Broadstone Net Lease, Inc.

Hello and welcome to Broadstone Net Lease's first quarter 2025 earnings conference call. My name is Emily and I'll be your operator today. Please note that today's call is being recorded. I will now turn the call over to Brent Madel, Director of Corporate Finance and Investor Relations at Broadstone. Please go ahead.

Thank you everyone for joining us today for Broadstone Net Lease's first quarter 2025 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. As a reminder, the following discussion and answers to your questions contain 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 under-reliance on these forward-looking statements. and refer you to our FCC filings, including our Form 10-K for the year ended December 31st, 2024, for a more detailed discussion of the risk factors that may cause such differences. And note that such risk factors may be updated in our quarterly FCC filings. Any forward-looking statements provided during this conference call are only made as of the date of this call. With that, I'll turn the call over to John.

Thank you, Brent, and good morning, everyone. I am pleased to report strong first quarter results. demonstrating continued disciplined execution and the unique benefits of our strategy. We remain focused on driving long-term shareholder value and believe our differentiated business model, consisting of our four core building blocks, along with an investment-grade balance sheet, positions us well in the current environment to drive attractive growth for our shareholders. We continue to find success growing our build-to-suit pipeline through both existing and new relationships, providing visibility to embedded revenue growth through 2026 and into 2027. a distinct advantage in the triple net lease landscape, particularly amid ongoing market uncertainty. Year-to-date, we have invested $103.9 million in new property acquisitions, build-to-suit developments, and revenue-generating CapEx. We have approximately $305.9 million of committed build-to-suit developments, with $255.8 million in remaining estimated investments to be funded through the third quarter of 2026, with initial cash cap rates in the sevens and straight line yields in the mid eights to mid nines. And we have 132.9 million of acquisitions under control and 4.5 million of commitments to fund revenue generating CapEx with existing tenants. Importantly, and I want to emphasize these points, our 305.9 million pipeline of in-process build to suit developments is fully signed up and committed. We now own or control the land. Construction is underway and on time. and we have locked in approximately 22.6 million of incremental ABR today that will come online later this year and during 2026, representing approximately 5.6% growth in our current ABR. These committed build-to-suit developments represent long-term, high-quality, de-risked, and value-creating growth that is unique in this triple net lease space. We continue to be incredibly excited about this differentiated strategy and very much look forward to making additional project announcements in the months ahead. In that vein, last week we announced the addition of a new $78.2 million project to our pipeline of build-to-suit development commitments. For this project, we are excited to be partnering with the development team at Prologis, marking another significant milestone in our growing pipeline and our expanding network of development partners. Ryan will have more details on that new project and relationship in a few moments. As we have been emphasizing over the last year, we believe our differentiated strategy provides a unique and compelling opportunity for growth in net lease, With top-tier in-place portfolio performance, a willingness to invest in our relationships and improve the quality of our portfolio through revenue-generating CapEx with existing tenants, a robust, resilient, and laddered pipeline of development projects providing attractive, long-term, and de-risk growth opportunities, and a proven ability to also grow through regular way acquisitions, we believe Broadstone NetLease holds the promise of a brighter tomorrow and that our best days and shareholder returns are ahead of us. We are making incredible progress on our strategy and remain focused on differentiated and disciplined growth, but it's important for us to also recognize the risks presented by the current macroeconomic environment. We are paying close attention to the impacts from actual or potential tariffs, the conditions in the overall economy and the capital markets, and the health of the consumer and spending trends. There are certainly pockets of incremental focus, but nothing that we can't handle. Although the headlines may be different today, we have dealt with more than our fair share of uncertainty in our history and know how to manage it. Broadstone Net Lease was formed in October 2007 and is coming up on its 18th anniversary as a net lease REIT later this year. And with a management team averaging a decade's time with the company, this isn't our first rodeo. Starting with prudent and disciplined underwriting, continuing with proactive and aggressive portfolio management, and bringing a laser focus to maintaining a fortified and flexible balance sheet, We are ready and equipped to manage through this period as well as anyone. With a high-quality portfolio with strong operating metrics, 204 different commercial tenants, no single tenant accounting for more than 4% of our ABR, 99.1% occupancy, and 99.1% rent collection for the first quarter, this is a resilient and diversified portfolio designed to weather and navigate any environment. As you saw in our earnings release last night, and you will hear more from Kevin in a bit, We are maintaining our 2025 AFFO guidance range at $1.45 to $1.49 per share, or approximately 3% growth at the midpoint. Given several positive developments we have experienced so far this year, including the building momentum in our investment strategy, satisfactory resolutions of certain tenant matters, including ZIPS, as you will hear about from Ryan in a few moments, and incrementally lower operating expenses, we considered raising the bottom end of our guidance range this quarter. With a high level of macroeconomic uncertainty, however, we felt it would be prudent to maintain guidance this quarter and revisit our range as well as the underlying assumptions as the year progresses. Later this year, we also hope to be able to provide you with a preview of our forecasted base case growth for 2026 based on the contributions we expect to receive from our core building blocks and our execution in 2025. During our fourth quarter earnings call, I told you that we have ambitious goals for the year and that we intended to meet or exceed them, positioning B&L for even better growth in 2026 and beyond. None of that has changed. And that includes our goal of adding at least $500 million in additional build-to-suit developments to our committed schedule of projects that would stabilize and begin paying rent in 2026 and 2027, further strengthening our build-to-suit ladder. With our recently announced $78.2 million project, we've made a strong first step towards that goal with more on the way. As you can readily see from this quarter's results and committed pipeline, we are well set up for growth in 2025 and beyond through our core building blocks and look forward to delivering on the promise that this differentiated strategy, portfolio, and team provide. With that, I'll turn the call over to Ryan, who will provide additional updates on our build-a-suit and acquisitions pipeline, as well as portfolio matters.