Broadstone Net Lease, Inc.

Hello and welcome to Broadstone Net Lease's second quarter 2023 earnings conference call. My name is Jordan and I'll be your operator today. Please note that today's call is being recorded. I'll now turn the call over to Mike Caruso, Senior Vice President of Corporate Strategy and Investor Relations at Broadstone. Please go ahead.

Thank you, operator, and thank you everyone for joining us today for Broadstone Net Lease's second quarter 2023 earnings call. On today's call, you will hear prepared remarks from CEO John Marrana, President and COO Ryan Albano, and CFO Kevin Fennell. All three will be available for the Q&A portion of this call. Before we begin, I would like to remind everyone that the following presentation contains forward-looking statements, which are subject to risks and uncertainties that can cause actual results to differ materially due to a variety of factors. We caution you not to place undue reliance on these forward-looking statements. and refer you to our SEC filings, including our Form 10-K for the year ended December 31st, 2022, for a more detailed discussion of the risk factors that may cause such differences. Any forward-looking statements provided during this conference call are only made as of the date of this call. I'll now turn the call over to John.

Thank you, Mike, and good morning, everyone. Thank you all for joining today's call. As we detailed in last night's earnings release, I am pleased to report another strong quarter of results and thoughtful capital allocation as we turn the page on the first half of 2023. Our mission is to deliver sustainable long-term growth and value creation for B&L shareholders. And we believe that the prudent and selective approach we have chosen to employ this year has laid the foundation for that. Our second quarter results were driven by solid same-store portfolio performance and accretive capital recycling efforts. B&L is positioned to continue to provide predictable results for our shareholders in the second half of the year and beyond because of our solid and diversified portfolio, our patient and disciplined execution strategy, our growing pipeline of accretive opportunities to invest capital, and our flexible and fortified balance sheet. Starting with our existing portfolio of 221 unique tenants who operate across 54 different industries, Our best in class diversification has defensively positioned us to provide durable and consistent cash flow across all market cycles. We continue to view our tenant and industry diversification as a key differentiator for Broadstone, which, when combined with top tier annual rent escalations of 2%, provides significant downside risk mitigation benefits, especially in difficult or uncertain markets. Our real estate portfolio, which is predominantly leased to industrial and defensive retail and restaurant tenants, Mike Nygren, continues to perform exceptionally well as evidenced by 99.9% rent collections during the second quarter and 99.4% occupancy as of June 30 as a quarter and only two of our 801 properties were vacant and not subject to a lease. Mike Nygren, As always, we are closely monitoring the health of all our tenants, but especially those who may be more susceptible to the evolving challenges of operating in today's environment. We have experienced tremendous success in our capital recycling efforts this year, generating 168.3 million of gross proceeds at a weighted average cash cap rate of 5.9% on tenanted properties, which Ryan will provide additional detail on in just a few moments. Our proactive approach to asset management and corresponding disposition efforts have helped to mitigate both credit and residual risk within our current portfolio, while also providing additional dry powder to be accretively deployed at attractive spreads. With a stock price well below where we would be comfortable raising equity capital, we intend to continue to control our own destiny as we have done through the first half of this year and will rely on disciplined capital recycling as a core pillar of our near-term strategy and will look to opportunistically execute additional and creative asset sales during the second half of the year. On an external growth front, we remain committed to our patient and disciplined approach and have found creative ways to accretively deploy capital during the second quarter which included a healthy mix of new property acquisitions, revenue generating investments in our existing assets, and development fundings. While we have sourced and evaluated over 17 billion of new investment opportunities year to date, we have employed a selective approach to external growth given our belief that cap rates, market dynamics, and risk reward tradeoffs are not properly calibrated for many assets currently on the market. We are focused intensely on making investments that create long-term value for our shareholders and have successfully capitalized on several unique opportunities that have emerged as a direct result of the current market. Of note, we have opportunistically partnered with many of our current tenants and developers as financing conditions remain challenging for both. By establishing new partnerships and strengthening existing relationships, we have found ways to add value for our shareholders that supplement our more traditional acquisition sourcing efforts. This creative approach to navigating the current market environment demonstrates our differentiated relationship-driven approach to investing that is a core component of our success. With the difficulties the entire real estate industry faces in 2023, our investment strategy has been focused on being patient and disciplined and maximizing long-term shareholder value in 2024 and beyond. Our flexible balance sheet and conservative leverage profile, coupled with proceeds from dispositions at attractive cap rates, in the high 5% to low 6% range, will support our growth strategy in the second half of the year and into 2024. As I've said in the past, B&L is currently in a position to make decisions that we want to, not decisions that we have to, an especially important distinction in today's real estate market. And with that, I will now turn the call over to Ryan, who will provide additional details on the status of our portfolio, our accretive capital recycling efforts, second quarter investment activity, and our growing pipeline of investment opportunities.