Broadstone Net Lease, Inc. (NYSE:BNL) ("BNL," the "Company," "we," "our," or "us"), today provided an update on the Company's second quarter activity to date.

MANAGEMENT COMMENTARY

"I am pleased to provide a preview of our second quarter activity," said John Moragne, Chief Executive Officer. "Our portfolio continues to demonstrate its strength and resiliency with 100% collections through April and May. We continue to selectively find accretive opportunities to deploy capital in today's market including new acquisitions, continued investment in our existing properties, and attractive build-to-suit opportunities. We remain committed to our disciplined and prudent approach to capital allocation as we continue to navigate today's challenging market backdrop."

INVESTMENT ACTIVITY

During the second quarter, we invested $60.1 million in 4 properties at a weighted average initial cash capitalization rate of 7.3%. Investments were all industrial opportunities and consisted of $20.4 million in new property acquisitions, $7.0 million in revenue generating capital expenditures, and $32.7 million in development funding opportunities. The leases on new property acquisitions and revenue generating capital expenditures had a weighted average initial term of over 15 years and minimum annual rent increases of 1.9%. Year-to-date, we have completed investments totaling $80.1 million at a weighted average initial cash capitalization rate of 7.1%.
On May 22, 2023, BNL closed on the acquisition of the land in connection with the previously announced $204.8 million build-to-suit transaction, of which $32.7 million was funded through the date of this release and included in the development opportunities referenced above. The facility is projected to open in the third quarter of 2024, with rent commencing no later than October 15, 2024. During the 18-month construction period, BNL will earn capitalized interest at customary rates. Once completed, the facility will be leased to a leading distributor to retailers in the United States and Canada pursuant to a 15-year lease with multiple renewal options and 2.50% annual rent escalations, translating into a GAAP cap rate of 8.1%.
We currently have commitments to fund $13.5 million in revenue generating capital expenditures with existing tenants and $172.1 million in development funding opportunities.
During the second quarter, we sold four properties for proceeds of $69.4 million at a weighted average cap rate of 5.6% on tenanted properties. Year-to-date, we have sold seven assets for proceeds of $121.3 million at a weighted average cap rate of 5.7% on tenanted properties.

REAL ESTATE PORTFOLIO UPDATE

Collected 100% of base rents due through April and May for all properties under lease, and as of the date of this release our portfolio was 99.4% leased based on rentable square footage as of the end of the first quarter, with two of our total properties vacant and not subject to a lease.

About Broadstone Net Lease, Inc.

BNL is a real estate investment trust that acquires, owns, and manages primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. The Company utilizes an investment strategy underpinned by strong fundamental credit analysis and prudent real estate underwriting. As of March 31, 2023, BNL's diversified portfolio consisted of 801 individual net leased commercial properties with 794 properties located in 44 U.S. states and seven properties located in four Canadian provinces across the industrial, healthcare, restaurant, retail, and office property types.

Forward-Looking Statements

This press release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies, and prospects, both business and financial. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "should," "expect," "intend," "anticipate," "estimate," "would be," "believe," "continue," or other similar words. Forward-looking statements, including our 2023 guidance and assumptions, involve known and unknown risks and uncertainties, which may cause BNL's actual future results to differ materially from expected results, including, without limitation, risks and uncertainties related to general economic conditions, including but not limited to increases in the rate of inflation and/or interest rates, local real estate conditions, tenant financial health, property investments and acquisitions, and the timing and uncertainty of completing these property investments and acquisitions, and uncertainties regarding future distributions to our stockholders. These and other risks, assumptions, and uncertainties are described in Item 1A "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which BNL filed with the SEC on February 23, 2023, which you are encouraged to read, and is available on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company assumes no obligation to, and does not currently intend to, update any forward-looking statements after the date of this press release, whether as a result of new information, future events, changes in assumptions, or otherwise.

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Broadstone Net Lease Provides Business Update