Detailed Narrative
Q1 Investment Activity and Build-to-Suit Expansion
Broadstone Net Lease deployed a total of $171.9 million during the first quarter, comprising $61.2 million in new property acquisitions, $99.4 million in build-to-suit developments, and $10.4 million in incremental investments in existing transitional capital projects. The company added new build-to-suit projects for Amazon in Sarasota, Florida, and Academy Sports in Magnolia, Texas. Subsequent to quarter-end, a new presort battery recycling facility for Tesla near Austin, Texas, was initiated. These new build-to-suit investments feature a blended initial cash cap rate of 7.2%, straight-line yields of 8.3%, and a weighted average lease term of 14 years.
Charles River Laboratories Acquisition and Redevelopment Potential
The company invested $61.2 million in a 60-acre campus near Boston, Massachusetts, tenanted by Charles River Laboratories. This sale-leaseback includes a 12-year net lease with initial annual rent of $1.5 million and 3% annual escalations, alongside a short-term 1-year net lease for 48 acres. The blended initial cash cap rate for the transaction is 9% with a 4-year weighted average lease term. Broadstone intends to redevelop the 48 acres in partnership with the Sansone Group, with potential to support up to 440,000 buildable square feet of industrial development, targeting low to mid-7% cap yields on cost.
Project Triboro Data Center Development Update
Broadstone has invested approximately $106 million in Project Triboro, focusing on advancing zoning, power, and tenant identification. Site work is progressing to a pad-ready condition, including civil infrastructure, with an expected capital commitment of less than $15 million for this year. A 1 gigawatt power commitment is supported by existing generation capacity, with PPL planning new infrastructure construction from summer 2027 to summer 2030. The first phase of energization (300 MW) is anticipated between Q4 2027 and Q1 2028. While the Olyphant Borough Council initiated a 180-day review for a data center zoning amendment, the company remains confident in its path forward, having filed a permit application asserting permitted-by-right status.
Capital Recycling and Portfolio Management
During the quarter, Broadstone disposed of one industrial asset for $12 million at a 5.6% cap rate. Subsequent to quarter-end, the company completed the sale of three additional assets for total gross proceeds of $54.8 million, including two opportunistic dispositions totaling $50.4 million at a weighted average cap rate of 6.3%. These dispositions are part of an ongoing strategy to refine the portfolio, manage credit and lease rollover exposure, and opportunistically recycle capital when market pricing allows for accretive outcomes.
Leasing Activity and Portfolio Performance
The in-place portfolio demonstrated strong same-store rent growth of 2.8% year-over-year. Broadstone addressed half of its 22 scheduled 2026 lease expirations, achieving a weighted average recapture rate of 119% and an average new lease term of 6 years on extended leases. The remaining 11 leases, representing only 2% of ABR, are actively being managed. The company reported no bad debt in Q1 and 100% rent collection, reflecting the strength of its portfolio and proactive asset management.
S&P 600 Index Inclusion and Equity Capital
Broadstone Net Lease announced its inclusion in the S&P 600 Index, which is expected to provide incremental support for its improving cost of equity capital and expand its investor base through increased daily liquidity. During the quarter, the company raised $71 million of equity under its ATM program at a weighted average price of $19.13 per share, bringing total gross proceeds to approximately $82.5 million on a forward basis at a weighted average price of $19.02. Future issuances are expected to remain measured and opportunistic, balancing share price and investment opportunities.