Broadstone Net Lease, Inc. Q4 FY2025 earnings call

• 2025 was a pivotal year, with progress across core building blocks: solid portfolio performance, laddered build-to-suit pipeline, and stabilized acquisitions. Delivered $1.49 AFFO per share, 4.2% growth YOY. Portfolio 99% leased and 99.8% rents collected. Incrementally disposed of legacy clinical health care assets. Deployed $748.4 million in investments. Successfully navigated tenant situations with limited financial impact. • 2026 outlook: build-to-suit strategy provides long-term growth, ~$350 million of build-to-suit developments scheduled to stabilize in 2026, ~$142 million under executed LOIs. Excited about Project Triboro, ~$100 million invested by Dec 31, 2025. Focus on disciplined execution to close valuation gap vs peers. Raised ~$43 million via ATM since Nov 2025. • Ryan Albano discussed build-to-suit pipeline: 9 in-process developments, estimated total project investment $345 million, initial cash yield 7.4%, straight-line yield 8.6%. Pursued stabilized acquisitions, invested ~$430 million, initial cash yields 7%, strong rent escalations. Sold 28 properties for risk mitigation. • Kevin Fennell discussed financial results: adjusted funds from operations $75.8 million or $0.38 per share in Q4 2025, $296.3 million or $1.49 per share full year 2025, 4.2% growth YOY. Core G&A down 2% YOY. Balance sheet ended with pro forma leverage 5.8x, ~$11 million unsettled equity, over $700 million available on revolver. Amended bank term loans, reduced rates and extended maturity. Approved quarterly dividend of $0.2925 per share, 1% increase.

In 2025, Broadstone generated $1.49 of AFFO per share, a 4.2% year-over-year growth. The portfolio ended the year 99% leased and 99.8% of rents collected. Deployed $748.4 million, including $429.9 million in new property acquisitions with weighted average initial cash capitalization rate of 7%, weighted average remaining lease term of 14.2 years and weighted average annual rent increases of 2.6%. $209.3 million in build-to-suit developments, $100.8 million in transitional capital and $8.3 million in revenue-generating capital expenditures. New property acquisitions and revenue-generating capital expenditures had a weighted average straight-line yield of 8.4%. Sold 28 properties in 2025, yielding gross proceeds of $96 million at an average cash cap rate of 7.3% on tenanted properties. Completed 19 lease rollovers in 2025, addressing over 1% of total portfolio ABR with weighted average recapture rate of 110% and average new lease term exceeding 7 years.

• Reiterates 2026 AFFO guidance range of $1.53 to $1.57 per share. • Key assumptions: investment volume between $500 million and $625 million, disposition volume between $75 million and $100 million, core G&A between $30 million and $31 million (revised down from initial guide). • Includes 75 basis points of lost rent with 2026 guidance, to be revisited throughout the year. • Per share results sensitive to timing, amount, and mix of investment, disposition activity, and capital market activities.

• Credit events could impact the business, although actual financial impact from tenant situations in 2025 was limited with bad debt at 31 basis points. • Market sentiment and relative valuation can affect equity raises. • Competition in the build-to-suit and traditional acquisition spaces could impact deal sourcing and cap rates. • Political landscape and potential headwinds around data center development could affect projects like Project Triboro. • Broader economic conditions and sector-specific constraints could impact tenant credit and transaction pricing.

Q: Anthony Paolone with JPMorgan on competitive landscape for build-to-suit opportunities.

A: John Moragne says others finding value in build-to-suits, but no increase in competition on deals, and seen uptick in build-to-suit activity.

Q: Anthony Paolone on Project Triboro power delivery timeline.

A: Ryan Albano says it's too early to tell, looking at different load ramps with PPL, first phase 300 megawatts, second phase up to gigawatt.

Q: Eric Borden with BMO Capital on UNFI capital source and leverage.

A: John Moragne says timing is key, deployment mix and leverage to be opportunistic.

Q: Eric Borden on internal growth.

A: John Moragne says 2% annual growth rate is reasonable.

Q: Upal Rana with KeyBanc on Red Lobster sites and master lease.

A: John Moragne says early days, looking for mutually beneficial solutions.

Q: Upal Rana on American Signature rent and bad debt.

A: John Moragne says rents stay current, bad debt assumptions conservative.

Q: Caitlin Burrows with Goldman Sachs on build-to-suit pipeline.

A: John Moragne says $350 million to $500 million is rolling target, almost entirely repeat business.

Q: Caitlin Burrows on Claire's lease termination.

A: John Moragne says no termination fee, property vacant June 30, working on re-leasing/selling.

Q: Ronald Kamdem with Morgan Stanley on Project Triboro tenant and timeline.

A: Ryan Albano says near term, first half 2026, in market looking for tenant.

Q: Ronald Kamdem on capital recycling and cap rates.

A: Kevin Fennell says opportunistic selling, build-to-suit cap rates mid-7s to low 7s, traditional acquisitions have some compression.

Q: Mitch Germain with Citizens Bank on capital deployment breakdown.

A: John Moragne says weighted towards build-to-suit dollars in 2026.

Q: Mitch Germain on traditional acquisition competition.

A: John Moragne says competition high, supply-demand not matching up.

Q: Ryan Caviola with Green Street Advisors on onshoring tailwinds.

A: John Moragne says seen in build-to-suit pipeline, slow to materialize.

Q: Ryan Caviola on casual dining commentary.

A: John Moragne says operator and brand specific, not actively looking for new casual dining.

Q: Michael Gorman with BTIG on Project Triboro value and headwinds.

A: Ryan Albano says value creation with site work, hyperscalers interested, no slowdown in data center investment.

Q: Michael Goldsmith with UBS on investment guidance and term loan benefit.

A: John Moragne says guide conservative, term loan amendment benefits ~$2 million.

Q: John Kim with BMO Capital Markets on equity raise levels.

A: John Moragne says relative valuation and opportunistic, balance sheet improvement needed.

Q: Caitlin Burrows with Goldman Sachs on American Signature timeline.

A: John Moragne says Gartner White stepped into leases, no bad debt, looking to improve lease structure.

Q: Caitlin Burrows on outbound activity.

A: Ryan Albano says extremely active, 2-way street, majority of new relationships on outbound basis.