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DATE

Thursday, April 30, 2026 at 11 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — John Moragne
  • President and Chief Investment Officer — Ryan Albano
  • Chief Financial Officer — Kevin Fennell

TAKEAWAYS

  • Adjusted Funds From Operations (AFFO) -- $76.9 million, or $0.38 per share, reflecting a 5.6% increase year over year driven by portfolio and investment activity.
  • Same-Store Rent Growth -- 2.8% annual increase, attributable to contractual rent escalations and prior releasing.
  • Capital Deployment -- $171.9 million deployed, including $61.2 million in new acquisitions, $99.4 million in build-to-suit development, and $10.4 million in existing asset improvements.
  • Build-to-Suit Lease Pipeline -- Approximately $382 million of high-quality development in progress, expected to yield over $28 million in incremental annual base rent (ABR) as completed.
  • Recent Build-to-Suit Investments -- Three completed with a blended initial cash cap rate of 7.2%, straight-line yields of 8.3%, and a weighted average lease term of 14 years.
  • Key Acquisition: Charles River Laboratories Campus -- $61.2 million invested in Boston-area property, combining a long-term 12-year lease at $1.5 million initial rent (3% annual escalator) and a short-term lease at $4 million rent, for a blended 9% initial cash cap rate.
  • Disposition Activity -- $12 million in asset sales in quarter at a 5.6% cap rate, with $54.8 million of additional sales (two at 6.3% cap rate) completed after quarter end.
  • Lease Recapture Rate -- Achieved 119% weighted average recapture rate on half of 2026 lease maturities addressed, with an average six-year new lease term.
  • Portfolio Rent Collection and Bad Debt -- 100% rent collection, no lost rent in the quarter, and no realized bad debt.
  • G&A Expenses -- Core general and administrative expenses of $7.8 million, up 5.4% year over year, driven by one-time items and tax timing but on track with guidance.
  • Leverage -- Quarter-end pro forma leverage of 5.8 times, unchanged from prior quarter, maintaining ~$600 million on the revolver and $82.5 million unsettled equity.
  • S&P SmallCap 600 Index Inclusion -- Company added to the index during the quarter, with management highlighting improved equity cost and liquidity effects.
  • Equity Issuance -- Raised $71 million at an average price of $19.13 via ATM during the quarter, bringing gross forward proceeds to $82.5 million at $19.20 average.
  • Development Opportunity Pipeline -- Actively evaluating $1.3 billion in new build-to-suit opportunities, maintaining a target pipeline size in the $350 million-$500 million range.
  • Project Triborough Update -- ~$106 million invested to date; key milestones in power (one gigawatt capacity with phased energization beginning 2027), zoning (active process, with a zoning permit application filed), and active tenant discussions.

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RISKS

  • G&A expense rose 5.4% year over year due to one-time and timing items, but management reiterated guidance adherence.

SUMMARY

Management confirmed the ongoing execution of its build-to-suit and relationship-driven strategies, delivering transactional results aligned with long-term shareholder value creation. They emphasized flexibility in capital allocation, rightsizing industrial concentrations, and proactive approaches to lease rollover and credit exposure. Strategic pipeline growth, both in scale and project diversity, was supported by improved market access after index inclusion and observed momentum in new tenant and developer relationships.

  • Management maintained its 2026 per-share guidance range of $1.53 to $1.57 and reiterated key assumptions have not changed, despite 100% rent collection and no lost rent to date.
  • Asset disposition strategies were described as balanced, combining risk mitigation through credit or noncore real estate sales and opportunistic cap rate arbitrage on unsolicited offers.
  • Charles River Laboratories’ tenancy was cited as having S&P BB+ and Moody’s Ba1 ratings, $4 billion plus revenue, 2.8 times leverage, and a fixed charge coverage ratio of 3.5.
  • Industrial assets are expected to comprise 65%-75% of the future portfolio allocation, with retail and restaurant at 25%-35% as office and clinical healthcare holdings decrease.
  • Universal site work on Project Triborough will require less than $15 million in 2026, deferring major capital outlay until further advancement and decision milestones.
  • Portfolio same-store growth was supported by proactive leasing, with management reporting a 119% recapture rate on expiring leases primarily within industrial assets.
  • Build-to-suit completions average 12-18 months from commitment to stabilization, structuring consistent future rent commencements through 2027 and beyond.
  • No material updates were provided on Claire’s or Red Lobster exposures; the re-tenanting and asset sales process is ongoing but deemed non-material to the guidance.
  • Management confirmed that powered land sale at Project Triborough remains an open exit option and continues engagement with hyperscale tenants on lease and ownership structures.

INDUSTRY GLOSSARY

  • Build-to-Suit: A development project where a property is constructed to the specifications of a specific tenant, typically accompanied by a long-term lease commitment.
  • Recapture Rate: The percentage of prior rent (or more) achieved on new or renewed leases compared to expiring ones, indicating effective rent roll-over performance.
  • Cap Rate (Capitalization Rate): The initial yield of a real estate investment calculated as the property’s net operating income divided by purchase price or cost basis, used for valuation and return assessment.
  • Annual Base Rent (ABR): The contractual rent, stated on an annualized basis, derived from a lease agreement exclusive of expense reimbursements and escalations.
  • ATM (At-the-Market) Program: An equity issuance mechanism allowing a company to sell shares directly into the market at prevailing prices, providing flexible capital raising.

Full Conference Call Transcript

John Moragne: Thank you, Brent. Good morning, everyone. After a strong finish to 2025, we carried that momentum into 2026, delivering 5.6% AFFO growth year over year, continuing to execute on our investment strategy, and driving strong operational outcomes across our in-place portfolio. We advanced our committed build-to-suit platform through both existing and new relationships, adding over $90 million in new development projects year to date, invested over $60 million in a compelling acquisition, realized no bad debt during the quarter, and addressed nearly half of our 2026 lease maturities with a recapture rate of 119%—a strong start to the year.

Collectively, our results reflect the progress we have made executing on our core building blocks and underscore the strength of our high-quality, mission-critical portfolio and the increasing visibility we are providing to long-term sustainable growth. 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. As previously announced earlier in the quarter, we added two additional build-to-suits, including a new state-of-the-art subsame-day distribution center located in Sarasota, Florida for Amazon, sourced through an existing developer relationship.

We also added a retail development for Academy Sports in Magnolia, Texas, a rapidly growing suburb of Houston, that was directly sourced through the tenant and delivered in partnership with a new developer relationship. Continuing our momentum, subsequent to quarter end and as we announced in our earnings release last night, we closed on the land and started funding a new presort battery recycling facility for Tesla that will be located approximately three miles from the Gigafactory in Austin, Texas.

Together, these three build-to-suit investments represent high-quality real estate paired with top-tier, investment-grade-quality tenants that blend to a first-year initial cash cap rate of 7.2% with attractive straight-line yields of 8.3%, a weighted average lease term of 14 years, and valuations on each asset that are likely at least 75 to 100 basis points below our development yields, further demonstrating the value creation of our build-to-suit strategy. As anticipated, on April 1, the second of two maintenance, repair, and overhaul hangars for Sierra Nevada Corporation rent commenced, supporting its continued work with the U.S. Air Force replacing an aging fleet of Nightwatch planes.

We are proud to be a part of this effort, and I could not be more pleased to have both projects reach stabilization on time and under our budgeted project investments, underscoring our team's ability to execute on our strategy and create value for our shareholders, regardless of broader macroeconomic uncertainty and frequent market-moving headlines. With the completion of Sierra Nevada and the three new projects I just walked through, our build-to-suit pipeline remains in a strong position, with approximately $382 million of high-quality development scheduled to reach stabilization throughout 2026 into 2027, providing visibility to over $28 million of new incremental ABR.

Additionally, our opportunity set remains robust, driven largely by existing relationships, and Ryan will go into more detail on our active build-to-suit pipeline in a few moments. During the quarter, we invested $61.2 million in a 60-acre campus approximately 20 miles north of Boston, Massachusetts, tenanted by Charles River Laboratories, a leading global pharmaceutical and biotechnology contract research organization. The sale-leaseback investment includes a long-term 12-year net lease with initial cash rents of $1.5 million and annual rent increases of 3%, and a short-term one-year net lease with cash rents of $4 million, for a blended 9% initial cash cap rate and four years of weighted average lease term.

We intend to redevelop approximately 48 acres of the 60-acre campus that are subject to the short-term lease in partnership with the Sanzone Group, as part of our growing build-to-suit development program. We think this transaction is yet another great example of creatively driving additional value. Turning to Project Triborough. As I said during our last call, our goal for 2026 is to advance three key workstreams related to a potential data center development: zoning, power, and tenant identification. All three of these workstreams continue to advance, and our goals and timelines for each have not changed.

To date, we have invested approximately $106 million in the project through our transitional capital platform, maintaining meaningful optionality as we evaluate the best path forward. The highest and best use for this site remains a hyperscale data center campus, and our backup option for a multibuilding industrial build-to-suit development also remains intact. We continue to be immensely excited by this opportunity, and by the end of the year, we expect we will be able to decide our best path forward for this project—whether that be a powered land sale, a commitment to stay involved on a powered shell development, or a decision to pursue multibuilding industrial development—and communicate the same to our investors.

I am confident in our ability to deliver. Ryan will provide a more detailed update in his remarks, and you can expect we will provide relevant updates as we have them. Finally, to cap off a strong quarter of results and execution, I also want to highlight an important milestone for Broadstone Net Lease, Inc.: our inclusion in the S&P 600 index. We view our inclusion as providing incremental support for our improving cost of equity capital and believe it will help expand our investor base over time, with the increased amount daily liquidity has helped provide. More broadly, we have been encouraged by improving market sentiment around REITs and the progress we have seen in our equity multiple.

As our cost of equity improves, it expands our opportunity set and enhances our ability to fund growth in a disciplined and accretive manner. As you saw in our earnings release last night, we raised $71 million of equity under our ATM during the quarter at a weighted average price of $19.13, bringing total gross proceeds to approximately $82.5 million on a forward basis at a weighted average price of $19.20. Going forward, we expect issuances to remain measured and opportunistic as we evaluate our cost of capital alongside our investment opportunities. With that, I will hand the call over to Ryan and Kevin to take you through some of these topics in greater detail.

Ryan Albano: Thank you, John, and thank you all for joining us today. As John highlighted, the first quarter clearly demonstrated the effectiveness of our strategy and the strength of our team and portfolio. In today's environment, we believe creativity and structure are just as critical as sourcing. Our focus is on transactions where thoughtful structuring can materially enhance outcomes—driving higher yields, embedding growth, and protecting downside through multiple pathways. A strong example is the $61.2 million investment we completed this quarter with Charles River Laboratories in Wilmington, Massachusetts. The transaction involves the acquisition of a 60-acre campus approximately 20 miles north of Boston, delivering both a long-term accretive sale-leaseback and a strategically structured short-term investment with meaningful future value potential.

The two leases together generate approximately $5.5 million of first-year cash rent, representing a blended initial cash cap rate of 9%. As John noted, the first lease is a 12-year net lease, with initial annual rent of $1.5 million and 3% annual rent escalations, nearly 100 basis points above our current and increasing weighted average rent growth. The second lease is a short-term lease with a term of one year covering approximately 48 acres of the campus. This shorter lease duration was intentional, allowing us to preserve near-term cash flow while maintaining flexibility to unlock value through redevelopment. Specifically, the site has the potential to support up to 440 thousand buildable square feet of industrial development.

The campus benefits from a prime infill location with access to a population of more than 4 million people within a 30-mile radius, along with strong connectivity to major transportation corridors and labor pools—factors we believe underpin sustained long-term demand. Importantly, we did not underwrite this as a single-outcome investment. The 48-acre parcel provides flexibility for build-to-suit opportunities, effectively extending our pipeline of committed development projects. While we actively pursue this upside, we are supported by a strong underlying land value and the optionality it affords, reinforcing our conviction in this investment.

Overall, this transaction highlights our ability to leverage relationships and apply a creative, solutions-oriented approach to structuring investments that deliver attractive initial yields while positioning us to generate additional long-term value. As a broader update on our development pipeline, following the early and under-budget delivery of the two MRO facilities for SNC, we currently have 11 in-process developments representing approximately $382 million of total projected investment. These projects are expected to generate strong initial cash yields of 7.3% and weighted average straight-line yields of 8.4%, supported by a weighted average lease term of 12.9 years and annual rent escalations of 2.5%. Importantly, these tenant-driven developments are structured to mitigate traditional development risks, including construction timing and cost pressures.

As we have discussed, build-to-suit remains a core pillar of our differentiated strategy and a key driver of embedded growth visibility. We aim to consistently maintain an active, committed build-to-suit pipeline in the $350 million to $500 million range, and we continue to see a robust set of opportunities to support that run rate. Currently, we are actively evaluating approximately $1.3 billion of build-to-suit opportunities across both existing and new relationships, reinforcing our ability to drive visible, long-term growth. In the stabilized transaction market, we continue to see steady deal flow, including several larger portfolio opportunities, particularly within industrial. That said, we remain disciplined.

In many cases, seller pricing expectations—particularly around cap rates—do not align with our view of the underlying risk profile, and we will not pursue volume at the expense of quality. Dispositions remain an important component of our capital allocation strategy. On a routine basis, we use dispositions to refine the portfolio and proactively manage credit, lease rollover, and sector exposure. Opportunistically, when market pricing allows us to recycle capital on an accretive basis, we will act. This was reflected in our $12 million disposition during the quarter at a 5.6% cap rate on an industrial asset with seven years of remaining lease term.

Subsequent to quarter end, we 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%, as well as the sale of a small vacant asset as part of our ongoing portfolio management. Turning to our in-place portfolio, same-store performance remains strong with 2.8% year-over-year growth driven by contractual rent increases and successful releasing activity in prior periods. At the start of the year, we had 22 leases scheduled to expire in 2026. We have already addressed half of those leases, achieving a weighted average recapture rate of 119% and an average new lease term of six years on extended leases.

For the remaining 11 leases, representing approximately 2% of ABR, we are well underway in our leasing efforts and expect continued positive outcomes. Finally, with respect to our watch list, activity this quarter was relatively uneventful, reflecting the strength of our portfolio and proactive asset management efforts in recent periods. As noted last quarter, Gardner White Furniture assumed all six locations previously occupied by American Signature as part of its bankruptcy process. Since then, we have executed a new 10-year master lease across all six sites, further enhancing what was already a strong outcome.

Now shifting our focus to Project Triborough, and building on John's earlier update, it may be helpful to frame where we are in the overall development life cycle. Over the past several months, our efforts have been focused on advancing the site's foundational elements while simultaneously progressing key workstreams across power, zoning, and leasing. This coordinated approach is intended to derisk the project, preserve flexibility around ultimate use, and position us to respond efficiently as milestones are achieved and market opportunities continue to evolve. We are actively advancing the site to a pad-ready condition, including the installation of erosion and sediment controls, clearing and grubbing, mine remediation, and mass grading.

This also involves completing the core civil infrastructure required to create developable pads, such as stormwater management systems, internal access roads, and underground utilities—universal site work that must be completed regardless of whether the site is ultimately developed as a hyperscale data center campus or as multiple industrial buildings. We are approaching this site work in a deliberate, phased manner, carefully sequencing activities to align with the project's multiphase nature and preserve maximum flexibility as we pursue value creation for our shareholders. On the power side, this continues to be one of the defining attributes of the site.

Importantly, the one gigawatt power commitment is supported by existing generation capacity, and we are not reliant on future power generation buildout to establish that supply. Our current focus is on coordinating the infrastructure required to transmit and deliver the power to the site, as well as developing the on-site infrastructure necessary to receive it as it becomes available. In this regard, PPL plans to construct a new substation switchyard along with approximately eight miles of new transmission line. These upgrades are intended to support broader load growth and new customer demand, including Project Triborough, while also enhancing overall system reliability. PPL currently anticipates commencing construction in 2027 with completion targeted for 2030.

At the site level, we plan to develop a dedicated substation to receive the delivered power, with the first phase of energization—consisting of 300 megawatts—currently anticipated to commence between 2027 and Q1 2028, with the additional 700 megawatts to follow thereafter. We remain in close and ongoing coordination with PPL and are actively working through the required electric and construction service agreements necessary to advance Project Triborough. With respect to zoning, in recent months, Alphonse Borough has considered amending its zoning ordinance to expressly allow data centers in the CM-2 District, where Project Triborough is located.

We understand Pennsylvania municipalities must accommodate all lawful land uses somewhere within their boundaries, including data centers, but may regulate them through standards such as siting rules, setbacks, and required studies and reports, which are typical for real estate development. As drafted, Project Triborough aligns with the framework contemplated by the proposed amendment. 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.

To protect our rights in the meantime, we filed a zoning permit application last week and formally asserted that the proposed data center campus is permitted by right under the current ordinance and may proceed as planned. Accordingly, despite heightened attention on data center development, we remain confident in our path forward and do not expect any impact to our anticipated 2026 timeline. Finally, with respect to leasing efforts, we are currently engaged in active discussions with multiple hyperscale users that have expressed strong interest in Project Triborough. We look forward to providing updates as these discussions progress, and as we gain greater clarity on potential structures and timing.

As John has consistently stated, our objective is to have clarity on the optimal path for Project Triborough by the end of 2026 based on the progress achieved relative to several milestones, including zoning, power, and leasing, and we remain focused on maximizing shareholder value while preserving optionality. With that, I will now turn the call over to Kevin.

Kevin Fennell: Thank you, Ryan. During the quarter, we generated adjusted funds from operations of $76.9 million, or $0.38 per share, representing a 5.6% increase over 2025. Results benefited from strong same-store rent growth of 2.8% and from recent investment activity and build-to-suits reaching stabilization. The quarter's results also notably benefited from no lost rent realized during the quarter and lower nonreimbursable property expenses. G&A remains well controlled, core expenses totaling $7.8 million during the first quarter. While this represents an increase of 5.4% year over year, this change was largely impacted by one-time or timing-related expenses, including employer tax expense for stock vesting and professional services. We remain well on track to achieve our G&A guidance.

With respect to the balance sheet, we ended the quarter with pro forma leverage of 5.8 times, unchanged quarter over quarter. At quarter end, we had approximately $82.5 million of unsettled equity and nearly $600 million available on our revolver. With limited debt maturities through 2027, we maintain sufficient financial flexibility as we look ahead. Last week, our board of directors elected to maintain our $0.[inaudible] dividend per share, payable to holders of record as of 06/30/2026 on or before July 15. Lastly, we are maintaining our 2026 per share guidance range of $1.53 to $1.57, with no changes to our key assumptions.

Despite no bad debt in the first quarter, we are also maintaining our full-year assumption of 75 basis points of lost rent within our 2026 guidance and plan to revisit this assumption throughout the year. It is always worth reminding everyone that our per share results for the year are sensitive to the timing, amount, and mix of investment and disposition activity, as well as any capital markets activities that may occur during the year. Please reference last night's earnings release for additional details. We will now open the call for questions. Thank you.

Operator: We will now begin the question-and-answer session. If you would like to ask a question today, please do so now by pressing star followed by the number one on your telephone keypad. If you change your mind or you feel like your question has already been answered, you can press star followed by 2 to remove yourself from the queue. Our first question today comes from Anthony Paolone with JPMorgan. Please go ahead. Your line is now open.

Anthony Paolone: Great. Thanks, and good morning. Just on Project Triborough, you mentioned that there will be some infrastructure improvements there that are done irrespective of what the ultimate use of the land is. Are you all responsible for that, and just wondering what that capital commitment might be in the meantime.

Ryan Albano: Sure. This is Ryan. Yes, we are talking about that universal site work—that is site work and infrastructure improvements that we would be looking at regardless of whether we were going to proceed with data center usage or industrial usage. The infrastructure that would relate specifically to the data center itself, I think the majority of that cost is being pushed off at this point until we are a little further along in our decision-making process.

Anthony Paolone: Okay. But it sounds like then the rest of those costs are fairly small, or should we expect bigger checks to be written?

Ryan Albano: In the near term, I would say total at the moment, probably for this year, less than $15 million.

Anthony Paolone: Got it. And then just my other one relates to the Boston acquisition. Can you talk a bit more around conviction level that you will find some tenants there to take on that risk, Samsung's role in all of that, and also just as a step back—do a transaction like that and Triborough, for instance—your appetite to take on what I guess is sort of land risk for future type of build-to-suits?

John Moragne: Yeah. Thanks, Tony. This is John. I think it is a great example of the ways that our strategy can unlock value by creatively structuring solutions for our developer partners and clients. This is not the first time that we have done something that is a little more creatively structured with Sanzone. We did it with Sunset Hills. We are doing it with Triborough. We have it with Charles River, and we have other things in the hopper that we are considering with them. They continue to grow as a fantastic partner for us with our business as we are helping them grow theirs.

This project was particularly attractive to us because there were certain things that needed to be solved for the overall transaction to move forward for Charles River. They needed a long-term sale-leaseback for the assets that they were looking to double down on and continue to invest in, and then they had some assets that they were looking to move on from but needed a transition period for. This is a premier location in the Northern Boston market right off of I-93 and that I-93/I-95 corridor—strong industrial area. We have underwritten this, as you heard from Ryan, to 440 thousand square feet of industrial build.

It is probably four buildings somewhere in the, give or take, 100 thousand square foot range. You are talking shallow-bay industrial, which is perfect for that space. Our cost basis is slightly below market, so we feel like if we did need to get out of this, there is going to be interest in the site where we are going to be able to make some money on the back end whether we develop it or not. But our intention is to develop this. We think there is a good opportunity for build-to-suit in this area. We have already had interest from one tenant for a build-to-suit on site.

The way we pencil this out is we are looking at yield-to-cost in that low- to mid-7% range and, on a stabilized basis, you are going to have values in these assets in the mid- to high-5% cap range. So this potentially is a home run for us, and we are very excited about it. But we also made sure that as we underwrote it, we found good optionality.

So to answer your question about appetite for more—if we can find deals like this, we have all sorts of appetite for it because this is the place where our strategy really shows the value of the build-to-suit focus on real estate operation and investment, and not just doing the commodity net lease trade that we have seen often in other places.

Anthony Paolone: Okay. Got it. Thank you.

Operator: Thank you. Our next question comes from Eric Borden with BMO. Eric, please go ahead.

Eric Borden: Hey, good morning. Thanks, everyone. Just kind of going back to Project Triborough and around the council decision to take 180 days to address the data centers in the ordinance. Just curious what needs to happen there to get that cleared and you are able to kind of move forward with data center development. And is there any risk around the council to push that 180-day review even further out? Thank you.

John Moragne: Yeah. So 180 days is “up to.” Our understanding is that the council wants to move this forward as quickly as possible, although it was prudent for them to take the 180 days. I think it is important—there are other interests in land in that particular park besides us. So it does not change our timeline. As you heard Ryan say, by the end of 2026, which is what I have been saying for a long time, we are looking to have zoning, power, and tenant interest solidified so we can make the right decision to maximize value. And, you know, sometimes real estate development work can be a little messy—zoning in particular.

So none of this is out of the ordinary. None of it is a problem. We will work through it over time, and we expect to stay on the timeline that we have announced without any hiccups.

Eric Borden: Great. Thanks. Then you were active on the ATM this quarter. How should we be thinking about equity issuance for the rest of the year, and what conditions would lead you to accelerate or pause the issuance here? Just obviously, share price is a big factor, but just, you know, capital and so on and so forth. Thanks.

John Moragne: Yeah. Share price is a big factor for sure. I think “opportunistic” is the right word to use. It is entirely dependent on both share price—which is far more constructive than it was; we have been very excited to see the increase in the returns that we have been providing on the share price, certainly including the 600 index, which was a wonderful surprise—but then it is also opportunistic related to our opportunity set and the pipeline.

With the types of deals that we can see, if we find other Charles River-type deals or opportunities to deploy capital in an accretive manner—and as you know, our focus is on direct, relationship-based deals like Charles River and some of these others—put those two things together, and there may be more opportunity to do this in the future.

Eric Borden: Right. Appreciate it.

Operator: Thank you. Our next question comes from Jay Kornreich with Cantor Fitzgerald. Jay, please go ahead.

Jay Kornreich: Hi. Thanks very much. I guess first off, just following up on that last question, how do you assess the opportunity set for regular acquisitions currently? How is the pipeline? Are you seeing any changes in cap rates? And do you see an opportunity to maybe push what is already embedded in guidance throughout the year? What are your thoughts on that?

John Moragne: Yeah. We are certainly seeing increased transaction flow—more portfolio deals, more industrial portfolio deals—right down the middle of the fairway for things that we are looking at. We are having an increasing number of conversations with our relationships—tenants, sponsors, things like that—and finding good opportunities. We are being really disciplined about where we deploy capital. There was not a ton that we needed this year to hit our guidance range from a growth standpoint. We are allocating a lot towards the build-to-suit program. As everyone knows, that is where the focus is for us for the long-term, derisked, attractive, accretive growth into the future. But there are incremental deals that are out there that are interesting to us.

We are spending time on them. And just like last year, we are starting at a place where our guidance and our assumptions around this are relatively conservative in terms of what we think we can do. And 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 is an opportunity for us to do more and potentially push that guidance towards the back half of the year.

Jay Kornreich: Okay. Appreciate that. And then, moving to the core part of the company with the industrial build-to-suits, you have announced the target of $350 million to $500 million of new deals annually and also mentioned evaluating a really robust $1.3 billion of new development opportunities. Can you maybe just comment on what is driving such an increase in volume being evaluated? Is it really just the Broadstone Net Lease, Inc. name brand getting stronger in the development space? And within that, is it safe to say you feel pretty good about hitting that target in 2026?

John Moragne: Yeah. We feel very good about hitting that target. We have a lot of opportunities we are evaluating right now. I think it is a handful of things. One, I have to give all the credit to the team. Ryan and Will Garner, Ryan Sam DeLemos, Ryan Rehauser—the folks that are really driving the build-to-suit development process for us—are hitting the ground and really making a lot of phone calls, reaching out to their contacts, finding new relationships, really honing in on existing relationships, getting views of entire pipelines of deal flow to see what we have got there. And then it is also that we are getting some calls. Our name is getting out there.

People have heard what we have been able to do. The referral network is great. You do a good job for one developer and you provide a solid outcome; they are more likely to recommend you to somebody who is in a different geographic area or operates in a different type of retail or industrial space. So the team is working really hard to build out this pipeline, and then we are also getting a little bit lucky as the name gets out there and the space expands and people are starting to call us as well.

So all of those things are putting us in a great spot to execute on the strategy and to hit the numbers that we plan.

Jay Kornreich: Okay. Thanks. I will hold it there. Appreciate it.

Operator: Thank you. Our next question comes from Caitlin Burrows with Goldman Sachs. Caitlin, please go ahead.

Caitlin Burrows: Hi. Good morning, everyone.

Ryan Albano: Good morning.

Caitlin Burrows: As we think of the incremental build-to-suit announcements and what it means for 2027 completions, can you give some parameters or a range of how many quarters would you say is average for a project to get completed? Obviously, we could look at what you have in the disclosure right now, but is it four? Is it more? I am just wondering if incremental 2026 announcements that are larger than, say, $5 million at this point could open in 2027, or would it be later in 2027?

John Moragne: Yeah. Good question. We usually work on an assumption of, on average in the pipeline, about 15 months. Certainly there are ones that come inside that and others that take a little bit more, so call it 12 to 18 months, generally speaking. So there is a handful of things that could come in 2027. But at this point, a lot of our attention has been filling out the pipeline for 2027 so we are having that consistent rent commencement from the build-to-suit pipeline over time.

There are a handful of things that are near completion right now that should add to that, and then the stuff that is a little bit higher up in the pipeline would likely be more into 2027.

Caitlin Burrows: Got it. Okay. And then maybe just on the tenant side, last quarter you brought up the Claire’s location and how you were evaluating to either sell or re-tenant that, and then also taking another look at the Red Lobster exposure. So wondering if you have any update on either of those.

John Moragne: Yeah. Not really. Claire’s—we are still working through the releasing and the sale process. No announcements to make on that front. We still have time to work through it, so we still feel good there. And then on Red Lobster, we have not had any material change in the position. We continue to monitor them, and we continue to look for opportunities for us to reduce that exposure over time while finding accretive ways to dispose those assets. But no material updates on either one. Thanks.

Operator: Thank you. Our next question comes from Analyst with Morgan Stanley. Please go ahead.

Analyst: Hey. Good morning. This is Jenny on for Ron. Just a follow-up on the tenant health. So the bad debt guide—you still hold 75 basis points for the year given there is no lost rent in Q1?

John Moragne: Yeah. So no lost rent in Q1, 100% rent collection, which we feel great about. It is still early—we always have to remind ourselves that it is still the first half of the year—and so we have always taken the position that we will reevaluate our bad debt assumption at least halfway through the year, so at the end of Q2. So, yes, we are still holding it at 75, but that is just our more conservative stance that we have taken historically. We said at the beginning of the year we would leave it until at least after Q2.

Analyst: Got it. Just to follow up on the Charles River Laboratories acquisition, how should we think about the tenant health there given the lab has a challenging demand environment? It seems like they had a softer environment recognized in Q4. Maybe talk a little bit more about how you got comfortable with this type of tenant and, on the credit side, how you feel about it.

John Moragne: Yeah. We feel pretty good there. We do internal risk ratings, of course, but if you want to look at their agency ratings, S&P has them at BB+, Moody’s at Ba1. They have $4 billion plus of revenue; they are at 2.8 times on a leverage basis, and they have fixed charge coverage of three and a half. So we feel very good. The longer-term piece here—obviously, the short-term piece is the majority of the rents in the near term, the $4 million over the course of the next year—but the other piece of this is fairly small given the overall size of Charles River.

It is $1.5 million a year on a 12-year lease, so we feel very comfortable with the credit relative to our exposure.

Analyst: Got it. Thank you.

Operator: Our next question comes from Michael Goldsmith with UBS.

Michael Goldsmith: Good morning. Thanks a lot for taking my question. As you think about the dispositions in 2026—I think you did one in the quarter, you got three subsequent to the quarter—what characteristics most often trigger a sale here? Is it asset age? Is it tenant credit? Is it cap rate arbitrage or just kind of strategic noncore exposure?

John Moragne: Yeah. I think it comes on both sides of the barbell for us. There are the risk-mitigation-type sales, which hit a number of things you have talked about in terms of tenant exposure, real estate fundamentals, underlying credit—maybe there was a change in control that we did not particularly love—all sorts of stuff that could put something noncore, as you mentioned, into the bucket of one side of the barbell that we are just looking to reduce over time. And then, as Ryan highlighted in his comments, we are also very happy to do some cap rate arbitrage, and if there is an opportunistic sale that we can have, we are more than willing to do it.

We have a couple of the deals that we have done this year that were the result of unsolicited offers to sell at fantastic cap rates. And so part of our job is to make sure that we are accretively recycling our real estate, and when we can do that and put that back to work in a fashion that is going to help us grow our earnings, we are very pleased to do it.

Michael Goldsmith: Got it. Thanks so much for that. And then you had that exposure to American Signature and that has been streamlined with Gardner White taking over those boxes. But can you talk a little bit about how much exposure you have to the home furnishing space, how comfortable you are with this exposure, and are there plans to reduce this exposure over time?

John Moragne: Yeah. We do not have a huge exposure. I want to say it is in the 2% range, maybe mid-twos—just a couple of handful of tenants in there. We certainly would be open to reducing that exposure over time. If you look at consumer data over the last couple of quarters, home furnishings has been roughly flat in terms of sales and foot traffic. So it is not exactly growing, but it is not shrinking the same way that it was for a period of time once the post-COVID boom fell off and they all started experiencing a little bit of difficulties. But we are very pleased with the resolution for American Signature with Gardner White.

We think they have a great team in place and a great business model that they are going to be pushing through with our stores in addition to a handful of additional stores that they got from the American Signature bankruptcy. So we feel like we are in a great spot with that new master lease and 10-year term, but that does not mean that we would not look to reduce that over time depending on where we see demographic trends and sales trends going.

Operator: Thank you. The next question comes from Upal Rana with KeyBanc Capital Markets. Please go ahead.

Upal Rana: Great. Thank you. Kevin, on equity issuances, you sold $3.7 million during the quarter—I know this topic comes up often, but any updated thoughts there or likelihood to issue more or not would be helpful. Thank you.

Kevin Fennell: Yeah, sure. I think John addressed it for the most part a little bit ago, but it is all relative to the opportunity set. We are certainly working with a better cost of capital in the equity slice today versus the last three years, frankly. And so it has opened up the door on the margin, but we are still not looking to pour on in a big way. We get a question very often as an expansion of this, which is, should we be expecting some type of balance sheet reset and large overnight? And the answer is still no. So measured, opportunistic is still the thing.

Upal Rana: Okay. Great. That was helpful. And then could you give us an update on the total addressable market for the build-to-suit side? It just seems demand for development has increased broadly recently. So just wondering how that pool has changed, or competition, or any comments on pricing would be helpful.

John Moragne: Yes. The total addressable market for us is continuing to increase. Obviously there is the nationwide market, but then we are thinking more in terms of what we are seeing and what we have an opportunity for, and that has been growing quarter over quarter since we initiated the program. There is increased development activity. I think people are continuing to look for opportunities to onshore and nearshore, to increase the sophistication of their facilities.

We have seen it with some of the work that we have done as people are getting out of older facilities and looking to put in narrow racking, robotics—all the things that they can do with a build-to-suit that they cannot necessarily do with just walking into a blank spec. And then I think you even saw with today’s GDP numbers that even though the consumer is a little bit more muted than people would like, you are seeing a huge increase in investment on the business side with 10.4% growth on a period-over-period basis. So people are looking to put money to work. They are looking to get into the right types of buildings for their business.

They are looking to make investments into the equipment that is going to help them grow their businesses as well. So we see a huge amount of opportunity here, and we are very glad that we got into this space early when we did, and started building the reputation that has allowed us to execute the way that we have.

Upal Rana: Okay. Great. That was helpful. Thank you.

Operator: Thank you. The next question comes from Analyst with Green Street Advisors. Please go ahead.

Analyst: Thank you, and good morning, everyone. In this new world of AI, how do you view your portfolio's durability against any secular changes caused by technological advancements? Do you differ between the retail side of the portfolio and the industrial side and maybe even that small office side that is still in the portfolio? Thanks.

John Moragne: Yeah. If there is anything, maybe on the office side—because of utilization, people are going to be reducing headcount or looking at different arrangements—but we think that there is a lot of resiliency built into our industries and our asset classes, and in the retail and restaurant category people are still going to want to go out to eat and shop. They are still going to be looking for those products to be delivered, for the food to be manufactured—all of the things that our real estate provides and supports. Those industries do not concern us. Office, I think there are broader secular trends, and AI is only going to potentially accelerate those.

Analyst: Thanks. Appreciate that. And then just one quick one on the disposition front. Just seeing if there is a pricing read-through here on the one asset you sold during the quarter—just noticed there is a mid-5s cap rate with a sub-10-year lease term, which is kind of interesting. So just any color there. Thanks.

John Moragne: Yeah. Great opportunistic sale for us. That was an unsolicited offer to sell. We will always look for places where we have got an asset valued in one place and somebody else thinks it is inside—so they are willing to pay more for it. If we can make that arbitrage work, we will. We are not looking at going around selling our best trophy assets. These are places where we have seen good opportunities for assets that we would put in the middle of the pack for us, but somebody else sees it as a gem. If that is the case, we are happy to sell it to them at a mid-5% cap.

Analyst: Got it. Thank you.

Operator: Thank you. The next question comes from John Kim with BMO Capital Markets. John, please go ahead.

John Kim: Thank you. This quarter, you had a 119% recapture rate. That is above what you did last quarter of 110%. Is that mainly driven by industrial leasing? And secondly, do you have visibility on what your current mark-to-market is with your portfolio just to see how recurring this could be going forward?

John Moragne: Yeah. Mostly driven by industrial. A lot of times, the retail assets that are going to roll are going to a fixed rent bump as the way they go through, but we have a little bit more ability to mark to market on the industrial side. We are not looking necessarily at the assets that have 10-plus years of term left on a mark-to-market basis—I mean, that is anyone's guess at this point, what is going to be rent in those periods of time. We do look at it, though, for the next two to four years. We have our releasing pretty much under control already for 2026.

We have a little bit of a heftier volume for 2027, but we started working on those last year. And so we have a view on a mark-to-market and then also looking out into 2028 and 2029. Generally speaking, without putting a number on it, we feel very good that, on an aggregate basis, we are in a good spot from a same-store growth standpoint for the assets that are going to release moving forward.

John Kim: But a 119%—is that something that could occur again, or is this sort of an aberration this quarter?

John Moragne: It depends. We have had good results. The last couple of years, we have looked at something like 107% to 108%. So 119% is a little bit higher than what we have seen in the last year or so. Happy to continue to push for those when we can get it; that is maybe a little bit more on the high watermark side.

John Kim: And on Project Triborough, it was a very thorough update, which is helpful. I think at your Investor Day, you talked about hyperscaler interest in acquiring that site from you and its premium. Given the process could be elongated and maybe it could end up getting pretty political, is that an option that is still on the table for you, or something that you are considering?

John Moragne: Yeah. Our conversations with hyperscalers have primarily been in the zone of leasing—so leasing the sites to them. But powered land sale and us exiting the opportunity still is on the table. There continues to be interest from all sorts of institutional buyers that would like to get access to it. So the hyperscaler conversation has been much more in the vein of leasing, and to the extent that we believe the right value-maximization opportunity is for us to sell, there are plenty of folks that are interested in the site.

John Kim: Great. Thank you.

Operator: The next question comes from Analyst with BTIG. Please go ahead.

Analyst: Hi. This is Zach Light on for Michael Gorman. Thanks for taking my question. Just building on the first question asked and going back to the Boston transaction in the quarter—it is a unique deal relative to typical acquisitions in the past. Given the implications and additional infrastructure spend and build-to-suit development component mentioned in the remarks, was this a broadly marketed process or a relationship-sourced transaction? And is this type of partial structured sale-leaseback with embedded development something that you are actively seeking to replicate, or more of an opportunistic one-off in the quarter?

John Moragne: Direct deal all the way. This was not broadly marketed. This was one that we partnered with Sanzone on to find a solution for them and for Charles River to make this work in an attractive way for us. These are the types of deals that we think we absolutely excel at because there are a lot of other folks that would look at something like this and just say no—and they would walk away because it would involve a little bit more work, and it is a little bit more outside of, as I said, the commodity net lease business that prevails in a lot of other places. So we absolutely would look for more opportunities like this.

We think we have built a good reputation as someone who can creatively structure deals that work for everybody but still provide a great way for us to grow our earnings and find ways to deploy capital to interesting places that can provide value in the future. This is not something where you can necessarily find opportunities like this just on the listings that are out there from brokers. These are relationship-based type deals, and these are the types of deals that we believe are going to come through our network, and we hope to be able to find more.

Because if this plays out the way that we have underwritten and the way that we believe, it is going to be a heck of a success for Broadstone Net Lease, Inc.

Analyst: That is great. Thanks. And then just a follow-up, switching over to the portfolio. We noticed industrial exposure continues to climb. As industrial concentration approaches that two-thirds range in the portfolio, how are you thinking about the appropriate ceiling for industrial exposure? And does the mix shift within industrial reflect a specific strategy, or is this simply the composition of available deal flow?

John Moragne: I will take the second part first. I think it is a little bit more about deal flow and some of the relationships that we have. Often, our partners will specialize in one particular type of thing versus another, and so you are just going to naturally see more of a particular industrial type than something else if you are working with the same developer or the same sponsor or seller. We saw that with food processing as we grew that over the last few years. We were working with sponsors that did a lot of work in food processing, so it naturally became a bigger percentage.

In terms of the mix, we have been 70-plus percent allocated toward industrial from an investment dollar standpoint since 2018–2019, so not really any difference in the overall strategy in the way that we are allocating capital and deploying it. I would expect over time that you should see our industrial exposure grow into that 65% to 75%. As we work our way down on office and the remaining buckets like clinical healthcare and things, you should also expect that retail and restaurants end up in that 25% to 35%. That would be the mix that I would expect in the near to medium term for Broadstone Net Lease, Inc. going forward.

Analyst: Okay. Great. Thanks for the time.

Operator: Thank you. We have no further questions, and so I will turn the call back over to John Moragne for closing remarks.

John Moragne: Great. Thanks, everybody, for the time today. We have enjoyed walking you through our strategy and what we have been working on. We are getting right into the heat of conference season starting next week and all the way through NAREIT in June, so we look forward to seeing many of you in person. Hope you all have a great rest of your day. Thank you.

Operator: Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.