Broadstone Net Lease Announces Third Quarter 2024 Results
Broadstone Net Lease (BNL) reported its Q3 2024 results with net income of $37.3 million ($0.19 per share) and AFFO of $70.2 million ($0.35 per share). The company invested $93.9 million during Q3, including $69.3 million in new property acquisitions and $24.6 million in development fundings. The portfolio was 99.0% leased with a 99.1% rent collection rate. BNL completed its healthcare portfolio simplification, reducing healthcare exposure to less than 10% of ABR. The company maintains its 2024 AFFO guidance of $1.41-$1.43 per diluted share, with planned investments between $400-600 million and dispositions between $350-450 million.
Broadstone Net Lease (BNL) ha riportato i risultati del Q3 2024 con un reddito netto di 37,3 milioni di dollari (0,19 dollari per azione) e AFFO di 70,2 milioni di dollari (0,35 dollari per azione). L'azienda ha investito 93,9 milioni di dollari durante il Q3, di cui 69,3 milioni in nuove acquisizioni immobiliari e 24,6 milioni in finanziamenti per lo sviluppo. Il portafoglio era affittato al 99,0% con un tasso di riscossione degli affitti del 99,1%. BNL ha completato la semplificazione del proprio portafoglio sanitario, riducendo l'esposizione sanitaria a meno del 10% dell'ABR. L'azienda mantiene la sua previsione di AFFO per il 2024 di 1,41-1,43 dollari per azione diluita, con investimenti pianificati tra 400-600 milioni di dollari e cessioni tra 350-450 milioni di dollari.
Broadstone Net Lease (BNL) reportó sus resultados del Q3 2024 con un ingreso neto de 37.3 millones de dólares (0.19 dólares por acción) y un AFFO de 70.2 millones de dólares (0.35 dólares por acción). La empresa invirtió 93.9 millones de dólares durante el Q3, incluyendo 69.3 millones en nuevas adquisiciones de propiedades y 24.6 millones en fondos de desarrollo. La cartera estaba arrendada al 99.0% con una tasa de cobro de rentas del 99.1%. BNL completó la simplificación de su cartera de atención médica, reduciendo la exposición a salud a menos del 10% del ABR. La empresa mantiene su guía de AFFO para 2024 de 1.41-1.43 dólares por acción diluida, con inversiones planificadas entre 400-600 millones y desinversiones entre 350-450 millones.
Broadstone Net Lease (BNL)는 2024년 3분기 결과로 3천7백30만 달러(주당 0.19달러)의 순이익과 7천20만 달러(주당 0.35달러)의 AFFO를 보고했습니다. 회사는 3분기 동안 9천390만 달러를 투자했으며, 이 중 6천930만 달러는 신규 부동산 인수에, 2천460만 달러는 개발 자금 지원에 사용되었습니다. 포트폴리오는 99.0% 임대되고 있으며 임대료 수취율은 99.1%입니다. BNL은 헬스케어 포트폴리오 단순화를 완료하고, 헬스케어 노출을 ABR의 10% 미만으로 줄였습니다. 회사는 2024년 AFFO 가이던스를 주당 1.41-1.43달러로 유지하며, 계획된 투자액은 4억에서 6억 달러 사이, 자산 매각액은 3억 5천만에서 4억 5천만 달러 사이입니다.
Broadstone Net Lease (BNL) a annoncé ses résultats pour le T3 2024 avec un revenu net de 37,3 millions de dollars (0,19 dollar par action) et un AFFO de 70,2 millions de dollars (0,35 dollar par action). L'entreprise a investi 93,9 millions de dollars au T3, dont 69,3 millions pour de nouvelles acquisitions immobilières et 24,6 millions pour des financements de développement. Le portefeuille était loué à 99,0 % avec un taux de recouvrement des loyers de 99,1 %. BNL a terminé la simplification de son portefeuille de santé, réduisant son exposition à la santé à moins de 10 % de l'ABR. L'entreprise maintient sa prévision d'AFFO pour 2024 entre 1,41 et 1,43 dollars par action diluée, avec des investissements prévus entre 400 et 600 millions de dollars et des cessions entre 350 et 450 millions de dollars.
Broadstone Net Lease (BNL) berichtete über die Q3 2024 Ergebnisse mit einem Nettogewinn von 37,3 Millionen US-Dollar (0,19 US-Dollar pro Aktie) und einem AFFO von 70,2 Millionen US-Dollar (0,35 US-Dollar pro Aktie). Das Unternehmen investierte im Q3 93,9 Millionen US-Dollar, einschließlich 69,3 Millionen US-Dollar in neue Immobilienakquisitionen und 24,6 Millionen US-Dollar in Entwicklungsfinanzierungen. Das Portfolio war zu 99,0 % vermietet, mit einer Mietinkassoquote von 99,1 %. BNL schloss die Vereinfachung seines Gesundheitsportfolios ab und reduzierte seine Gesundheitsaussetzung auf weniger als 10 % des ABR. Das Unternehmen hält an der AFFO-Prognose für 2024 von 1,41-1,43 US-Dollar je verwässerte Aktie fest, mit geplanten Investitionen zwischen 400-600 Millionen US-Dollar und Veräußerungen zwischen 350-450 Millionen US-Dollar.
- Portfolio occupancy rate of 99.0% with 99.1% rent collection rate
- New property acquisitions achieved 7.2% weighted average initial cash capitalization rate
- $418.8 million in committed build-to-suit development pipeline
- Strong balance sheet with $874.5 million available on credit facility
- Successfully reduced healthcare exposure to less than 10% of ABR
- Revenue declined to $108.4M in Q3 2024 from $109.5M in Q3 2023
- Net income decreased to $37.3M ($0.19/share) from $52.1M ($0.26/share) year-over-year
- AFFO per share decreased to $0.35 from $0.36 in Q3 2023
- Reduced investment guidance range upper limit from $700M to $600M
Insights
The Q3 2024 results showcase solid operational performance with several key developments. The company invested
Notable highlights include the substantial completion of the UNFI build-to-suit project generating a
The balance sheet remains healthy with a Net Debt to Adjusted EBITDAre ratio of 5.0x and ample liquidity of
The development pipeline shows strong momentum with
The portfolio transformation through strategic dispositions (
MANAGEMENT COMMENTARY
“We came into 2024 with two primary objectives: execute on our healthcare portfolio simplification strategy and build a strong pipeline focused on our differentiated core building blocks of growth. With the successful sale of the latest tranche of our clinical assets bringing our total healthcare exposure to less than
THIRD QUARTER 2024 HIGHLIGHTS
INVESTMENT ACTIVITY |
|
OPERATING RESULTS |
|
CAPITAL MARKETS ACTIVITY |
|
SUMMARIZED FINANCIAL RESULTS
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
||||||||||||||
(in thousands, except per share data) |
|
September 30,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
|||||
Revenues |
|
$ |
108,397 |
|
|
$ |
105,907 |
|
|
$ |
109,543 |
|
|
$ |
319,670 |
|
|
$ |
337,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income, including non-controlling interests |
|
$ |
37,268 |
|
|
$ |
35,937 |
|
|
$ |
52,145 |
|
|
$ |
141,382 |
|
|
$ |
156,515 |
|
Net earnings per share – diluted |
|
$ |
0.19 |
|
|
$ |
0.19 |
|
|
$ |
0.26 |
|
|
$ |
0.72 |
|
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
FFO |
|
$ |
73,818 |
|
|
$ |
73,725 |
|
|
$ |
75,478 |
|
|
$ |
220,679 |
|
|
$ |
229,179 |
|
FFO per share |
|
$ |
0.37 |
|
|
$ |
0.37 |
|
|
$ |
0.39 |
|
|
$ |
1.12 |
|
|
$ |
1.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Core FFO |
|
$ |
73,971 |
|
|
$ |
73,001 |
|
|
$ |
74,754 |
|
|
$ |
221,045 |
|
|
$ |
223,608 |
|
Core FFO per share |
|
$ |
0.37 |
|
|
$ |
0.37 |
|
|
$ |
0.38 |
|
|
$ |
1.12 |
|
|
$ |
1.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
AFFO |
|
$ |
70,185 |
|
|
$ |
70,401 |
|
|
$ |
69,958 |
|
|
$ |
211,460 |
|
|
$ |
206,446 |
|
AFFO per share |
|
$ |
0.35 |
|
|
$ |
0.36 |
|
|
$ |
0.36 |
|
|
$ |
1.08 |
|
|
$ |
1.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted Weighted Average Shares Outstanding |
|
|
196,932 |
|
|
|
196,470 |
|
|
|
196,372 |
|
|
|
196,799 |
|
|
|
196,282 |
|
FFO, Core FFO, and AFFO are measures that are not calculated in accordance with accounting principles generally accepted in
REAL ESTATE PORTFOLIO UPDATE
As of September 30, 2024, we owned a diversified portfolio of 773 individual net leased commercial properties with 766 properties located in 44 U.S. states and seven properties located in four Canadian provinces, comprising approximately 39.7 million rentable square feet of operational space. As of September 30, 2024, all but three of our properties were subject to a lease, and our properties were occupied by 203 different commercial tenants, with no single tenant accounting for more than
In connection with our previously announced portfolio sale of 15 clinically-oriented healthcare properties, we completed the second of two tranches for
Following the closing of the second tranche of the portfolio sale, our healthcare dispositions total
DEVELOPMENT FUNDING COMMITMENTS
As of the date of this release, we have secured the land and started construction on two build-to-suit development opportunities for Sierra Nevada Corporation. These build-to-suit developments represent
(unaudited, in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Property |
|
Property Type |
|
Projected Rentable Square Feet |
|
|
Start Date |
|
Target Completion Date |
|
Estimated Total Project Investment |
|
|
Cumulative Investment at 10/30/2024 |
|
Estimated Cash Capitalization Rate |
|
Estimated Straight-line Yield1 |
|
|||||
Sierra |
|
Industrial |
|
|
122 |
|
|
10/2024 |
|
12/2025 |
|
$ |
58,563 |
|
|
$ |
649 |
|
|
7.6 |
% |
|
9.5 |
% |
Sierra |
|
Industrial |
|
|
122 |
|
|
10/2024 |
|
5/2026 |
|
|
55,525 |
|
|
|
628 |
|
|
7.7 |
% |
|
9.7 |
% |
UNFI
|
|
Industrial |
|
|
1,016 |
|
|
05/2023 |
|
Substantially Completed |
|
|
204,833 |
|
|
|
190,239 |
|
|
7.2 |
% |
|
8.6 |
% |
Total |
|
|
|
|
1,260 |
|
|
|
|
|
|
$ |
318,921 |
|
|
$ |
191,516 |
|
|
|
|
|
1 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 estimated annual straight-line rental income computed in accordance with GAAP, divided by the Estimated Total Project Investment.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITIES
As of September 30, 2024, we had total outstanding debt of
In conjunction with our growing development funding pipeline, we sold, on a forward basis, 2.2 million shares of our common stock for estimated net proceeds of approximately
DISTRIBUTIONS
At its October 24, 2024, meeting, our board of directors declared a quarterly dividend of
2024 GUIDANCE
For 2024, BNL expects to report AFFO of between
The guidance is based on the following key assumptions:
-
investments in real estate properties between
and$400 million , revised down from between$600 million and$400 million ;$700 million -
dispositions of real estate properties between
and$350 million , which remains unchanged; and$450 million -
total cash general and administrative expenses between
and$31 million , revised down from between$33 million and$31.5 million .$33.5 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 Thursday, October 31, 2024, at 10:00 a.m. Eastern Time.
To access the live webcast, which will be available in listen-only mode, please visit: https://events.q4inc.com/attendee/940770546. If you prefer to listen via phone,
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 September 30, 2024, BNL’s diversified portfolio consisted of 773 individual net leased commercial properties with 766 properties located in 44 U.S. states and seven properties located in four Canadian provinces across the industrial, restaurant, retail, healthcare, 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)
|
|
September 30,
|
|
|
December 31,
|
|
||
Assets |
|
|
|
|
|
|
||
Accounted for using the operating method: |
|
|
|
|
|
|
||
Land |
|
$ |
784,545 |
|
|
$ |
748,529 |
|
Land improvements |
|
|
357,090 |
|
|
|
328,746 |
|
Buildings and improvements |
|
|
3,834,310 |
|
|
|
3,803,156 |
|
Equipment |
|
|
15,824 |
|
|
|
8,265 |
|
Total accounted for using the operating method |
|
|
4,991,769 |
|
|
|
4,888,696 |
|
Less accumulated depreciation |
|
|
(644,214 |
) |
|
|
(626,597 |
) |
Accounted for using the operating method, net |
|
|
4,347,555 |
|
|
|
4,262,099 |
|
Accounted for using the direct financing method |
|
|
26,285 |
|
|
|
26,643 |
|
Accounted for using the sales-type method |
|
|
572 |
|
|
|
572 |
|
Property under development |
|
|
— |
|
|
|
94,964 |
|
Investment in rental property, net |
|
|
4,374,412 |
|
|
|
4,384,278 |
|
Investment in rental property and intangible lease assets held for sale, net |
|
|
38,779 |
|
|
|
— |
|
Cash and cash equivalents |
|
|
8,999 |
|
|
|
19,494 |
|
Accrued rental income |
|
|
158,350 |
|
|
|
152,724 |
|
Tenant and other receivables, net |
|
|
2,124 |
|
|
|
1,487 |
|
Prepaid expenses and other assets |
|
|
36,230 |
|
|
|
36,661 |
|
Interest rate swap, assets |
|
|
27,812 |
|
|
|
46,096 |
|
Goodwill |
|
|
339,769 |
|
|
|
339,769 |
|
Intangible lease assets, net |
|
|
276,811 |
|
|
|
288,226 |
|
Total assets |
|
$ |
5,263,286 |
|
|
$ |
5,268,735 |
|
|
|
|
|
|
|
|
||
Liabilities and equity |
|
|
|
|
|
|
||
Unsecured revolving credit facility |
|
$ |
125,482 |
|
|
$ |
90,434 |
|
Mortgages, net |
|
|
77,416 |
|
|
|
79,068 |
|
Unsecured term loans, net |
|
|
896,887 |
|
|
|
895,947 |
|
Senior unsecured notes, net |
|
|
845,875 |
|
|
|
845,309 |
|
Interest rate swap, liabilities |
|
|
13,050 |
|
|
|
— |
|
Accounts payable and other liabilities |
|
|
47,651 |
|
|
|
47,534 |
|
Dividends payable |
|
|
58,163 |
|
|
|
56,869 |
|
Accrued interest payable |
|
|
9,642 |
|
|
|
5,702 |
|
Intangible lease liabilities, net |
|
|
50,761 |
|
|
|
53,531 |
|
Total liabilities |
|
|
2,124,927 |
|
|
|
2,074,394 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Equity |
|
|
|
|
|
|
||
Broadstone Net Lease, Inc. equity: |
|
|
|
|
|
|
||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
47 |
|
|
|
47 |
|
Additional paid-in capital |
|
|
3,450,116 |
|
|
|
3,440,639 |
|
Cumulative distributions in excess of retained earnings |
|
|
(467,922 |
) |
|
|
(440,731 |
) |
Accumulated other comprehensive income |
|
|
16,833 |
|
|
|
49,286 |
|
Total Broadstone Net Lease, Inc. equity |
|
|
2,999,074 |
|
|
|
3,049,241 |
|
Non-controlling interests |
|
|
139,285 |
|
|
|
145,100 |
|
Total equity |
|
|
3,138,359 |
|
|
|
3,194,341 |
|
Total liabilities and equity |
|
$ |
5,263,286 |
|
|
$ |
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 Nine Months Ended |
|
||||||||||
|
|
September 30,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lease revenues, net |
|
$ |
108,397 |
|
|
$ |
105,907 |
|
|
$ |
319,670 |
|
|
$ |
337,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
38,016 |
|
|
|
37,404 |
|
|
|
113,192 |
|
|
|
119,348 |
|
Property and operating expense |
|
|
7,014 |
|
|
|
5,303 |
|
|
|
17,976 |
|
|
|
16,580 |
|
General and administrative |
|
|
8,722 |
|
|
|
9,904 |
|
|
|
28,058 |
|
|
|
30,043 |
|
Provision for impairment of investment in rental properties |
|
|
1,059 |
|
|
|
3,852 |
|
|
|
31,311 |
|
|
|
1,473 |
|
Total operating expenses |
|
|
54,811 |
|
|
|
56,463 |
|
|
|
190,537 |
|
|
|
167,444 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income (expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
70 |
|
|
|
649 |
|
|
|
952 |
|
|
|
370 |
|
Interest expense |
|
|
(18,178 |
) |
|
|
(17,757 |
) |
|
|
(54,512 |
) |
|
|
(61,081 |
) |
Gain on sale of real estate |
|
|
2,441 |
|
|
|
3,384 |
|
|
|
64,956 |
|
|
|
48,040 |
|
Income taxes |
|
|
291 |
|
|
|
(531 |
) |
|
|
(649 |
) |
|
|
(1,030 |
) |
Other income (expenses) |
|
|
(942 |
) |
|
|
748 |
|
|
|
1,502 |
|
|
|
(227 |
) |
Net income |
|
|
37,268 |
|
|
|
35,937 |
|
|
|
141,382 |
|
|
|
156,515 |
|
Net income attributable to non-controlling interests |
|
|
(1,660 |
) |
|
|
(608 |
) |
|
|
(5,331 |
) |
|
|
(7,515 |
) |
Net income attributable to Broadstone Net Lease, Inc. |
|
$ |
35,608 |
|
|
$ |
35,329 |
|
|
$ |
136,051 |
|
|
$ |
149,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
187,496 |
|
|
|
187,436 |
|
|
|
187,408 |
|
|
|
186,545 |
|
Diluted |
|
|
196,932 |
|
|
|
196,470 |
|
|
|
196,799 |
|
|
|
196,282 |
|
Net earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.19 |
|
|
$ |
0.19 |
|
|
$ |
0.72 |
|
|
$ |
0.80 |
|
Diluted |
|
$ |
0.19 |
|
|
$ |
0.19 |
|
|
$ |
0.72 |
|
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
37,268 |
|
|
$ |
35,937 |
|
|
$ |
141,382 |
|
|
$ |
156,515 |
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of interest rate swaps |
|
|
(41,682 |
) |
|
|
(1,456 |
) |
|
|
(31,334 |
) |
|
|
15,696 |
|
Realized loss (gain) on interest rate swaps |
|
|
(5 |
) |
|
|
62 |
|
|
|
216 |
|
|
|
1,566 |
|
Comprehensive (loss) income |
|
|
(4,419 |
) |
|
|
34,543 |
|
|
|
110,264 |
|
|
|
173,777 |
|
Comprehensive loss (income) attributable to non-controlling interests |
|
|
196 |
|
|
|
(546 |
) |
|
|
(3,950 |
) |
|
|
(8,285 |
) |
Comprehensive (loss) income attributable to Broadstone Net Lease, Inc. |
|
$ |
(4,223 |
) |
|
$ |
33,997 |
|
|
$ |
106,314 |
|
|
$ |
165,492 |
|
Reconciliation of Non-GAAP Measures
The following is a reconciliation of net income to FFO, Core FFO, and AFFO for the three months ended September 30, 2024 and June 30, 2024 and for the nine months ended September 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 Nine Months Ended |
|
||||||||||
(in thousands, except per share data) |
|
September 30,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
September 30,
|
|
||||
Net income |
|
$ |
37,268 |
|
|
$ |
35,937 |
|
|
$ |
141,382 |
|
|
$ |
156,515 |
|
Real property depreciation and amortization |
|
|
37,932 |
|
|
|
37,320 |
|
|
|
112,942 |
|
|
|
119,231 |
|
Gain on sale of real estate |
|
|
(2,441 |
) |
|
|
(3,384 |
) |
|
|
(64,956 |
) |
|
|
(48,040 |
) |
Provision for impairment on investment in rental properties |
|
|
1,059 |
|
|
|
3,852 |
|
|
|
31,311 |
|
|
|
1,473 |
|
FFO |
|
$ |
73,818 |
|
|
$ |
73,725 |
|
|
$ |
220,679 |
|
|
$ |
229,179 |
|
Net write-offs of accrued rental income |
|
|
— |
|
|
|
— |
|
|
|
2,556 |
|
|
|
297 |
|
Other non-core income from real estate transactions1 |
|
|
(887 |
) |
|
|
— |
|
|
|
(887 |
) |
|
|
(7,500 |
) |
Cost of debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
Severance and employee transition costs |
|
|
98 |
|
|
|
24 |
|
|
|
199 |
|
|
|
1,404 |
|
Other (income) expenses2 |
|
|
942 |
|
|
|
(748 |
) |
|
|
(1,502 |
) |
|
|
225 |
|
Core FFO |
|
$ |
73,971 |
|
|
$ |
73,001 |
|
|
$ |
221,045 |
|
|
$ |
223,608 |
|
Straight-line rent adjustment |
|
|
(5,309 |
) |
|
|
(5,051 |
) |
|
|
(15,341 |
) |
|
|
(21,332 |
) |
Adjustment to provision for credit losses |
|
|
— |
|
|
|
(17 |
) |
|
|
(17 |
) |
|
|
(10 |
) |
Amortization of debt issuance costs |
|
|
983 |
|
|
|
983 |
|
|
|
2,949 |
|
|
|
2,955 |
|
Amortization of net mortgage premiums |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(78 |
) |
Non-capitalized transaction costs |
|
|
25 |
|
|
|
445 |
|
|
|
653 |
|
|
|
— |
|
Loss on interest rate swaps and other non-cash interest expense |
|
|
(5 |
) |
|
|
62 |
|
|
|
216 |
|
|
|
1,565 |
|
Amortization of lease intangibles |
|
|
(1,309 |
) |
|
|
(1,095 |
) |
|
|
(3,422 |
) |
|
|
(4,832 |
) |
Stock-based compensation |
|
|
1,829 |
|
|
|
2,073 |
|
|
|
5,377 |
|
|
|
4,570 |
|
AFFO |
|
$ |
70,185 |
|
|
$ |
70,401 |
|
|
$ |
211,460 |
|
|
$ |
206,446 |
|
Diluted WASO3 |
|
|
196,932 |
|
|
|
196,470 |
|
|
|
196,799 |
|
|
|
196,282 |
|
Net earnings per diluted share4 |
|
$ |
0.19 |
|
|
$ |
0.19 |
|
|
$ |
0.72 |
|
|
$ |
0.80 |
|
FFO per diluted share4 |
|
|
0.37 |
|
|
|
0.37 |
|
|
|
1.12 |
|
|
|
1.17 |
|
Core FFO per diluted share4 |
|
|
0.37 |
|
|
|
0.37 |
|
|
|
1.12 |
|
|
|
1.14 |
|
AFFO per diluted share4 |
|
|
0.35 |
|
|
|
0.36 |
|
|
|
1.08 |
|
|
|
1.05 |
|
1 Amount includes income for the settlement of a permanent land easement for an insignificant portion of two of our properties during the three and nine months ended September 30, 2024.
2 Amount includes
3 Excludes 1,024,429, and 1,033,418 weighted average shares of unvested restricted common stock for the three months ended September 30, 2024 and June 30, 2024, respectively. Excludes 907,443, and 480,849 weighted average shares of unvested restricted common stock for the nine months ended September 30, 2024 and 2023, respectively.
4 Excludes
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
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 and other non-core income from real estate transactions, cost of debt extinguishment, unrealized and realized gains or losses on foreign currency transactions, severance and employee 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 September 30, 2024, June 30, 2024, and September 30, 2023:
|
|
For the Three Months Ended |
|
|||||||||
(in thousands) |
|
September 30,
|
|
|
June 30,
|
|
|
September 30,
|
|
|||
Net income |
|
$ |
37,268 |
|
|
$ |
35,937 |
|
|
$ |
52,145 |
|
Depreciation and amortization |
|
|
38,016 |
|
|
|
37,404 |
|
|
|
38,533 |
|
Interest expense |
|
|
18,178 |
|
|
|
17,757 |
|
|
|
19,665 |
|
Income taxes |
|
|
291 |
|
|
|
531 |
|
|
|
104 |
|
EBITDA |
|
$ |
93,753 |
|
|
$ |
91,629 |
|
|
$ |
110,447 |
|
Provision for impairment of investment in rental properties |
|
|
1,059 |
|
|
|
3,852 |
|
|
|
— |
|
Gain on sale of real estate |
|
|
(2,441 |
) |
|
|
(3,384 |
) |
|
|
(15,163 |
) |
EBITDAre |
|
$ |
92,371 |
|
|
$ |
92,097 |
|
|
$ |
95,284 |
|
Adjustment for current quarter investment activity1 |
|
|
4,080 |
|
|
|
1,241 |
|
|
|
26 |
|
Adjustment for current quarter disposition activity2 |
|
|
(66 |
) |
|
|
(87 |
) |
|
|
(400 |
) |
Adjustment to exclude non-recurring and other expenses3 |
|
|
(201 |
) |
|
|
26 |
|
|
|
740 |
|
Adjustment to exclude realized / unrealized foreign exchange (gain) loss |
|
|
942 |
|
|
|
(748 |
) |
|
|
(1,433 |
) |
Other income from real estate transactions4 |
|
|
(887 |
) |
|
|
— |
|
|
|
— |
|
Adjusted EBITDAre |
|
$ |
96,239 |
|
|
$ |
92,529 |
|
|
$ |
94,217 |
|
Estimated revenues from developments5 |
|
|
— |
|
|
|
3,458 |
|
|
|
— |
|
Pro Forma Adjusted EBITDAre |
|
$ |
96,239 |
|
|
$ |
95,987 |
|
|
$ |
94,217 |
|
Annualized EBITDAre |
|
|
369,484 |
|
|
|
368,388 |
|
|
|
381,136 |
|
Annualized Adjusted EBITDAre |
|
|
384,956 |
|
|
|
370,116 |
|
|
|
376,868 |
|
Pro Forma Annualized Adjusted EBITDAre |
|
|
384,956 |
|
|
|
383,948 |
|
|
|
376,868 |
|
1 Reflects an adjustment to give effect to all investments during the quarter, including developments that have reached rent commencement, 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
4 Amount includes income for the settlement of a permanent land easement for an insignificant portion of two of our properties during the three months ended September 30, 2024.
5 Represents estimated contractual revenues based on in-process development spend to-date.
(in thousands) |
|
September 30,
|
|
|
June 30,
|
|
|
September 30,
|
|
|||
Debt |
|
|
|
|
|
|
|
|
|
|||
Unsecured revolving credit facility |
|
$ |
125,482 |
|
|
$ |
79,096 |
|
|
$ |
74,060 |
|
Unsecured term loans, net |
|
|
896,887 |
|
|
|
896,574 |
|
|
|
895,633 |
|
Senior unsecured notes, net |
|
|
845,875 |
|
|
|
845,687 |
|
|
|
845,121 |
|
Mortgages, net |
|
|
77,416 |
|
|
|
77,970 |
|
|
|
79,613 |
|
Debt issuance costs |
|
|
7,314 |
|
|
|
7,825 |
|
|
|
9,360 |
|
Gross Debt |
|
|
1,952,974 |
|
|
|
1,907,152 |
|
|
|
1,903,787 |
|
Cash and cash equivalents |
|
|
(8,999 |
) |
|
|
(18,282 |
) |
|
|
(35,061 |
) |
Restricted cash |
|
|
(2,219 |
) |
|
|
(1,614 |
) |
|
|
(15,436 |
) |
Net Debt |
|
$ |
1,941,756 |
|
|
$ |
1,887,256 |
|
|
$ |
1,853,290 |
|
Estimated net proceeds from forward equity agreements1 |
|
|
(38,983 |
) |
|
|
— |
|
|
|
— |
|
Pro Forma Net Debt |
|
$ |
1,902,773 |
|
|
$ |
1,887,256 |
|
|
$ |
1,853,290 |
|
|
|
|
|
|
|
|
|
|
|
|||
Leverage Ratios: |
|
|
|
|
|
|
|
|
|
|||
Net Debt to Annualized EBITDAre |
|
5.3x |
|
|
5.1x |
|
|
4.9x |
|
|||
Net Debt to Annualized Adjusted EBITDAre |
|
5.0x |
|
|
5.1x |
|
|
4.9x |
|
|||
Pro Forma Net Debt to Annualized Adjusted EBITDAre |
|
4.9x |
|
|
4.9x |
|
|
4.9x |
|
|||
|
|
|
|
|
|
|
|
|
|
1 Represents pro forma adjustment for estimated net proceeds from forward sale agreements that have not settled as if they have been physically settled for cash as of the period presented.
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, and Pro Forma Net Debt to Annualized Adjusted EBITDAre, each discussed further 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 define our Pro Forma Adjusted EBITDAre as Adjusted EBITDAre adjusted to show the impact of estimated contractual revenues based on in-process development spend to-date. Our Pro Forma Net Debt is defined as Net Debt adjusted for estimated net proceeds from forward sale agreements that have not settled as if they have been physically settled for cash as of the period presented. We then annualize quarterly Adjusted EBITDAre and Pro Forma Adjusted EBITDAre by multiplying them by four (“Annualized Adjusted EBITDAre” and “Annualized Pro Forma 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030940094/en/
Company Contact:
Brent Maedl
Director, Corporate Finance & Investor Relations
brent.maedl@broadstone.com
585.382.8507
Source: Broadstone Net Lease, Inc.
FAQ
What was Broadstone Net Lease's (BNL) net income for Q3 2024?
What is BNL's portfolio occupancy rate as of Q3 2024?
How much did BNL invest in Q3 2024?