Broadstone Net Lease has revealed the acquisition of a portfolio of 23 industrial and office/flex assets that are fully leased and include 6.9 million rentable square feet of operational space for an aggregate purchase price of approximately $735.7 million, excluding capitalized acquisition expenses.
According to a prepared statement, the portfolio has a weighted average remaining lease term of approximately 11.5 years and weighted average annual rent increases of approximately 2.2%.
The portfolio is well diversified with 19 different tenants, properties located in 14 states and British Columbia, Canada, and comprises a mix of warehouse, distribution, manufacturing, cold storage, and office/flex assets. On a pro forma basis post-transaction, BNL will own a diversified portfolio of 668 individual net leased commercial properties comprising approximately 27.2 million rentable square feet of operational space with no single tenant accounting for more than 2.8% of contractual rental revenue over the next 12 months. In addition, industrial assets will now comprise approximately 41% of our portfolio on an NTM rent basis, with approximately 27% and 18% of retail and healthcare assets, respectively, making up the majority of the remainder of the REIT. Upon closing of this acquisition, we have now closed on transactions with an aggregate value of approximately $983 million year-to-date, excluding capitalized acquisition expenses, and have a total investment in rental property of more than $4.4 billion.
“We are excited to announce this transformational transaction for Broadstone Net Lease and its shareholders,” said Chris Czarnecki, BNL’s Chief Executive Officer. “This portfolio benefits from attractive real estate and tenant fundamentals and represents a diverse and accretive addition to our net lease real estate portfolio. Although this transaction results in a short-term increase in leverage, consistent with our growth priorities and commitment to maintaining our investment grade credit rating, we remain highly focused on continuing to actively manage our leverage profile and overall liquidity position.”
The acquisition of the portfolio was funded through a combination of proceeds from our ongoing private offering of shares of our common stock, drawing the remaining $150 million commitment available under BNL’s $450 million seven-year unsecured term loan that matures in February 2026, $300 million from a new term loan, and the balance funded from proceeds from a senior unsecured revolving credit facility.
According to the firm, they will begin working to reduce BNL’s leverage profile in the near term using a combination of proceeds from its ongoing private offering of shares of our common stock and increasing disposition activity.