Inquiring about the conviction level in finding tenants for the Charles River Labs redevelopment, the role of Sansone Group, and the company's appetite for similar structured deals involving future build-to-suits.

The company has high conviction due to the premier location, strong industrial area, and below-market cost basis. Sansone Group is a key partner. The deal provides flexibility for multiple build-to-suit opportunities (4 buildings, ~100k sq ft each, shallow bay industrial) with target yields in the low-to-mid 7% cap range. Management expressed strong appetite for similar creatively structured deals that unlock value. “If we can find deals like this, we've got all sorts of appetite for it, because this is the place where our strategy really shows the value of the build-to-suit, focusing on real estate operation and investment and not just doing the commodity net lease trade.”

Seeking clarity on the process to resolve the 180-day zoning review for data centers in Olyphant Borough and any potential risks of further delays.

The 180-day period is an 'up to' timeframe, and the council aims to move quickly. Pennsylvania law prevents outright prohibition of land uses. Project Triboro aligns with the proposed amendment. The company filed a zoning permit application asserting permitted-by-right status to protect its rights and timeline, and does not expect any impact to the anticipated 2026 decision timeline. “Pennsylvania does not allow a prohibition of any type of use within any municipality. You can certainly set the standards, as Ryan walked you through, for setbacks and for studies and things like that, but there is nothing that can be absolutely prohibited.”

An assessment of the opportunity set for regular acquisitions, observed changes in cap rates, and the potential to exceed current guidance through such activity.

The company is observing increased transaction activity, particularly in industrial portfolio deals. They remain disciplined in capital deployment, noting that current guidance is conservative. With an improving cost of capital and clearer view of the opportunity set, there is potential to increase acquisition activity and potentially push guidance higher in the second half of the year. “As the opportunity set starts to form and as we have a better view on what the longer-term cost of capital is going to be for us with the better and more constructive stock price, hopefully there's an opportunity for us to do more and potentially push that guidance towards the back half of the year.”

BNL

Broadstone Net Lease (BNL) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Real Estate· Apr 30, 2026

Source: earnings call transcript

Executive summary

Broadstone Net Lease Q1 FY26 — Strong AFFO Growth and Strategic Build-to-Suit Expansion

Broadstone Net Lease delivered strong first-quarter results, driven by robust AFFO growth and strategic investments in its build-to-suit platform, including significant new development projects and a creatively structured acquisition. The company is actively advancing its Project Triboro data center opportunity while maintaining financial flexibility and disciplined capital allocation. Management remains confident in its long-term growth strategy despite ongoing market dynamics.

Highlights

Delivered 5.6% AFFO growth year-over-year.
Added over $90 million in new build-to-suit development projects year-to-date.
Realized no bad debt during the quarter, with 100% rent collection.
Addressed nearly half of 2026 lease maturities with a 119% recapture rate.
Included in the S&P 600 Index, expected to support cost of equity capital.

Concerns

Olyphant Borough Council chose not to adopt the proposed data center zoning amendment as written, initiating a 180-day review period.
Seller pricing expectations for stabilized transactions, particularly cap rates, do not always align with the company's view of underlying risk profile.

Guidance & targets

Category	Target	Timeline	Confidence
G&A expenses	well controlled low materiality	FY26	High
AFFO per share	$1.53 to $1.57 high materiality	FY26	High
Lost rent assumption	75 basis points medium materiality	FY26	Medium
Active build-to-suit pipeline target	$350 million to $500 million range high materiality	Ongoing	High
Project Triboro optimal path decision	decision by year-end 2026 high materiality	FY26	High

BNL operating KPIs by quarter

BNL operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Capital expenditures Build-to-suit developments	$99.4M In total, we deployed $171.9 million during the quarter, including $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. Source: earnings call transcript	$77.3M During the second quarter, we invested $91.5 million, comprised primarily of $77.3 million in build-to-suit developments and $13.5 million in transitional capital. Source: earnings call transcript	-22.2%
Capital expenditures Transitional capital projects	$10.4M In total, we deployed $171.9 million during the quarter, including $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. Source: earnings call transcript	$13.5M During the second quarter, we invested $91.5 million, comprised primarily of $77.3 million in build-to-suit developments and $13.5 million in transitional capital. Source: earnings call transcript	+29.8%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Amazon New state-of-the-art sub-same-day distribution center build-to-suit

Located in Sarasota, Florida, sourced through an existing developer relationship.

Academy Sports New retail development build-to-suit

Located in Magnolia, Texas, directly sourced through the tenant and delivered in partnership with a new developer relationship.

Tesla New presort battery recycling facility build-to-suit

Located approximately 3 miles from the Gigafactory in Austin, Texas. Closed on land and started funding subsequent to quarter end.

Charles River Laboratories Acquisition of a 60-acre campus via sale-leaseback, including a long-term net lease and a short-term lease for redevelopment. $61.2 million 12-year net lease and 1-year net lease

Campus located approximately 20 miles north of Boston, Massachusetts. Partnered with Sansone Group for potential redevelopment of 48 acres.

Undisclosed Disposition of an industrial asset. $12 million

Industrial asset with 7 years of remaining lease term.

Undisclosed Opportunistic disposition of two assets. $50.4 million

Completed subsequent to quarter end as part of capital recycling strategy.

Undisclosed Sale of a small vacant asset.

Completed subsequent to quarter end as part of ongoing portfolio management.

Capital programs

Project Triboro Data Center Development underway

Spent to date: $106 million

Benefit:1 gigawatt power commitment

Advancing site's foundational elements and key work streams (power, zoning, leasing). Site work includes erosion/sediment controls, clearing, grading, mine remediation, mass grading, core civil infrastructure. PPL to construct new substation and 8 miles of transmission lines (Summer 2027-Summer 2030).

Charles River Labs 48-acre Industrial Redevelopment planned

Benefit:Potential to support up to 440,000 buildable square feet of industrial development

Redevelopment of 48 acres of the 60-acre campus acquired from Charles River Laboratories, in partnership with Sansone Group. Site provides flexibility for multiple build-to-suit opportunities.

Risks & headwinds

Project Triboro Zoning Uncertainty Next 6 months

180-day review period initiated by Olyphant Borough Council for data center zoning amendment.

Mitigation:Company filed a zoning permit application asserting permitted-by-right status under current ordinance and will continue working with the council. No expected impact to anticipated 2026 timeline.

Stabilized Transaction Market Pricing Discrepancy Ongoing

Seller pricing expectations, particularly around cap rates, do not align with the company's view of underlying risk profile.

Mitigation:Remaining disciplined in acquisitions, not pursuing volume at the expense of quality. Focus on creatively structured deals and build-to-suit.

Home Furnishing Sector Exposure Ongoing

Home furnishings sales and foot traffic roughly flat; sector represents 2-ish percent, maybe mid-2% of portfolio.

Mitigation:Open to reducing exposure over time; pleased with resolution for American Signature with Gardner-White, which included a new 10-year master lease across 6 sites.

What to watch in Q2 FY26

Project Triboro Zoning Resolution

Next quarter

Current Olyphant Borough Council initiated 180-day review for data center zoning amendment.

Target Adoption of zoning amendment or confirmation of permitted-by-right status.

Why it matters

Clarity on zoning is crucial for advancing the data center development or alternative industrial use, impacting the project's timeline and value.

At its most recent meeting, Borough Council chose not to adopt the amendment as written and instead started a process giving it up to 180 days to address data centers in the ordinance. We will continue working with the council on the amendment during this period.

Find out whether BNL delivers this. Inve re-checks your case every morning.

Q&A highlights

Clarification on who bears the cost of universal site work for Project Triboro and the expected capital commitment for such work in the near term.

The company is responsible for universal site work (erosion control, clearing, grading, core civil infrastructure) which is independent of the ultimate use (data center vs. industrial). Costs specific to data center infrastructure are deferred. Expected capital commitment for this year is less than $15 million.

“I'd say total at the moment, probably for this year, less than $15 million.”

asked by Anthony Paolone · answered by Ryan Albano

3 min read 6 chapters

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.