Broadstone Net Lease Breaks Ground on Two Texas Build-to-Suit Projects

Insider Monkey··US·Read original
3▲0 ▼0Impact / 5
Summary · why it matters

Broadstone Net Lease secured land and broke ground on two off-market build-to-suit projects in Manor, Texas, for Hobby Lobby and Academy Sports, adding $23 million to its committed development pipeline. The two projects, each roughly 55,000 square feet, carry target stabilization dates of June 2027 and 15-year leases with annual rent escalations of 0.5% for Hobby Lobby and 0.4% for Academy Sports, with Hobby Lobby projected at a 7.1% cash capitalization rate and 7.4% straight-line yield and Academy Sports at a 7.1% cash cap rate and 7.3% straight-line yield. The Texas builds follow a $303 million joint venture for a 100-megawatt advanced technology facility in Colorado leased to a Fortune 20 investment-grade tenant for 15 years, structured for an 8.5% initial cash yield rising to 9.7% in year two and operational in March 2027. Broadstone reported second-quarter net income of $40.3 million, or $0.21 per diluted share, more than double the prior-year period, with same-store rental revenue up 2.2% year over year and 99.9% of base rents collected, and management raised the midpoint of full-year Adjusted Funds From Operations guidance to $1.56 per share. The company owes approximately $149.3 million in remaining build-to-suit commitments through the fourth quarter of 2026, carried $2.7 billion in total outstanding debt as of June 30 for a net debt-to-annualized adjusted EBITDAre ratio of 6.4 times, or 5.9 times pro forma, and has sold 8.2 million shares forward since the fourth quarter of 2025 at an average price of $19.97, raising approximately $163 million.

Impact on assets 3

Real Estate▲ · 2 stocks
Consumer Discretionary▲ · 1 stocks
Academy Sports Outdoors Inc
ASO
± MixedDemandrelevance

Academy Sports is the tenant for one of Broadstone's new build-to-suit projects, but the article gives no company-specific development for Academy itself.

Off-coverage companies 1

Hobby LobbyPrivate± Mixed
Demandrelevance

Hobby Lobby is the tenant for one of Broadstone's new build-to-suit projects, but the article gives no company-specific development for Hobby Lobby itself.

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