Broadstone Net Lease (NYSE:BNL) executives used the company’s fourth-quarter 2025 earnings call to highlight progress made in 2025, reiterate 2026 adjusted funds from operations (AFFO) guidance, and discuss several tenant and capital allocation developments—including updates on Red Lobster exposure and the company’s transitional capital investment in Project Triboro.
2025 results and portfolio performance
Broadstone reported fourth-quarter AFFO of $75.8 million, or $0.38 per share, up 5.6% from the fourth quarter of 2024. For the full year, AFFO totaled $296.3 million, or $1.49 per share, representing 4.2% year-over-year growth.
CEO John Moragne said the portfolio ended the year 99% leased with 99.8% of rents collected. Lost rent and bad debt were described as limited, with lost rent totaling 31 basis points for the year compared with 67 basis points in 2024.
Investment activity and the build-to-suit strategy
Moragne said the company deployed $748.4 million in 2025, comprised of:
- $429.9 million in new property acquisitions
- $209.3 million in build-to-suit developments
- $108.0 million in transitional capital
- $8.3 million in revenue-generating capital expenditures
Management said new property acquisitions and revenue-generating capital expenditures had a weighted average initial cash cap rate of 7%, a weighted average remaining lease term of 14.2 years, and weighted average annual rent increases of 2.6%, which was described as 50 basis points above the portfolio average. On a weighted average basis, these investments carried a straight-line yield of 8.4%.
President and COO Ryan Albano said approximately $4.5 million of annual base rent (ABR) commenced in 2025 from build-to-suit projects, with weighted average annual escalations of 2.9% and a weighted average lease term of 15 years. Albano added that the company had nine in-process developments representing an estimated total project investment of $345 million, with estimated initial cash yields of 7.4% and estimated weighted average straight-line yields of 8.6%.
In response to investor questions about competition, Moragne said the company had not seen increased competition on the build-to-suit deals it was pursuing, emphasizing Broadstone’s relationship-based sourcing. Management also noted an uptick in build-to-suit opportunities recently, including potential completions in 2027 and 2028.
Dispositions, lease rollovers, and tenant watch items
Albano said Broadstone sold 28 properties in 2025 for gross proceeds of $96 million, with tenanted property sales at an average cash cap rate of 7.3%. He said dispositions were focused on routine portfolio sales and risk mitigation, including the sale of Stanislaus Surgical to reduce exposure to non-reimbursable clinical asset expenses.
On leasing activity, Albano said the company completed 19 lease rollovers during 2025, addressing more than 1% of total portfolio ABR, with a weighted average recapture rate of 110% and an average new lease term of more than seven years. For 2026, 3.3% of in-place ABR is scheduled for rollover, with negotiations “already underway,” and management said it anticipated positive outcomes.
Moragne and Albano also discussed several tenant situations:
- American Signature / Gardner White: Moragne said Gardner White Furniture assumed all six leases at current rents effective Feb. 6 through a court-supervised process, resulting in no bad debt. Management said it is working to consolidate the individual leases into a master lease, but rents are expected to remain unchanged. Moragne added that missed rent in November was covered via letters of credit, and rent was collected on an administrative basis during the bankruptcy process.
- Red Lobster: Management said post-bankruptcy operating performance has been mixed, with some sites improving and others seeing weaker traffic and profitability. Red Lobster represents approximately 1.3% of total ABR across 18 sites under a single master lease running through 2042. Executives said they are evaluating for-sale or for-lease paths that could reduce exposure over time, while stressing that discussions are in early stages and must be “mutually beneficial.”
- Claire’s: Albano said Claire’s exercised its lease termination right effective June 30. Management stated there is no termination fee due to bankruptcy-related provisions. The company said it is preparing to re-lease or sell the property starting July 1 and noted that impacts are already reflected in guidance and bad debt assumptions.
Project Triboro and transitional capital
Management provided a detailed update on Project Triboro, Broadstone’s primary transitional capital investment. Moragne said the company invested approximately $100 million in the project through Dec. 31, and Albano described the site as a fully entitled industrial development location in northeastern Pennsylvania with 1 gigawatt of committed power capacity.
Albano said the primary path being evaluated is a future hyperscale data center campus, with potential structures ranging from “powered land” to “powered shell” configurations. He emphasized that there is an alternative “floor” for the investment: the site is fully entitled and designed to support multiple industrial build-to-suit developments if the data center approach does not produce the best outcome.
Management said site work began in the fourth quarter and remains ongoing. Albano noted unsolicited proposals have been received at valuations “significantly higher” than invested capital, and that initial power delivery is anticipated as early as the third quarter of 2027. In Q&A, Albano said the company is evaluating different load ramps and described power delivery in two phases, with a first phase of 300 megawatts and a second phase reaching 1 gigawatt.
Balance sheet, dividend, and 2026 guidance
Fennell said Broadstone ended 2025 with pro forma leverage of 5.8x, approximately $11 million of unsettled equity, and more than $700 million available on its revolver. He said the company amended its bank term loans in December, reducing all-in rates by 10 basis points and reducing the 2029 term loan rate by an additional 25 basis points. The 2029 term loan maturity was extended into February 2031, and management said the company has limited debt maturities through 2027.
On capital markets activity, management said it raised a small amount of equity under its ATM since November, with gross proceeds of approximately $43 million on a forward basis. Moragne said the company does not expect to raise significant additional equity “at these levels,” though it will remain opportunistic. In Q&A, Moragne also discussed frustration with Broadstone’s relative valuation versus peers and said the company aims to close that gap through execution.
The board approved a quarterly dividend of $0.2925 per share, a $0.0025 increase (about 1%) from the prior dividend. The dividend is payable on or before April 15, 2026, to shareholders of record as of March 31, 2026. Management said the increase reflects a return to growth in 2025 and visibility into growth in 2026 and 2027, while continuing to target a mid-70% payout ratio by the end of 2026.
Broadstone reiterated 2026 AFFO guidance of $1.53 to $1.57 per share. Fennell said key assumptions include:
- Investment volume of $500 million to $625 million
- Disposition volume of $75 million to $100 million
- Core G&A of $30 million to $31 million (revised down from $30.5 million to $31.5 million)
Guidance also includes 75 basis points of lost rent, which management said it will revisit during the year. Executives added that incremental investment activity required to achieve 2026 guidance is “relatively insignificant,” and that internal discussions are increasingly focused on opportunities delivering in 2027.
About Broadstone Net Lease (NYSE:BNL)
Broadstone Net Lease, Inc (NYSE: BNL) is a publicly traded real estate investment trust focused on owning and operating single-tenant commercial properties under long-term net leases. The company specializes in acquiring properties that are leased to creditworthy tenants, allowing it to generate predictable, stable rental income while transferring most operating expenses and responsibilities to its lessees.
Broadstone Net Lease’s portfolio spans a variety of property types, including industrial facilities, distribution centers, manufacturing plants, life science and office buildings, and essential retail locations.
