Broadstone Net Lease, Inc. (NYSE:BNL) Q3 2023 Earnings Call Transcript

Just capital behind them is no longer there but they take time to sort of come through the finish line.

Unidentified Analyst: Makes sense. Second one is your on your cap structures. I hear you said you’re not planning to use ATM programs in the like near future but as you mentioned as well, the cap rates are continuing to go up not only from acquisition front but also from disposition front. Just curious: If cap rates continue to go up, like how do you measure, whether you want to rather like sell assets to recycle to fund your acquisitions; or you would use a further like ATM program? If you can talk about your approach there it would be great. Thank you.

Kevin Fennell: Yes. I think the heart of your question is on source of funding. I’d say we’ve got a pretty big runway in front of us with where our balance sheet sits today. And I’d set a baseline expectation on considering leverage our disposition opportunities as we think about where we can redeploy that money. As John has mentioned, I think quarter after quarter after quarter, there’s not a world where we’re thinking about issuing equity at these levels, especially where the transaction environment currently sits from an opportunity set.

Unidentified Analyst: Yes. If I can ask another one just for the pipeline front: Like do you think you will be focusing more on the industrial like over other sectors?

Ryan Albano: Yes. I’d say – when I look at our pipeline today and even look further up from what we have under control, I’d say it’s weighted towards industrial and then with a second weighting towards retail.

Unidentified Analyst: Okay. Very helpful. Thank you very much. That’s all my questions.

Operator: We have a follow-up question from Ki Bin Kim with Truist. Your line is now open.

Ki Bin Kim: Thanks. Just a quick one on the large development project you have for UNFI [ph]. Can you just remind us how you’re treating the costs to fund that? Are you capitalizing costs? And when do you start booking that income?

John Moragne: Ki Bin, everything is – associated with that development is hung up on the balance sheet so you’ll see the asset grow both from the dollars we fund but also the interest associated with it. And then when it comes online in October, that’s when it will start hitting the P&L on both fronts.

Ki Bin Kim: Okay. Thank you.

Operator: There are currently no further questions registered, so I’ll pass the conference back to the management team for any closing remarks.

John Moragne: Thanks everybody for joining us today. Appreciate all the questions and looking forward to seeing many of you in Los Angeles at Nareit in a couple of weeks. Have a great rest of your day. Bye all.

Operator: That concludes today’s conference call. Thank you for your participation. You may now disconnect your line.