Executive Summary

Q3 results were stable operationally: revenue $108.4M, diluted EPS $0.19, FFO/share $0.37, and AFFO/share $0.35, with portfolio 99.0% leased and 99.1% rent collection .
UNFI Sarasota build-to-suit reached substantial completion with rent commencement in early September (15-year lease, 2.5% annual bumps, 7.2% initial cash cap rate; 8.6% straight-line yield), adding a high-quality, large industrial asset and elevating UNFI to a top tenant .
Full-year AFFO guidance of $1.41–$1.43 was reaffirmed; investment guidance range narrowed by trimming the high end ($400–$600M vs. $400–$700M) and cash G&A lowered to $31–$33M, reflecting discipline as healthcare dispositions wind down and vacancies carry costs in Q4 .
Strategic pivot continues: healthcare ABR exposure on track to be <10% by year-end (from 17.6% in 2023) after $339.0M YTD healthcare dispositions; industrial-focused build-to-suit pipeline was highlighted as a 2025–2026 growth driver, though one large prospective tenant later canceled (post-quarter) reducing remaining commitments to $246.5M as of Nov 18 .
Stock catalysts: visible embedded growth from committed development deliveries (notably UNFI and Sierra Nevada MROs), cleaner portfolio mix post-healthcare sales, and conservative leverage (Net Debt/Annualized Adjusted EBITDAre 5.0x; pro forma 4.9x) that supports capital flexibility .

What Went Well and What Went Wrong

What Went Well
- Executed on 2024 strategic priorities: “successful sale of the latest tranche of our clinical assets bringing our total healthcare exposure to less than 10% of our ABR” and “more than $400 million of high-quality build-to-suit developments under control” (CEO) .
- UNFI build-to-suit delivered ahead of schedule and below budget; rent commenced in early September at 7.2% initial cash cap, 2.5% escalators, 8.6% straight-line yield, under a 15-year lease; UNFI now a top tenant .
- Operating resilience: 99.0% leased, 99.1% rent collection; Q3 AFFO/share $0.35 with disciplined cash G&A, leverage at 5.0x (pro forma 4.9x) and $874.5M revolver capacity .
What Went Wrong
- AFFO/share dipped slightly YoY ($0.35 vs $0.36) and management cited incremental expenses from vacancies and credit costs as a limiter to raising FY guidance despite positive offsets (rent collections, UNFI online, lower G&A) .
- Incremental pockets of credit risk persist (consumer-centric tenants; home furnishings; remaining clinical healthcare) leading to cautious tone and some elevated Q4 operating expenses tied to current vacancies (bad debt reserve maintained) .
- Post-quarter, a large prospective build-to-suit was canceled by a tenant after leadership changes, reducing remaining development commitments from $418.8M to $246.5M as of Nov 18 (execution risk in pipeline) .

Financial Results

Core P&L and Per-Share Metrics (YoY and QoQ)

Metric	Q3 2023	Q2 2024	Q3 2024
Revenues ($USD Thousands)	$109,543	$105,907	$108,397
Net income incl. NCI ($USD Thousands)	$52,145	$35,937	$37,268
Diluted EPS ($)	$0.26	$0.19	$0.19
FFO ($USD Thousands)	$75,478	$73,725	$73,818
FFO per share ($)	$0.39	$0.37	$0.37
Core FFO ($USD Thousands)	$74,754	$73,001	$73,971
Core FFO per share ($)	$0.38	$0.37	$0.37
AFFO ($USD Thousands)	$69,958	$70,401	$70,185
AFFO per share ($)	$0.36	$0.36	$0.35

Notes: Revenue and EPS in Q3 were broadly stable QoQ; AFFO/share eased 1c QoQ and 1c YoY as vacancy-related expenses offset cost controls .

Portfolio Mix (ABR by Property Type, Q3 2024)

Property Type	ABR %	ABR ($000s)
Industrial (total)	57.8%	$229,680
Restaurant (total)	13.4%	$53,540
Retail (total)	12.5%	$49,696
Healthcare (total)	10.5%	$41,991
Office (total)	5.8%	$23,252
Total	100.0%	$398,159

KPIs and Balance Sheet (Trend)

KPI	Q3 2023	Q2 2024	Q3 2024
Occupancy (SF)	99.4%	99.3%	99.0%
Rent Collection	99.9%	99.0%	99.1%
WALT (years)	10.5	10.4	10.3
Weighted avg annual rent increases	2.0%	2.0%	2.0%
Net Debt / Annualized Adjusted EBITDAre	4.9x	5.1x	5.0x
Pro Forma Net Debt / Annualized Adjusted EBITDAre	4.9x	4.9x	4.9x
Revolver availability ($M)	—	$920.9	$874.5

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
AFFO per diluted share	FY 2024	$1.41–$1.43 (as of Q2 release)	$1.41–$1.43 (reaffirmed)	Maintained
Investments (real estate)	FY 2024	$400–$700M (raised low end at Q2)	$400–$600M	Lowered (high end)
Dispositions	FY 2024	$350–$450M	$350–$450M	Maintained
Total cash G&A	FY 2024	$31.5–$33.5M	$31–$33M	Lowered

Dividend: Q3 dividend declared at $0.29 per share/OP unit .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 and Q2)	Current Period (Q3)	Trend
Build-to-suit strategy and yields	Pipeline in development; mid-7% initial cash cap, 2–4% bumps, straight-line yields >9%; UNFI on track; pursuing $307M across 7 projects; exploring additional ~$400M	UNFI rent commenced; $405M committed developments (mid-to-high 7% cash yields, >9% straight-line); Sierra Nevada MROs funded; visibility to ~$33M ABR in late-2025/1H26	Accelerating execution (with subsequent post-quarter reduction)
Healthcare simplification	Sold 37 assets at ~7.9% cap; plan to reduce to ~11% ABR; remaining one-offs to extend into 2025 for optimal value	Crossed below 10% total healthcare ABR post-October tranche; $339.0M YTD healthcare dispositions; focus shifts from portfolio sales to traditional AM for remainder	Mostly completed; remaining tail work
Acquisition market & cap rates	Selective; regular-way competitive; mid-market industrial crowded; targeting 7%+; prefer direct-sourced and BTS	Still “solidly in the 7s”; regular-way volumes not compelling; capital directed toward BTS where economics superior	Steady selectivity
Credit monitoring	Watch list includes Red Lobster, at home; rent coverage stable; cautious on consumer discretionary	Incremental pockets of risk persist; modest Q4 expense elevation tied to vacancies; bad debt reserve steady	Stable-to-cautious
Leverage & liquidity	Net Debt/Adj. EBITDAre ~4.8–5.1x; strong revolver availability; $460M forward SOFR swaps	5.0x (pro forma 4.9x); ~$874.5M revolver availability; forward equity ~$39M; dividend well covered	Stable

Management Commentary

CEO strategic message: “We came into 2024 with two primary objectives: execute on our healthcare portfolio simplification strategy and build a strong pipeline focused on our differentiated core building blocks of growth… I am incredibly proud of our team for accomplishing both.”
On UNFI and build-to-suit: “This brand-new… 1 million square foot… is now operational and contributing to our earnings base with an initial cash yield of 7.2%… and 2.5% annual rent escalations that drive a straight-line yield of 8.6%.”
BTS pipeline durability: “We have already secured approximately $33 million of incremental ABR that will come online in Q4 2025 and the first half of 2026… we’re able to maintain our leverage ratio comfortably below 6x.”
CFO clarity on drivers: “AFFO of $70 million or $0.35 per share… driven by lower lease revenues… and incremental expenses associated with vacant assets… partially offset by lower cash G&A and interest expenses.”

Q&A Highlights

Why not raise guidance? Management cited known Q4 vacancy carrying costs and a few tenant credit events offsetting positive drivers (collections, UNFI commencement, lower G&A), preferring to hold the range .
Acquisition posture: Regular-way deal flow remains less compelling; BNL stays “solidly in the 7s,” prioritizing direct-sourced/BTS opportunities with superior risk-adjusted returns .
BTS concentration risk: Hard cap of 5% ABR per tenant; willing to let top-10/20 concentration move modestly higher, but maintain tenant cap discipline .
Credit watch list: Continued focus on consumer-centric tenants; pleased Red Lobster resolution kept all 18 master-lease stores open with an 8.25% rent reduction; monitoring “at home” (≈1% ABR) .
Funding and leverage: Pro forma leverage ~4.9x and ~~$870M+ revolver availability support committed BTS fundings without near-term equity needs; opportunistic forward equity (~~$39M net) executed .

Estimates Context

We attempted to retrieve S&P Global consensus for Q3 2024 (Revenue, Primary EPS, EBITDA) and recent quarters; however, estimates were unavailable at time of analysis due to API request limits. As a result, we cannot provide a quantitative beat/miss vs. S&P Global consensus for Q3. We will update upon access restoration.
Management did not frame results versus external consensus in the release; focus remained on strategic execution and guidance maintenance .

Key Takeaways for Investors

Execution unlocks 2025–2026 growth visibility: UNFI is online; Sierra Nevada MROs underway; management points to ~$33M incremental ABR from committed developments across late-2025/1H26, with leverage contained <6x during funding .
Portfolio de-risking largely complete: Healthcare ABR <10% by year-end, with remaining assets handled via targeted asset management to preserve value; industrial ABR now 57.8% .
Near-term earnings cadence: FY24 AFFO guide held at $1.41–$1.43 amid Q4 vacancy/credit cost drag; expect cleaner baseline into 2025 as vacancies resolve and development rent ramps .
Capital flexibility intact: 5.0x leverage (pro forma 4.9x), ~~$874.5M of revolver capacity, forward equity (~~$39M) available; dividend ($0.29) remains well covered .
Risk monitor: Consumer-exposed tenants and residual clinical healthcare assets remain focal points; management’s diversified tenant/industry mix and early re-leasing approach help mitigate impact .
Post-quarter pipeline update: One large BTS prospect canceled, trimming remaining commitments to $246.5M; management remains “steadfast” in scaling BTS while maintaining appetite for accretive regular-way deals .
Trading implications: Narrative centers on embedded NOI ramp from BTS deliveries, portfolio quality/tenant diversification, and disciplined capital, versus watch-list credits/vacancy costs and execution on the slimmer (but active) BTS pipeline .

Citations:

Q3 2024 8-K/Press Release and Supplemental:
Q3 2024 press release version:
Q3 2024 earnings call transcript:
Q2 2024 press release and call:
Q1 2024 call:
Other relevant press releases: Q3 earnings schedule ; Nov 18 BTS pipeline update .

Broadstone Net Lease, Inc. (BNL)·Q3 2024 Earnings Summary