Broadstone Net Lease, Inc. · NYSE:BNL
Broadstone Net Lease — Q3 2023 Earnings Presentation
26 slides from Broadstone Net Lease's earnings presentation, Nov 2, 2023
Slide 1: Investor Presentation November 2023
INVESTOR PRESENTATION NOVEMBER 2023
Slide 2: Disclaimer
DISCLAIMER CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS This presentation 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 thing
Slide 3: Broadstone At-A-Glance
BROADSTONE AT-A-GLANCE $390 Million 38.2 Million Annualized Base Rent Rentable Square Footage 51% Industrial 18% Healthcare 14% Restaurant 11% Retail 99.4% Occupancy 1 6% Office 99.9% 10.5 Years WALT 2 Rent Collections in Q3 2.0% Annual Escalation 93.7% Financial Reporting3,4 800 Properties $16.5 Mi
Slide 4: Investment Thesis
INVESTMENT THESIS Established REIT with Longstanding Track Record of Success Delivering Shareholder Value 15+ year operating history pursuing a diversified net lease strategy with a leading team, now proven through two cycles Publicly traded on the NYSE (BNL) with experience operating under subs
Slide 5: Longstanding operating history and employee tenure
BROADSTONE NET LEASE (NYSE: BNL) Longstanding operating history and track record of success delivering results to shareholders ($mm) AVERAGE EMPLOYEE TENURE: 5.0 YEARS ESTIMATED GROWTH IN GROSS ASSET VALUE1 SINCE INCEPTION 5+ 52% $5,477 Employee Tenure $5,427 4 13% (Years) 3 4% 2 $4,572 15% <2 16% $
Slide 6: Q3 2023 At-A-Glance
Q3 2023 AT-A-GLANCE Our diversified portfolio continues to generate consistent results and steady same-store growth PORTFOLIO OVERVIEW KEY OPERATING METRICS $390 Million 800 38.2 Million 99.4% 99.9% Annualized Base Rent Properties Square Footage Occupancy Rent Collection $4.7 billion 44 + 4 Enterpri
Slide 7: Portfolio Diversification
PORTFOLIO DIVERSIFICATION TOP 20 TENANTS PROPERTY TYPE DIVERSIFICATION (BY ABR) ABR as a # of Tenant Property Type % of Total Properties Portfolio Roskam Baking Industrial 51% Industrial 7 4.0% Manufacturing 17% AHF Products* Industrial 8 2.4% Distribution & Warehouse 13% Jack's Family Restaurants*
Slide 8: Top 10 Tenant Descriptions
TOP 10 TENANT DESCRIPTIONS TENANT BUSINESS DESCRIPTION Founded in 1923 and headquartered in Grand Rapids, Michigan, Roskam Baking Company is a food manufacturer with over 2 million square feet of manufacturing space and over 30 manufacturing and packaging lines. Roskam manufactures a diverse product
Slide 9: Top 10 Tenant Descriptions (Cont.)
TOP 10 TENANT DESCRIPTIONS (CONT.) TENANT BUSINESS DESCRIPTION Incorporated in 1995 and headquartered in Beverly, Massachusetts, Axcelis designs, manufactures, and services ion implantation and other processing equipment used in the fabrication of semiconductor chips globally. In 2022, Axcelis was n
Slide 10: Portfolio At-A-Glance: Industrial
PORTFOLIO AT-A-GLANCE: INDUSTRIAL PROPERTY TYPE BREAKDOWN PROPERTY TYPE OVERVIEW 193 $200mm 29.4mm Industrial Properties ABR SF Services Cold Storage 6% 6% Manufacturing 95 2.0% Wtd. Avg. 11.5 Years Flex and 32% Tenants Rent Escalations WALT R&D 8% Industrial exposure has grown from 31.2% at YE 2018
Slide 11: Remaining Portfolio At-A-Glance
REMAINING PORTFOLIO AT-A-GLANCE TOP TENANTS KEY STATISTICS PROPERTY TYPE BREAKDOWN Life Science Clinical ABR % | $: 18% | $69mm 12% HEALTHCARE 40% Properties: 129 Surgical Square Feet: 2.9mm 18% 15% ABR WALT: 6.8 years Animal Health Services Wtd Avg. Annual 2.4% 16% Healthcare Services Rent Escalati
Slide 12: Significant Geographic Diversity
SIGNIFICANT GEOGRAPHIC DIVERSITY TOTAL PROPERTIES: 800 TOTAL STATES/PROVINCES: 44 + 4 Canadian provinces ABR as a % of State Total Portfolio 1 TX 9.9% 2 MI 8.3% 3 IL 6.1% 4 WI 5.9% 5 CA 5.0% 6 FL 4.2% 7 OH 4.2% 8 IN 4.2% 9 MN 4.0% 10 TN 4.0% Top 10 States 55.8% Data as of September 30, 2023 12 INVES
Slide 13: Significant Cross-Diversification
SIGNIFICANT CROSS-DIVERSIFICATION Significant Geographic, Property Type, and Industry Diversification Helps to Mitigate State Specific Risk STATE EXPOSURE AT-A-GLANCE ($ in millions) State: Texas Dallas Concentration: 1 $6.0 Houston $1.0 ABR: % | $ 9.9% | $38.5mm $1.1 $13.2 Austin Tenants: 38 Sherma
Slide 14: Top-Tier Portfolio Metrics
TOP-TIER PORTFOLIO METRICS RENT COLLECTION RENT ESCALATION 100.0% 100.0% 99.9% 100.0% 99.9% 99.9% 2.5% Contractual Fixed Increases 2.4% 85.5% Portfolio, 2.0% 2.0% 1.8% 1.6% CPI- Related 11.8% Flat 2.7% Healthcare Industrial Office Restaurant Retail Q2 Q3 Q4 Q1 Q2 Q3 80.3% Leases with 2022 2023 Annua
Slide 15: Key Portfolio Metrics
KEY PORTFOLIO METRICS Portfolio composition and underlying metrics rank toward the top of the net lease space INDUSTRIAL EXPOSURE WEIGHTED AVERAGE LEASE TERM REMAINING 14.0 92.0% 11.2 10.7 10.3 10.2 9.6 9.4 8.6 8.1 52.6% 52.0% 5.9 25.7% 13.1% 3.5% 0.0% 0.0% 0.0% 0.0% PORTFOLIO RENT ESCALATIONS LEASE
Slide 16: Differentiated Investment Approach
DIFFERENTIATED INVESTMENT APPROACH Agile Investment Strategy Enables Identification of Attractive Investment Opportunities Diversified Core Attractive Capital Proven Property Sectors Allocation Investment Strategy A decade plus of experience Flexibility to identify adjacent property ✔ Increased
Slide 17: Systematic Investment Approach
SYSTEMATIC INVESTMENT APPROACH INVESTMENT TEAMS: INDUSTRIAL HEALTHCARE RESTAURANT / RETAIL CURRENT BROKERAGE DEVELOPMENT TENANT PRIVATE SOURCING CHANNELS: UPREIT OWNERS NETWORK PARTNERS RELATIONSHIPS EQUITY INVESTMENT TYPE DESCRIPTION SALE Acquire single-tenant property with a simultaneous new lon
Slide 18: Proven & Disciplined Investment Approach
PROVEN & DISCIPLINED INVESTMENT APPROACH Recent investment activity heavily weighted to industrial opportunities given attractive trends and risk- adjusted returns, but maintain acquisition flexibility to execute on diversified pipeline of assets Volume ($mm) Industrial Investments Since 2019 $2.0 B
Slide 19: Conservative Balance Sheet & Prudent Capital Allocation
CONSERVATIVE BALANCE SHEET & PRUDENT CAPITAL ALLOCATION 1 Defensive leverage profile with broad access to diversified capital sources 2 Carefully constructed platform built to deliver accretive external growth 3 Specialized, national sourcing model with robust pipeline of opportunities 4 Diversified
Slide 20: Well Capitalized Balance Sheet
WELL CAPITALIZED BALANCE SHEET Investment Grade Credit Rated Balance Sheet with Well Laddered Maturities and Strong Liquidity TOTAL CAPITALIZATION DETAIL TOTAL CAPITALIZATION ON SEPTEMBER 30, 2023 ($ in thousands) September 30, 2023 1.7% 1.6% Equity Common Stock Common Stock 187,272 18.0% OP Units O
Slide 21: Emphasis Placed on Liquidity
EMPHASIS PLACED ON LIQUIDITY Conservative Leverage Profile & Ample Liquidity to Navigate Current and Future Economic Uncertainly KEY CREDIT METRICS AS OF SEPTEMBER 30, 2023 LEVERAGE PROFILE EVOLUTION2 Forward Equity Proceeds Outstanding 4.9x 4.3x BBB / Baa2 Pro Forma Net Debt / Annualized Adj. EBITD
Slide 22: Corporate Responsibility
CORPORATE RESPONSIBILITY Commitment to Corporate Responsibility We are committed to being a responsible corporate citizen by conducting our operations in a sustainable and ethical manner. We strive to foster a culture that is inclusive, collaborative, and based on trust, and invest heavily in the he
Slide 23: Board of Directors & Governance
BOARD OF DIRECTORS & GOVERNANCE BOARD OF DIRECTORS (INDEPENDENT) KEY GOVERNANCE HIGHLIGHTS Name, tenure Experience Laurie Hawkes (Chairman) Co-Founder, American Residential Properties Majority independent board Director since 2016 Director, Appreciate Holdings, Inc. (NASDAQ: Chairman since 2021
Slide 24: Additional Information
BROADSTONE (ai NET LEASE, INC. ADDITIONAL INFORMATION
Slide 25: GAAP Reconciliations: FFO, Core FFO and AFFO
GAAP RECONCILIATIONS FUNDS FROM OPERATIONS (FFO), CORE FFO, AND ADJUSTED FUNDS FROM OPERATIONS (AFFO) Three Months Ended September 30, June 30, (in thousands) 2023 2023 Net income $ 52,145 $ 62,996 Real property depreciation and amortization 38,496 38,990 Gain on sale of real estate (15,163) (29,462
Slide 26: GAAP Reconciliations: EBITDA and Net Debt
GAAP RECONCILIATIONS EBITDA, EBITDAre, ADJUSTED EBITDAre, NET DEBT TO ANNUALIZED ADJUSTED EBITDAre As of (in thousands) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Debt Unsecured revolving credit facility $ 74,060 $ 122,912 $ 108,330 $ 197,322 $ 219,537 Unsec