 2024

*Subject to a master lease.

**Includes properties leased by multiple tenants, some, not all, of which are subject to master leases.

Diversification: Property Type

(rent percentages based on ABR)

Diversification: Property Type (continued)


Property Type	# Properties		ABR (’000s)		ABR as a % of Total Portfolio			Square Feet (’000s)		SF as a % of Total Portfolio
Industrial
Manufacturing		79	$	65,334		16.9	%		12,094		31.5	%
Distribution & Warehouse		48		55,025		14.3	%		9,521		24.8	%
Food Processing		34		49,202		12.8	%		5,736		14.9	%
Flex and R&D		6		16,199		4.2	%		1,157		3.0	%
Industrial Services		29		14,659		3.8	%		725		1.9	%
Cold Storage		4		9,977		2.6	%		723		1.9	%
Untenanted		2		—		—			197		0.4	%
Industrial Total		202		210,396		54.6	%		30,153		78.4	%
Restaurant
Casual Dining		102		27,604		7.2	%		674		1.8	%
Quick Service Restaurants		151		26,382		6.8	%		514		1.3	%
Restaurant Total		253		53,986		14.0	%		1,188		3.1	%
Healthcare
Healthcare Services		28		11,842		3.1	%		462		1.2	%
Animal Health Services		27		11,208		2.9	%		405		1.1	%
Clinical		19		9,640		2.5	%		425		1.1	%
Surgical		7		8,486		2.2	%		256		0.7	%
Life Science		8		7,673		2.0	%		519		1.3	%
Untenanted		1		—		—			14		—
Healthcare Total		90		48,849		12.7	%		2,081		5.4	%
Retail
General Merchandise		137		28,736		7.4	%		2,118		5.5	%
Automotive		65		12,045		3.1	%		764		2.0	%
Home Furnishings		13		7,265		1.9	%		797		2.0	%
Child Care		2		726		0.2	%		21		0.1	%
Retail Total		217		48,772		12.6	%		3,700		9.6	%
Office
Strategic Operations		6		10,880		2.8	%		632		1.6	%
Corporate Headquarters		7		8,553		2.2	%		409		1.1	%
Call Center		2		4,049		1.1	%		287		0.8	%
Office Total		15		23,482		6.1	%		1,328		3.5	%
Total		777	$	385,485		100.0	%		38,450		100.0	%

Key Statistics by Property Type


	Q2 2024			Q1 2024			Q4 2023			Q3 2023			Q2 2023
Industrial
Number of properties		202			192			192			193			195
Square feet (000s)		30,153			29,500			29,442			29,387			29,686
Weighted average lease term (years)		11.2			11.5			11.7			11.5			11.8
Weighted average annual rent escalation		2.0	%		2.0	%		2.0	%		2.0	%		2.0	%
Percentage of total ABR		54.6	%		54.2	%		51.5	%		51.2	%		51.6	%

Restaurant
Number of properties		253			248			248			248			247
Square feet (000s)		1,188			1,164			1,164			1,172			1,172
Weighted average lease term (years)		13.3			13.6			13.9			13.9			14.1
Weighted average annual rent escalation		1.8	%		1.8	%		1.8	%		1.8	%		1.8	%
Percentage of total ABR		14.0	%		14.2	%		13.6	%		13.7	%		13.5	%

Healthcare
Number of properties		90			92			129			129			129
Square feet (000s)		2,081			2,146			2,852			2,851			2,852
Weighted average lease term (years)		7.3			7.2			6.6			6.8			6.8
Weighted average annual rent escalation		2.4	%		2.4	%		2.4	%		2.4	%		2.3	%
Percentage of total ABR		12.7	%		13.4	%		17.6	%		17.6	%		17.5	%

Retail
Number of properties		217			211			211			214			214
Square feet (000s)		3,700			3,439			3,439			3,455			3,455
Weighted average lease term (years)		9.3			9.1			9.4			9.7			10.0
Weighted average annual rent escalation		1.3	%		1.3	%		1.6	%		1.6	%		1.6	%
Percentage of total ABR		12.6	%		11.9	%		11.4	%		11.6	%		11.6	%

Office
Number of properties		15			16			16			16			16
Square feet (000s)		1,328			1,374			1,374			1,375			1,374
Weighted average lease term (years)		5.1			5.3			5.3			5.6			5.9
Weighted average annual rent escalation		2.5	%		2.5	%		2.5	%		2.5	%		2.5	%
Percentage of total ABR		6.1	%		6.3	%		5.9	%		5.9	%		5.8	%

Diversification: Tenant Industry


Industry	# Properties		ABR (’000s)		ABR as a % of Total Portfolio			Square Feet (’000s)		SF as a % of Total Portfolio
Restaurants		256	$	54,827		14.2	%		1,231		3.2	%
Packaged Foods & Meats		34		45,974		11.9	%		5,347		13.9	%
Healthcare Facilities		65		34,900		9.1	%		1,307		3.4	%
Distributors		35		17,930		4.7	%		1,561		4.1	%
Auto Parts & Equipment		27		17,593		4.6	%		2,757		7.2	%
Food Distributors		45		16,518		4.3	%		2,888		7.5	%
Specialty Stores		8		14,545		3.8	%		1,712		4.5	%
Home Furnishing Retail		18		12,914		3.3	%		1,858		4.8	%
Specialized Consumer Services		46		12,082		3.1	%		716		1.9	%
Metal & Glass Containers		8		10,578		2.7	%		2,206		5.7	%
General Merchandise Stores		96		9,807		2.5	%		880		2.3	%
Industrial Machinery		20		9,793		2.5	%		1,949		5.1	%
Healthcare Services		18		9,766		2.5	%		515		1.3	%
Forest Products		8		9,612		2.5	%		2,284		5.9	%
Electronic Components		2		7,112		1.8	%		466		1.2	%
Other (38 industries)		88		101,534		26.5	%		10,506		27.3	%
Untenanted properties		3		—		—			267		0.7	%
Total		777	$	385,485		100.0	%		38,450		100.0	%

Diversification: Geography

(rent percentages based on ABR)


State / Province	# Properties		ABR (’000s)		ABR as a % of Total Portfolio			Square Feet (’000s)		SF as a % of Total Portfolio			State / Province	# Properties		ABR (’000s)		ABR as a % of Total Portfolio			Square Feet (’000s)		SF as a % of Total Portfolio
TX		67	$	36,578		9.5	%		3,615		9.4	%	MS		12	$	4,072		1.1	%		607		1.6	%
MI		54		32,805		8.5	%		3,799		9.9	%	LA		5		3,942		1.0	%		211		0.5	%
CA		18		24,334		6.4	%		2,294		6.0	%	SC		15		3,854		1.0	%		340		0.9	%
IL		29		22,625		5.9	%		2,364		6.1	%	NE		6		3,286		0.9	%		509		1.3	%
WI		30		19,435		5.0	%		1,945		5.1	%	WA		14		3,242		0.8	%		148		0.4	%
OH		47		16,471		4.3	%		1,582		4.1	%	IA		4		2,869		0.7	%		622		1.6	%
MN		21		15,801		4.1	%		2,500		6.5	%	NM		9		2,802		0.7	%		107		0.3	%
FL		38		15,149		3.9	%		789		2.1	%	CO		4		2,545		0.7	%		126		0.3	%
TN		48		15,037		3.9	%		1,084		2.8	%	UT		3		2,492		0.6	%		280		0.7	%
IN		28		14,824		3.8	%		1,832		4.8	%	MD		3		2,230		0.6	%		205		0.5	%
AL		52		12,215		3.2	%		863		2.2	%	CT		2		1,892		0.5	%		55		0.1	%
AZ		8		12,085		3.2	%		895		2.3	%	ND		3		1,726		0.4	%		48		0.1	%
GA		33		11,966		3.1	%		1,576		4.1	%	MT		7		1,602		0.4	%		43		0.1	%
NC		28		10,451		2.7	%		1,038		2.7	%	DE		4		1,180		0.3	%		133		0.3	%
PA		22		9,900		2.6	%		1,836		4.8	%	VT		2		432		0.1	%		24		0.1	%
KY		23		9,091		2.4	%		927		2.4	%	WY		1		307		0.1	%		21		0.1	%
OK		25		8,934		2.3	%		1,006		2.6	%	NV		1		273		0.1	%		6		0.0	%
MO		19		8,919		2.3	%		1,260		3.3	%	OR		1		136		0.0	%		9		0.0	%
AR		11		7,905		2.1	%		283		0.7	%	SD		1		81		0.0	%		9		0.0	%
MA		3		6,686		1.7	%		444		1.2	%	Total U.S.		770	$	377,367		97.9	%		38,020		98.8	%
NY		24		6,631		1.7	%		514		1.3	%	BC		2	$	4,769		1.3	%		253		0.7	%
KS		10		5,544		1.4	%		643		1.7	%	ON		3		2,045		0.5	%		101		0.3	%
WV		17		5,075		1.3	%		884		2.3	%	AB		1		961		0.2	%		51		0.1	%
VA		15		5,030		1.3	%		178		0.5	%	MB		1		343		0.1	%		25		0.1	%
NJ		3		4,913		1.3	%		366		1.0	%	Total Canada		7	$	8,118		2.1	%		430		1.2	%
													Grand Total		777	$	385,485		100.0	%		38,450		100.0	%

Lease Expirations

(rent percentages based on ABR)


Expiration Year	# of Properties		ABR ('000s)		ABR as a % of Total Portfolio			Square Feet ('000s)		SF as a % of Total Portfolio
2024		1	$	2,468		0.6	%		217		0.6	%
2025		17		6,071		1.6	%		358		0.9	%
2026		25		13,995		3.6	%		1,017		2.6	%
2027		29		25,569		6.6	%		2,257		5.9	%
2028		29		20,003		5.2	%		1,805		4.7	%
2029		64		20,368		5.3	%		2,679		7.0	%
2030		93		49,180		12.8	%		4,822		12.5	%
2031		32		8,199		2.1	%		786		2.0	%
2032		62		32,634		8.5	%		3,469		9.0	%
2033		51		20,055		5.2	%		1,598		4.2	%
2034		36		9,880		2.6	%		957		2.5	%
2035		19		13,779		3.6	%		2,021		5.3	%
2036		90		29,682		7.7	%		2,894		7.5	%
2037		24		20,505		5.3	%		1,578		4.1	%
2038		39		13,886		3.6	%		1,226		3.2	%
2039		10		7,385		1.9	%		741		1.9	%
2040		31		5,987		1.6	%		312		0.8	%
2041		39		16,728		4.3	%		1,367		3.6	%
2042		58		44,131		11.4	%		4,803		12.5	%
2043		13		14,320		3.7	%		944		2.5	%
Thereafter		12		10,660		2.8	%		2,332		6.0	%
Total leased properties		774		385,485		100.0	%		38,183		99.3	%
Untenanted properties		3		—		—			267		0.7	%
Total properties		777	$	385,485		100.0	%		38,450		100.0	%

Occupancy

Occupancy by Rentable Square Footage

Change in Occupancy


	Number of properties
Vacant properties at January 1, 2024		2
Lease expirations1		3
Leasing activities		(2	)
Vacant dispositions		—
Vacant properties at March 31, 2024		3
Lease expirations1		1
Leasing activities		—
Vacant dispositions		(1	)
Vacant properties at June 30, 2024		3

1 Includes scheduled and unscheduled expirations (including leases rejected in bankruptcy), as well as future expirations resolved and effective in the periods indicated above.

Definitions and Explanations

Adjusted NOI, Annualized Adjusted NOI, Adjusted Cash NOI and Annualized Adjusted Cash NOI: Our reported results and net earnings per diluted share are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). Adjusted NOI and Adjusted Cash NOI are non-GAAP financial measures that we believe are useful to assess property-level performance. We compute Adjusted NOI by adjusting Adjusted EBITDAre (defined below) to exclude general and administrative expenses incurred at the corporate level. Given the net lease nature of our portfolio, we do not incur general and administrative expenses at the property level. To compute Adjusted Cash NOI, we adjust Adjusted NOI to exclude non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash items, based on an estimate calculated as if all investment and disposition activity that took place during the quarter had occurred on the first day of the quarter. We then annualize quarterly Adjusted NOI and Adjusted Cash NOI by multiplying each amount by four to compute Annualized Adjusted NOI and Annualized Adjusted Cash NOI, respectively, which are also non-GAAP financial measures. We believe Adjusted NOI and Adjusted Cash NOI provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis. We believe that the exclusion of certain non-cash revenues and expenses from Adjusted Cash NOI is a useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by non-cash revenues or expenses. You should not unduly rely on Annualized Adjusted NOI and Annualized Adjusted Cash NOI as they are based on assumptions and estimates that may prove to be inaccurate. Our actual reported Adjusted NOI and Adjusted Cash NOI for future periods may be significantly different from our Annualized Adjusted NOI and Annualized Adjusted Cash NOI. Additionally, our computation of Adjusted NOI and Adjusted Cash NOI may differ from the methodology for calculating these metrics used by companies in our industry, and, therefore, may not be comparable to similarly titled measures reported by other companies.

Adjusted Secured Overnight Financing Rate (SOFR): We define Adjusted SOFR as the current one month term SOFR plus an adjustment of 0.10% per the terms of our credit facilities.

Annualized Base Rent (ABR): We define ABR as the annualized contractual cash rent due for the last month of the reporting period, excluding the impacts of short-term rent deferrals, abatements, or free rent, and adjusted to remove rent from properties sold during the month and to include a full month of contractual cash rent for investments made during the month.

Cash Capitalization Rate: Cash Capitalization Rate represents either (1) for acquisitions and new developments, the estimated first year cash yield to be generated on a real estate investment, which was estimated at the time of investment based on the contractually specified cash base rent for the first full year after the date of the investment, divided by the purchase price for the property excluding capitalized acquisitions costs, or (2) for dispositions, the estimated cash yield to be generated based on a property’s ABR in effect immediately prior to the disposition, divided by the disposition price, or (3) for transitional capital, the contractual cash yield to be generated on total invested capital.

EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre: EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre are non-GAAP financial measures. We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. EBITDA is a measure commonly used in our industry. We believe that this ratio provides investors and analysts with a measure of our performance that includes our operating results unaffected by the differences in capital structures, capital investment cycles and useful life of related assets compared to other companies in our industry. We compute EBITDAre in accordance with the definition adopted by Nareit. Nareit defines EBITDAre as EBITDA excluding gains (loss) from the sales of depreciable property and provisions for impairment on investment in real estate. We believe EBITDA and EBITDAre are useful to investors and analysts because they provide important supplemental information about our operating performance exclusive of certain non-cash and other costs. Adjusted EBITDAre represents EBITDAre, adjusted to reflect revenue producing investments and dispositions for the quarter as if such investments and dispositions had occurred at the beginning of the quarter, and to exclude certain GAAP income and expense amounts that are either non-cash, such as cost of debt extinguishments, realized or unrealized gains and losses on foreign currency transactions, or gains on insurance recoveries, or that we believe are one time, or unusual in nature because they relate to unique circumstances or transactions that had not previously occurred and which we do not anticipate occurring in the future, and to eliminate the impact of lease termination fees, and other items that are not a result of normal operations. While investments in developments have an immediate impact to Net Debt, we do not make an adjustment to EBITDAre until the quarter in which the lease commences. We then annualize quarterly Adjusted EBITDAre by multiplying it by four to compute Annualized Adjusted EBITDAre. Our reported EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider these measures as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

Funds From Operations (FFO), Core Funds From Operations (Core FFO), and Adjusted Funds From Operations (AFFO): FFO, Core FFO, and AFFO are non-GAAP measures. We believe the use of FFO, Core FFO, and AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute Core FFO by adjusting FFO to exclude certain GAAP income and expense amounts that we believe are infrequently recurring, unusual in nature, or not related to its core real estate operations, including write-offs or recoveries of accrued rental income, lease termination fees, the gain on insurance recoveries, cost of debt extinguishments, unrealized and realized gains or losses on foreign currency transactions, severance and executive transition costs, and other extraordinary items. We compute AFFO by adjusting Core FFO for certain revenues and expenses that are non-cash or unique in nature, including straight-line rents, amortization of lease intangibles, amortization of debt issuance costs, amortization of net mortgage premiums, non-capitalized transaction costs such as acquisition costs related to deals that failed to transact, (gain) loss on interest rate swaps and other non-cash interest expense, deferred taxes, stock-based compensation, and other specified non-cash items.

Definitions and Explanations (continued)

Gross Debt: We define Gross Debt as total debt plus debt issuance costs and original issuance discount.

Net Debt: Net Debt is a non-GAAP financial measure. We define Net Debt as our Gross Debt less cash and cash equivalents and restricted cash.

Occupancy: Occupancy or a specified percentage of our portfolio that is “occupied” or “leased” means as of a specified date the quotient of (1) the total rentable square footage of our properties minus the square footage of our properties that are vacant and from which we are not receiving any rental payment, and (2) the total square footage of our properties.

Rent Coverage Ratio: Rent Coverage Ratio means the ratio of tenant-reported or, when available, management’s estimate, based on tenant-reported financial information, of annual earnings before interest, taxes, depreciation, amortization, and cash rent attributable to the leased property (or properties, in the case of a master lease) to the annualized base rental obligation as of a specified date.

Same Store Pool: For purposes of determining properties used to calculate our same store rental revenue, all properties that we owned for the entire year-to-date period for both current and prior year are included except for properties during the current or prior year that were:

•

Vacant at any time; or

•

Under development or invested in through revenue generating capital expenditures

Same Store Rental Revenue: Same Store Rental Revenue represents cash base rents, net of uncollectible amounts, and excludes the amortization of above/below market leases, straight-line rent, operating expenses billed to tenants, net write-offs of accrued rental income, and other income from real estate transactions for properties included in our Same Store Pool.

Straight-line Yield: Straight-line yield represents the estimated first year yield to be generated on a real estate investment, which was computed at the time of investment based on the straight-line annual rental income computed in accordance with GAAP, divided by the purchase price, excluding capitalized costs for the property. For developments, we include capitalized interest in the denominator for cash interest paid.

Definitions Related to Development Properties:

•

Completion Date: The month in which the development was fully completed and was made available for occupancy.

•

Initial Purchase Price: Initial Purchase Price represents the initial contractual price of the property, typically representing purchase of undeveloped land or properties, including closing costs.

•

Estimated Project Development Costs: Represents the estimated costs to be incurred to complete development of each project. We expect to update our estimates upon completion of the project, or sooner if there are any significant changes to expected costs from quarter to quarter. Excludes capitalized costs consisting of capitalized interest and other acquisition costs.

•

Estimated Total Project Investment: Represents the sum of the Initial Purchase Price and the Estimated Project Development Costs.

•

Estimated Cash Capitalization Rate: Calculated by dividing the estimated first year cash yield to be generated on a real estate investment by the Estimated Total Project Investment for the property.

•

Start Date: The Start Date represents the period in which we have begun physical construction on a property.

•

Target Completion Date: The Target Completion Date is our current estimate of the period in which we will have substantially completed a project and the project is made available for occupancy. We expect to update our timing estimates on a quarterly basis.

Document And Entity Information	Jul. 30, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 30, 2024
Entity Registrant Name	BROADSTONE NET LEASE, INC.
Entity Central Index Key	0001424182
Entity Emerging Growth Company	false
Entity File Number	001-39529
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	26-1516177
Entity Address, Address Line One	207 High Point Drive
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Victor
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	14564
City Area Code	585
Local Phone Number	287-6500
Entity Information, Former Legal or Registered Name	N/A
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.00025 par value
Trading Symbol	BNL
Security Exchange Name	NYSE

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