Broadstone Net Lease (BNL) Q2 2024 earnings summary

Executive summary

• Substantial progress on healthcare portfolio simplification, with $342.5 million in dispositions year-to-date and proceeds redeployed into new investments, reducing healthcare ABR exposure from 17.6% to 11.3% by year-end.

• Portfolio comprised 777 properties across 44 U.S. states and 4 Canadian provinces, 99.3% leased with a weighted average remaining lease term of 10.4 years as of June 30, 2024.

• Portfolio highly diversified by property type, tenant, industry, and geography; no tenant exceeds 4.1% of annualized base rent.

• Shares are trading at an 18-month high, reflecting investor confidence in strategic execution and growth prospects.

• Redeployed proceeds from healthcare asset sales into new investments, supporting future growth.

Financial highlights

• AFFO for Q2 2024 was $70.4 million ($0.36 per share), up 2.9% year-over-year, driven by lower interest expense.

• Lease revenues for Q2 2024 were $105.9 million, down 3.2% year-over-year; net income was $35.9 million ($0.19 per share), down from $63.0 million in Q2 2023.

• Cash G&A for the quarter was $7.8 million, a 1.4% decrease year-over-year; G&A expense guidance for 2024 lowered to $31.5–$33.5 million.

• Dividend maintained at $0.29 per share, with coverage remaining strong.

• FFO for the six months ended June 30, 2024 was $146.9 million; AFFO was $141.3 million.

Outlook and guidance

• AFFO guidance for 2024 reaffirmed at $1.41–$1.43 per share.

• Investment guidance for 2024 raised to $400–$700 million; disposition guidance narrowed to $350–$450 million.

• Modest AFFO per share growth expected for 2024, with setup for stronger growth in 2025 and 2026.

• Management expects continued revenue and earnings growth through rent escalations, capital expenditures, development funding, and acquisitions.