Broadstone Net Lease, Inc. 10-Q

Item 1. Financial Statements Broadstone Net Lease, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except per share amounts) September 30, 2025 December 31, 2024 Assets Accounted for using the operating method: Land $ 778,177 $ 778,826 Land improvements 359,210 357,142 Buildings and improvements 3,954,112 3,815,521 Equipment 16,070 15,843 Total accounted for using the operating method 5,107,569 4,967,332 Less accumulated depreciation ( 745,326 ) ( 672,478 ) Accounted for using the operating method, net 4,362,243 4,294,854 Accounted for using the direct financing method 25,673 26,154 Accounted for using the sales-type method 14,407 571 Property under development 179,172 18,784 Investment in rental property, net 4,581,495 4,340,363 Cash and cash equivalents 81,966 14,845 Accrued rental income 174,867 162,717 Tenant and other receivables, net 3,573 3,281 Prepaid expenses and other assets 59,866 41,584 Interest rate swap, assets 19,590 46,220 Goodwill 339,769 339,769 Intangible lease assets, net 258,145 267,638 Total assets $ 5,519,271 $ 5,216,417 Liabilities and equity Unsecured revolving credit facility $ 95,824 $ 93,014 Mortgages, net 57,168 76,846 Unsecured term loans, net 994,550 897,201 Senior unsecured notes, net 1,190,315 846,064 Interest rate swap, liabilities 1,994 — Accounts payable and other liabilities 55,662 48,983 Dividends payable 58,665 58,317 Accrued interest payable 9,488 5,837 Intangible lease liabilities, net 43,096 48,731 Total liabilities 2,506,762 2,074,993 Commitments and contingencies (Note 16) Equity Broadstone Net Lease, Inc. equity: Preferred stock, $ 0.001 par value; 20,000 shares authorized, no shares issued or outstanding — — Common stock, $ 0.00025 par value; 500,000 shares authorized, 189,216 and 188,626 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 47 47 Additional paid-in capital 3,463,010 3,450,584 Cumulative distributions in excess of retained earnings ( 597,571 ) ( 496,543 ) Accumulated other comprehensive income 19,172 49,657 Total Broadstone Net Lease, Inc. equity 2,884,658 3,003,745 Non-controlling interests 127,851 137,679 Total equity 3,012,509 3,141,424 Total liabilities and equity $ 5,519,271 $ 5,216,417 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Broadstone Net Lease, Inc. and Subsidiaries Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (in thousands, except per share amounts) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Revenues Lease revenues, net $ 114,167 $ 108,397 $ 335,843 $ 319,670 Operating expenses Depreciation and amortization 40,246 38,016 122,318 113,192 Property and operating expense 6,198 7,014 16,688 17,976 General and administrative 9,974 8,722 29,216 28,058 Provision for impairment of investment in rental properties 6,999 1,059 35,067 31,311 Total operating expenses 63,417 54,811 203,289 190,537 Other income (expenses) Interest income 182 70 403 952 Interest expense ( 28,230 ) ( 18,178 ) ( 69,416 ) ( 54,512 ) Gain on sale of real estate 3,259 2,441 4,230 64,956 Income taxes ( 208 ) 291 ( 763 ) ( 649 ) Other income (expenses) 1,312 ( 942 ) ( 2,620 ) 1,502 Net income 27,065 37,268 64,388 141,382 Net income attributable to non-controlling interests ( 599 ) ( 1,660 ) ( 1,019 ) ( 5,331 ) Net income attributable to Broadstone Net Lease, Inc. 26,466 35,608 63,369 136,051 Weighted average number of common shares outstanding Basic 188,099 187,496 188,002 187,408 Diluted 197,632 196,932 197,476 196,799 Net earnings per share attributable to common stockholders Basic and Diluted $ 0.14 $ 0.19 $ 0.33 $ 0.72 Comprehensive income (loss) Net income $ 27,065 $ 37,268 $ 64,388 $ 141,382 Other comprehensive income (loss) Change in fair value of interest rate swaps ( 4,981 ) ( 41,682 ) ( 35,336 ) ( 31,334 ) Realized loss (gain) on interest rate swaps 6,103 ( 5 ) 6,091 216 Comprehensive income (loss) 28,187 ( 4,419 ) 35,143 110,264 Comprehensive income (loss) attributable to non-controlling interests ( 646 ) 196 232 ( 3,950 ) Comprehensive income (loss) attributable to Broadstone Net Lease, Inc. $ 27,541 $ ( 4,223 ) $ 35,375 $ 106,314 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Broadstone Net Lease, Inc. and Subsidiaries Condensed Consolidated Statements of Equity (Unaudited) (in thousands, except per share amounts) Common Stock Additional Paid-in Capital Cumulative Distributions in Excess of Retained Earnings Accumulated Other Comprehensive Income Non- controlling Interests Total Equity Balance, January 1, 2025 $ 47 $ 3,450,584 $ ( 496,543 ) $ 49,657 $ 137,679 $ 3,141,424 Net income — — 16,743 — 750 17,493 Issuance of 292 shares of common stock under equity incentive plan — 104 — — — 104 Offering costs, discounts, and commissions — ( 136 ) — — — ( 136 ) Stock-based compensation, net of three shares of restricted stock forfeited — 2,147 — — — 2,147 Retirement of 86 shares of common stock under equity incentive plan — ( 1,446 ) — — — ( 1,446 ) Conversion of 244 OP Units to 244 shares of common stock — 3,882 — — ( 3,882 ) — Distributions declared ($ 0.290 per share and OP Unit) — — ( 56,274 ) — ( 2,600 ) ( 58,874 ) Change in fair value of interest rate swap agreements — — — ( 19,039 ) ( 853 ) ( 19,892 ) Realized gain on interest rate swap agreements — — — ( 6 ) — ( 6 ) Adjustment to non-controlling interests — 906 — ( 892 ) ( 14 ) — Balance, March 31, 2025 $ 47 $ 3,456,041 $ ( 536,074 ) $ 29,720 $ 131,080 $ 3,080,814 Net income — — 20,160 — ( 330 ) 19,830 Issuance of 61 shares of common stock under equity incentive plan — — — — — — Contributions from non-controlling interests — — — — 1,173 1,173 Offering costs, discounts, and commissions — ( 132 ) — — — ( 132 ) Stock-based compensation, net of four shares of restricted stock forfeited — 2,471 — — — 2,471 Distributions declared ($ 0.290 per share and OP Unit) — — ( 55,388 ) — ( 2,478 ) ( 57,866 ) Change in fair value of interest rate swap agreements — — — ( 10,018 ) ( 445 ) ( 10,463 ) Realized gain on interest rate swap agreements — — — ( 6 ) — ( 6 ) Adjustment to non-controlling interests — 1,559 — ( 1,687 ) 128 — Balance, June 30, 2025 $ 47 $ 3,459,939 $ ( 571,302 ) $ 18,009 $ 129,128 $ 3,035,821 Net income — — 26,466 — 599 27,065 Issuance of one shares of common stock under equity incentive plan — — — — — — Contributions from non-controlling interests — — — — 1,581 1,581 Offering costs, discounts, and commissions — ( 175 ) — — — ( 175 ) Stock-based compensation, net of one shares of restricted stock forfeited — 2,488 — — — 2,488 Conversion of 86 membership units to 86 shares of common stock — 1,329 — — ( 1,329 ) — Distributions declared ($ 0.290 per share and OP Unit) — — ( 52,735 ) — ( 2,660 ) ( 55,395 ) Change in fair value of interest rate swap agreements — — — ( 4,770 ) ( 211 ) ( 4,981 ) Realized loss on interest rate swap agreements — — — 5,845 258 6,103 Adjustment to non-controlling interests — ( 571 ) — 88 485 2 Balance, September 30, 2025 $ 47 $ 3,463,010 $ ( 597,571 ) $ 19,172 $ 127,851 $ 3,012,509 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Broadstone Net Lease, Inc. and Subsidiaries Condensed Consolidated Statements of Equity - Continued (Unaudited) (in thousands, except per share amounts) Common Stock Additional Paid-in Capital Cumulative Distributions in Excess of Retained Earnings Accumulated Other Comprehensive Income Non- controlling Interests Total Equity Balance, January 1, 2024 $ 47 $ 3,440,639 $ ( 440,731 ) $ 49,286 $ 145,100 $ 3,194,341 Net income — — 65,114 — 3,063 68,177 Issuance of 822 shares of common stock under equity incentive plan — 116 — — — 116 Offering costs, discounts, and commissions — ( 36 ) — — — ( 36 ) Stock-based compensation, net of 25 shares of restricted stock forfeited — 1,475 — — — 1,475 Retirement of 71 shares of common stock under equity incentive plan — ( 1,040 ) — — — ( 1,040 ) Conversion of 95 OP Units to 95 shares of common stock — 1,536 — — ( 1,536 ) — Distributions declared ($ 0.285 per share and OP Unit) — — ( 54,552 ) — ( 2,740 ) ( 57,292 ) Change in fair value of interest rate swap agreements — — — 11,274 530 11,804 Realized loss on interest rate swap agreements — — — 152 7 159 Adjustment to non-controlling interests — 4,220 — ( 3,878 ) ( 342 ) — Balance, March 31, 2024 $ 47 $ 3,446,910 $ ( 430,169 ) $ 56,834 $ 144,082 $ 3,217,704 Net income — — 35,329 — 608 35,937 Issuance of 55 shares of common stock under equity incentive plan — — — — — — Offering costs, discounts, and commissions — ( 200 ) — — — ( 200 ) Contributions from non-controlling interests — — — — 1,000 1,000 Stock-based compensation, net of five shares of restricted stock forfeited — 2,073 — — — 2,073 Conversion of 32 OP Units to 32 shares of common stock — 532 — — ( 532 ) — Distributions declared ($ 0.290 per share and OP Unit) — — ( 55,053 ) — ( 2,657 ) ( 57,710 ) Change in fair value of interest rate swap agreements — — — ( 1,391 ) ( 65 ) ( 1,456 ) Realized loss on interest rate swap agreements — — — 59 3 62 Adjustment to non-controlling interests — ( 5,050 ) — 4,881 169 — Balance, June 30, 2024 47 3,444,265 ( 449,893 ) 60,383 142,608 3,197,410 Net income — — 35,608 — 1,660 37,268 Issuance of one shares of common stock under equity incentive plan — — — — — — Offering costs, discounts, and commissions — ( 107 ) — — — ( 107 ) Stock-based compensation, net of 57 shares of restricted stock forfeited — 1,829 — — — 1,829 Conversion of 46 OP Units to 46 shares of common stock — 744 — — ( 744 ) — Distributions declared ($ 0.290 per share and OP Unit) — — ( 53,637 ) — ( 2,717 ) ( 56,354 ) Change in fair value of interest rate swap agreements — — — ( 39,826 ) ( 1,856 ) ( 41,682 ) Realized gain on interest rate swap agreements — — — ( 5 ) ( 5 ) Adjustment to non-controlling interests — 3,385 — ( 3,719 ) 334 — Balance, September 30, 2024 $ 47 $ 3,450,116 $ ( 467,922 ) $ 16,833 $ 139,285 $ 3,138,359 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Broadstone Net Lease, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) For the Nine Months Ended September 30, 2025 2024 Operating activities Net income $ 64,388 $ 141,382 Adjustments to reconcile net income including non-controlling interests to net cash provided by operating activities: Depreciation and amortization including intangibles associated with investment in rental property 118,865 109,770 Provision for impairment of investment in rental properties 35,067 31,311 Amortization of debt issuance costs and original issuance discount charged to interest expense 3,923 2,949 Stock-based compensation expense 7,106 5,377 Settlement of interest rate swaps ( 6,712 ) — Straight-line rent, direct financing and sales-type lease adjustments ( 13,465 ) ( 12,784 ) Gain on sale of real estate ( 4,230 ) ( 64,956 ) Other non-cash items 7,902 ( 2,936 ) Changes in assets and liabilities: Tenant and other receivables ( 291 ) ( 585 ) Prepaid expenses and other assets ( 2,579 ) 66 Accounts payable and other liabilities 1,303 ( 1,192 ) Accrued interest payable 3,652 3,940 Net cash provided by operating activities 214,929 212,342 Investing activities Acquisition of rental property ( 255,784 ) ( 288,928 ) Investment in property under development including capitalized interest of $ 2,948 and $ 3,812 in 2025 and 2024, respectively ( 165,517 ) ( 89,712 ) Capital expenditures and improvements ( 23,122 ) ( 10,352 ) Proceeds from disposition of rental property, net 58,557 302,001 Change in deposits on investments in rental property ( 4,781 ) ( 50 ) Net cash used in investing activities ( 390,647 ) ( 87,041 ) Financing activities Offering costs, discounts, and commissions ( 215 ) ( 493 ) Contributions from non-controlling interests 1,730 1,000 Proceeds from unsecured term loans and senior unsecured notes 844,841 — Principal payments on mortgages and unsecured term loans ( 419,707 ) ( 1,681 ) Borrowings on unsecured revolving credit facility 514,300 175,000 Repayments on unsecured revolving credit facility ( 513,800 ) ( 138,500 ) Cash distributions paid to stockholders ( 163,852 ) ( 161,922 ) Cash distributions paid to non-controlling interests ( 7,832 ) ( 8,119 ) Debt acquisition costs paid ( 12,420 ) — Net cash provided by (used in) financing activities 243,045 ( 134,715 ) Net increase (decrease) in cash and cash equivalents and restricted cash 67,327 ( 9,414 ) Cash and cash equivalents and restricted cash at beginning of period 15,993 20,632 Cash and cash equivalents and restricted cash at end of period $ 83,320 $ 11,218 Reconciliation of cash and cash equivalents and restricted cash Cash and cash equivalents at beginning of period $ 14,845 $ 19,494 Restricted cash at beginning of period 1,148 1,138 Cash and cash equivalents and restricted cash at beginning of period $ 15,993 $ 20,632 Cash and cash equivalents at end of period $ 81,966 $ 8,999 Restricted cash at end of period 1,354 2,219 Cash and cash equivalents and restricted cash at end of period $ 83,320 $ 11,218 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Broadstone Net Lease, Inc. and Subsidiaries Notes to the Condensed Consolidated Financial Statements (Unaudited) 1. Business Description Broadstone Net Lease, Inc. (the “Corporation”) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (“REIT”) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the “OP”), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as “OP Units” and are recorded as non-controlling interests in the Condensed Consolidated Financial Statements. As the Corporation conducts substantially all of its operations through the OP, it is structured as an umbrella partnership real estate investment trust (“UPREIT”). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol “BNL.” The Corporation, the OP, and its consolidated subsidiaries are collectively referred to as the “Company.” The Company is an industrial-focused, diversified net lease REIT that focuses on investing in income-producing, single-tenant net leased commercial properties, primarily in the United States. The Company leases primarily industrial and retail commercial properties under long-term lease agreements. At September 30, 2025, the Company owned a diversified portfolio of 759 individual commercial properties with 752 properties located in 44 U.S. states and seven properties located in four Canadian provinces. The following table summarizes the outstanding equity and economic ownership interest of the Company: (in thousands) September 30, 2025 December 31, 2024 Shares of Common Stock OP Units Total Diluted Shares Shares of Common Stock OP Units Total Diluted Shares Ownership interest 189,216 8,315 197,531 188,626 8,646 197,272 Percent ownership of OP 95.8 % 4.2 % 100.0 % 95.6 % 4.4 % 100.0 % Refer to Note 14 for further discussion regarding the calculation of weighted average shares outstanding. 2. Summary of Significant Accounting Policies Interim Information The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting ) and Article 10 of the Securities and Exchange Commission’s (“SEC”) Regulation S-X. Accordingly, the Company has omitted certain footnote disclosures which would substantially duplicate those contained within the audited consolidated financial statements for the year ended December 31, 2024, included in the Company’s 2024 Annual Report on Form 10-K, filed with the SEC on February 20, 2025. Therefore, the readers of this quarterly report should refer to those audited consolidated financial statements, specifically Note 2, Summary of Significant Accounting Policies , for further discussion of significant accounting policies and estimates. The Company believes all adjustments necessary for a fair presentation have been included in these interim Condensed Consolidated Financial Statements (which include only normal recurring adjustments). Basis of Accounting The Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. Principles of Consolidation The Condensed Consolidated Financial Statements include the accounts and operations of the Company. All intercompany balances and transactions have been eliminated in consolidation. 6 When the Company obtains an economic interest in an entity, the entity is evaluated to determine if it should be deemed a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary and is therefore required to consolidate the entity. The accounting guidance for consolidation of VIEs is applied to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Certain decision-making rights within a loan or joint-venture agreement may cause us to consider an entity a VIE. The contractual arrangements in a partnership agreement or other related contracts are reviewed to determine whether the entity is a VIE, and if the Company has variable interests in the VIE. The Company’s variable interests are then compared to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE. A primary beneficiary: (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company reassesses the initial evaluation of whether an entity is a VIE when certain events occur, and reassesses the primary beneficiary determination of a VIE on an ongoing basis based on current facts and circumstances. To the extent the Company has a variable interest in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model. The Corporation has complete responsibility for the day-to-day management of, authority to make decisions for, and control of the OP. Based on consolidation guidance, the Corporation has concluded that the OP is a VIE as the members in the OP do not possess kick-out rights or substantive participating rights. Accordingly, the Corporation consolidates its interest in the OP. However, because the Corporation holds the majority voting interest in the OP and certain other conditions are met, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs. From time to time, the Company acquires properties using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a “reverse 1031 exchange”) and, as such, the properties are in the possession of an Exchange Accommodation Titleholder (“EAT”) until the reverse 1031 exchange is completed. EATs are classified as VIEs as they are “thinly capitalized” entities. The Company consolidates the EAT because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the EAT's economic performance and can collapse the reverse 1031 exchange structure at its discretion. The assets of the EAT primarily consist of leased property (net real estate investment in rental property and lease intangibles). The portions of a consolidated entity not owned by the Company are presented as non-controlling interests as of and during the periods presented. During the three months ended September 30, 2025, the Company invested $ 17.8 million and $ 6.0 million in two consolidated VIEs in exchange for 95.0 % and 85.1 % ownership interests, respectively. During the nine months ended September 30, 2025, the Company invested $ 40.1 million in two consolidated VIEs in exchange for 95.0 % ownership interests and $ 6.0 million in exchange for 85.1 % ownership interest in a consolidated VIE. During the nine months ended September 30, 2024, the Company invested $ 52.2 million in exchange for 98.1 % ownership interest in a consolidated VIE. The Company is the primary beneficiary of these four VIEs as it: (i) has the power to direct the activities that significantly impact the economic performance of the VIE, and (ii) has the obligation to absorb losses and the right to receive benefits of the VIE, and therefore consolidates the VIE. 7 The following table presents a summary of selected financial data of the consolidated VIEs included in the Condensed Consolidated Balance Sheets: (in thousands) September 30, 2025 December 31, 2024 Assets Accounted for using the operating method: Land $ 7,644 $ 7,644 Land improvements 2,707 2,578 Buildings and improvements 40,615 39,899 Total accounted for using the operating method 50,966 50,121 Less accumulated depreciation ( 1,803 ) ( 821 ) Accounted for using the operating method, net 49,163 49,300 Property under development 45,318 — Investment in rental property, net 94,481 49,300 Intangible lease assets, net 2,340 3,243 Other assets 10,563 3,248 Total assets $ 107,384 $ 55,791 Liabilities Intangible lease liabilities, net $ ( 446 ) $ 512 Other liabilities ( 894 ) 467 Total liabilities $ ( 1,340 ) $ 979 Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Accordingly, actual results may differ from those estimates. Investment in Property Under Development Land acquired for development and construction and improvement costs incurred in connection with the development of new properties are capitalized and recorded as Property under development in the accompanying Condensed Consolidated Balance Sheets until construction has been completed. Such capitalized costs include all direct and indirect costs related to planning, development, and construction, including interest, real estate taxes, and other miscellaneous costs incurred during the construction period. Once substantially complete, the property under development is placed in service and depreciation commences. The following tables summarize the Company’s investments in property under development: (in thousands) September 30, 2025 December 31, 2024 Development, construction and improvement costs $ 176,199 $ 18,725 Capitalized interest 2,973 59 Property under development $ 179,172 $ 18,784 (in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Investment in properties under development, excluding capitalized costs $ 60,536 $ 18,450 $ 159,924 $ 85,900 Capital expenditures funded after substantial completion — 6,229 11,576 6,229 8 Long-lived Asset Impairment The Company reviews long-lived assets to be held and used for possible impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If, and when, such events or changes in circumstances are present, an impairment exists to the extent the carrying value of the long-lived asset or asset group exceeds the sum of the undiscounted cash flows expected to result from the use of the long-lived asset or asset group and its eventual disposition. Such cash flows include expected future operating income, as adjusted for trends and prospects, as well as the effects of demand, competition, and other factors. An impairment loss is measured as the amount by which the carrying amount of the long-lived asset or asset group exceeds its fair value. Significant judgment is made to determine if and when impairment should be taken. The Company’s assessment of impairment during the nine months ended September 30, 2025 and 2024, was based on the most current information available to the Company. Certain of the Company’s properties may have fair values less than their carrying amounts. However, based on the Company’s plans with respect to each of those properties, the Company believes that their carrying amounts are recoverable and therefore, no impairment charges were recognized other than those described below. If the operating conditions mentioned above deteriorate or if the Company’s expected holding period for assets changes, subsequent tests for impairment could result in additional impairment charges in the future. Inputs used in establishing fair value for impaired real estate assets generally fall within Level 3 of the fair value hierarchy, which are characterized as requiring significant judgment as little or no current market activity may be available for validation. The main indicator used to establish the classification of the inputs is current market conditions, as derived through the use of published commercial real estate market information and information obtained from brokers and other third party sources. The Company determines the valuation of impaired assets using generally accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations, and bona fide purchase offers received from third parties. Management may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate. The following table summarizes the Company’s impairment charges, resulting primarily from changes in the Company’s long-term hold strategy with respect to the individual properties: (in thousands, except number of properties) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Number of properties 7 3 18 17 Impairment charge $ 6,999 $ 1,059 $ 35,067 $ 31,311 During the three and nine months ended September 30, 2025, the Company recognized impairment of $ 7.0 million and $ 35.1 million, respectively, resulting from changes in the Company’s long-term hold strategy with respect to the individual properties. The impairments for the nine months ended September 30, 2025 were based on actual and expected sales prices of individual properties and primarily includes a $ 14.6 million impairment charge on two healthcare properties. During the three and nine months ended September 30, 2024, the Company recognized impairment of $ 1.1 million and $ 31.3 million, respectively. The impairments for the nine months ended September 30, 2024, primarily includes an $ 18.1 million impairment charge on two healthcare properties, which was based on expected sales prices of the properties, and an $ 11.2 million impairment charge on 11 healthcare properties sold as part of a portfolio with a gain of $ 59.1 million, excluding any impairment, which was based on actual sales prices of the individual properties. Restricted Cash Restricted cash generally includes escrow funds the Company maintains pursuant to the terms of certain mortgages, lease agreements, and undistributed proceeds from the sale of properties under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”), and is reported within Prepaid expenses and other assets in the Condensed Consolidated Balance Sheets. Restricted cash consisted of the following: (in thousands) September 30, 2025 December 31, 2024 Escrow funds and other $ 1,354 $ 1,148 9 Rent Received in Advance Rent received in advance represents tenant rent payments received prior to the contractual due date, and is included in Accounts payable and other liabilities in the Condensed Consolidated Balance Sheets. Rent received in advance consisted of the following: (in thousands) September 30, 2025 December 31, 2024 Rent received in advance $ 18,615 $ 16,616 Segment Reporting The Company currently operates in a single reportable segment, which includes the acquisition, leasing, and ownership of net leased properties. The Company’s chief operating decision maker (“CODM”) is the Company’s senior leadership team, which includes, the Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and Treasurer, and the Company’s Senior Vice Presidents. The CODM assesses, measures, and reviews the operating and financial results at the consolidated level for the entire portfolio based on consolidated revenues, expenses, and net income as reported on the Condensed Consolidated Statements of Income and Comprehensive Income. The Company does not evaluate the results of operations based on geography, size, or property type. Fair Value Measurements Recurring Fair Value Measurements The balances of financial instruments measured at fair value on a recurring basis are as follows (see Note 9): (in thousands) September 30, 2025 Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 19,590 $ — $ 19,590 $ — Interest rate swap, liabilities ( 1,994 ) — ( 1,994 ) — December 31, 2024 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 46,220 $ — $ 46,220 $ — Long-term Debt – The fair value of the Company’s debt was estimated using Level 1, Level 2, and Level 3 inputs based on secondary market trades of the Company’s 2031 Senior Unsecured Public Notes (see Note 7), recent comparable financing transactions, recent market risk premiums for loans of comparable quality, Secured Overnight Financing Rate (“SOFR”), Canadian Overnight Repo Rate Average (“CORRA”), U.S. Treasury obligation interest rates, and discounted estimated future cash payments to be made on such debt. The discount rates estimated reflect the Company’s judgment as to the approximate current lending rates for loans or groups of loans with similar maturities and assumes that the debt is outstanding through maturity. Market information, as available, or present value techniques were utilized to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist on specific loans, it is unlikely that the estimated fair value of any such debt could be realized by immediate settlement of the obligation. The following table summarizes the carrying amount reported in the Condensed Consolidated Balance Sheets and the Company’s estimate of the fair value of the unsecured revolving credit facility, mortgages, unsecured term loans, and senior unsecured notes which reflects the fair value of interest rate swaps: (in thousands) September 30, 2025 December 31, 2024 Carrying amount $ 2,353,029 $ 1,919,927 Fair value 2,276,230 1,794,821 Non-recurring Fair Value Measurements The Company’s non-recurring fair value measurements at September 30, 2025 and December 31, 2024 consisted of the fair value of impaired real estate assets that were determined using Level 3 inputs. 10 Right-of-Use Assets and Lease Liabilities The Company is a lessee under non-cancelable operating and finance leases associated with its corporate headquarters and other office spaces as well as with leases of land (“ground leases”). The Company records right-of-use assets and lease liabilities associated with these leases. The lease liability is equal to the net present value of the future payments to be made under the lease, discounted using estimates based on observable market factors. The right-of-use asset is generally equal to the lease liability plus initial direct costs associated with the leases. The Company includes in the recognition of the right-of-use asset and lease liability those renewal periods that are reasonably certain to be exercised, based on the facts and circumstances that exist at lease inception. Amounts associated with percentage rent provisions are considered variable lease costs and are not included in the initial measurement of the right-of-use asset or lease liability. The Company has made an accounting policy election, applicable to all asset types, not to separate lease from nonlease components when allocating contract consideration related to operating leases. Right-of-use assets and lease liabilities associated with operating and finance leases were included in the accompanying Condensed Consolidated Balance Sheets as follows: (in thousands) Financial Statement Presentation September 30, 2025 December 31, 2024 Operating leases: Right-of-use assets Prepaid expenses and other assets $ 9,747 $ 10,239 Lease liabilities Accounts payable and other liabilities 9,735 10,186 Financing leases: Right-of-use assets Prepaid expenses and other assets 2,232 — Lease liabilities Accounts payable and other liabilities 2,715 — Refer to Note 16 for obligations under operating and finance leases. Rental Expense Rental expense associated with operating leases is recorded on a straight-line basis over the term of each lease, for leases that have fixed and measurable rent escalations. The difference between rental expense incurred on a straight-line basis and the cash rental payments due under the provisions of the lease is recorded as part of the right-of-use asset in the accompanying Condensed Consolidated Balance Sheets. Rental expense associated with finance leases is recorded as interest expense on the lease liability and amortization expense on the right-of-use asset. Amounts associated with percentage rent provisions based on the achievement of sales targets are recognized as variable rental expense when achievement of the sales targets are considered probable. Ground lease expense for properties that are under development by the Company are capitalized to property under development until the development reaches substantial completion. Recently Issued Accounting Standards In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires a public entity to disclose additional information about specific expense categories in the notes to financial statements on an annual and interim basis. The amendments are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company will have the election to apply the amendments either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. While this update will result in enhanced disclosures, the Company does not expect it will have a material impact on the Company’s financial statements. 11 3. Acquisitions of Rental Property The Company closed on the following acquisitions during the nine months ended September 30, 2025: (in thousands, except number of properties) Property Type Number of Properties Real Estate Acquisition Price Date January 28, 2025 Retail 1 $ 9,871 February 13, 2025 Retail 1 495 (a) March 11, 2025 Industrial 1 41,088 March 28, 2025 Retail 4 8,045 April 24, 2025 Industrial 1 8,500 (a) May 16, 2025 Industrial 1 54,722 June 4, 2025 Industrial 1 3,400 (b) June 5, 2025 Retail 1 1,100 (a) June 12, 2025 Industrial 1 13,700 (a) June 13, 2025 Industrial 1 20,334 (c) July 1, 2025 Retail 1 13,069 July 2, 2025 Retail 1 8,265 August 1, 2025 Industrial 1 18,272 (c) August 6, 2025 Industrial 1 53,803 September 30, 2025 Industrial 1 64,325 18 $ 318,989 (d) (a) Acquisition of land to be developed in connection with a build-to-suit development. (b) Acquisition of land to be developed in connection with a build-to-suit development. In July 2025, the Company contributed these assets in exchange for common equity in a consolidated VIE (see Note 2). (c) Acquisition of land by a consolidated VIE in connection with a build-to-suit development (see Note 2). (d) Acquisition price excludes capitalized acquisition and development costs of $ 9.5 million. The Company closed on the following acquisitions during the nine months ended September 30, 2024: (in thousands, except number of properties) Property Type Number of Properties Real Estate Acquisition Price Date April 4, 2024 Retail 8 $ 84,500 (e) April 18, 2024 Industrial & Retail 5 65,000 May 21, 2024 Retail 1 12,590 May 30, 2024 Industrial 5 31,493 June 6, 2024 Industrial 1 9,470 June 24, 2024 Retail 2 14,000 September 3, 2024 Retail 1 10,180 September 5, 2024 Industrial 1 59,000 24 286,233 (f) (e) In April 2024, the Company acquired $ 52.0 million of real estate assets. In June 2024, the Company contributed these assets in exchange for preferred equity in a consolidated VIE (see Note 2). (f) Acquisition price excludes capitalized acquisition costs of $ 2.5 million. 12 The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the purchase price allocation for completed real estate acquisitions: (in thousands) For the Nine Months Ended September 30, 2025 2024 Land $ 18,917 $ 56,397 Land improvements 7,951 13,972 Buildings and improvements 206,788 198,524 Property under development 68,972 — Acquired in-place leases (g) 21,140 23,336 Acquired above-market leases (h) 1,947 1,028 Acquired below-market leases (i) ( 424 ) ( 4,503 ) Right-of-use asset 2,262 — Lease liability ( 2,681 ) — Prepaid expenses & other assets 3,606 — $ 328,478 $ 288,754 (g) The weighted average amortization period for acquired in-place leases is 12 years and 10 years for acquisitions completed during the nine months ended September 30, 2025 and 2024, respectively. (h) The weighted average amortization period for the acquired above-market leases is 15 years and six years for acquisitions completed during the nine months ended September 30, 2025 and 2024, respectively. (i) The weighted average amortization period for acquired below-market leases is 10 years and 9 years for acquisitions completed during the nine months ended September 30, 2025 and 2024, respectively. The above acquisitions were funded using a combination of available cash on hand and unsecured revolving credit facility borrowings. All real estate acquisitions closed during the nine months ended September 30, 2025 and 2024 qualified as asset acquisitions and as such, acquisition costs were capitalized. Subsequent to September 30, 2025, the Company closed on the following acquisitions (see Note 17): (in thousands, except number of properties) Property Type Number of Properties Real Estate Acquisition Price Date October 1, 2025 Industrial 1 $ 70,143 October 22, 2025 Industrial 1 30,076 2 $ 100,219 4. Sale of Real Estate The Company closed on the following sales of real estate, none of which qualified as discontinued operations: (in thousands, except number of properties) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Number of properties disposed 12 6 23 46 Aggregate sale price $ 38,723 $ 31,812 $ 59,694 $ 307,914 Aggregate carrying value ( 35,311 ) ( 28,927 ) ( 55,222 ) ( 238,773 ) Additional sales expenses ( 153 ) ( 444 ) ( 242 ) ( 4,185 ) Gain on sale of real estate $ 3,259 $ 2,441 $ 4,230 $ 64,956 13 5. Investment in Rental Property and Lease Arrangements The Company primarily leases its investment rental property to established tenants in the industrial and retail property types. At September 30, 2025, the Company had 759 real estate properties, 746 of which were leased under leases that have been classified as operating leases, nine that have been classified as direct financing leases, one that has been classified as a sales-type lease, and three that were vacant. Of the nine leases classified as direct financing leases, three include land portions which are accounted for as operating leases. Most leases have initial terms of 10 to 20 years. The Company’s leases generally provide for limited increases in rent as a result of fixed increases, increases in the Consumer Price Index (“CPI”), or increases in the tenant’s sales volume. Generally, tenants are also required to pay all property taxes and assessments, substantially maintain the interior and exterior of the building, and maintain property and liability insurance coverage. The leases also typically provide for one or more multiple-year renewal options, at the election of the tenant, and are subject to generally the same terms and conditions as the initial lease. Investment in Rental Property – Accounted for Using the Operating Method Depreciation expense on investment in rental property was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Depreciation $ 31,933 $ 30,006 $ 95,052 $ 89,480 Estimated lease payments to be received under non-cancelable operating leases with tenants at September 30, 2025 are as follows: (in thousands) Remainder of 2025 $ 102,365 2026 422,124 2027 407,252 2028 407,809 2029 397,251 Thereafter 3,126,505 $ 4,863,306 Since lease renewal periods are exercisable at the option of the tenant, the above amounts only include future lease payments due during the initial lease terms. Such amounts exclude any potential variable rent increases that are based on changes in the CPI or future variable rents which may be received under the leases based on a percentage of the tenant’s gross sales. Additionally, certain of our leases provide tenants with the option to terminate their leases in exchange for termination penalties, or that are contingent upon the occurrence of a future event. Future lease payments within the table above have not been adjusted for these termination rights. Investment in Rental Property – Direct Financing Leases The Company’s net investment in direct financing leases was comprised of the following: (in thousands) September 30, 2025 December 31, 2024 Undiscounted estimated lease payments to be received $ 29,522 $ 31,983 Estimated unguaranteed residual values 14,547 14,547 Unearned revenue ( 18,310 ) ( 20,277 ) Reserve for credit losses ( 86 ) ( 99 ) Net investment in direct financing leases $ 25,673 $ 26,154 14 Undiscounted estimated lease payments to be received under non-cancelable direct financing leases with tenants at September 30, 2025 are as follows: (in thousands) Remainder of 2025 $ 823 2026 3,357 2027 3,426 2028 3,496 2029 3,561 Thereafter 14,859 $ 29,522 The above rental receipts do not include future lease payments for renewal periods, potential variable CPI rent increases, or variable percentage rent payments that may become due in future periods. Investment in Rental Property – Sales-Type Leases The Company’s $ 14.4 million net investment in a sales-type lease was comprised of one lease during the three months ended September 30, 2025. The lease has $ 17.4 million of undiscounted estimated lease payments to be received throughout the remaining lease term, which expires in 2027. The following table summarizes amounts reported as Lease revenues, net in the Condensed Consolidated Statements of Income and Comprehensive Income: (in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Contractual rental amounts billed for operating leases $ 102,270 $ 96,596 $ 302,598 $ 289,881 Adjustment to recognize contractual operating lease billings on a straight-line basis 5,134 5,438 16,952 15,720 Net write-offs of accrued rental income ( 755 ) — ( 2,983 ) ( 2,556 ) Variable rental amounts earned 732 644 2,130 1,901 Earned income from direct financing leases 675 691 2,036 2,063 Interest income from sales-type leases 326 14 354 43 Operating expenses billed to tenants 5,752 5,537 15,491 15,292 Other income from real estate transactions 43 907 183 985 Adjustment to revenue recognized for uncollectible rental amounts billed, net ( 10 ) ( 1,430 ) ( 917 ) ( 3,659 ) Total lease revenues, net $ 114,167 $ 108,397 $ 335,844 $ 319,670 15 6. Intangible Assets and Liabilities, and Leasing Fees The following is a summary of intangible assets and liabilities, and leasing fees, and related accumulated amortization: (in thousands) September 30, 2025 December 31, 2024 Lease intangibles: Acquired above-market leases $ 41,173 $ 39,786 Less accumulated amortization ( 20,040 ) ( 18,599 ) Acquired above-market leases, net 21,133 21,187 Acquired in-place leases 407,543 406,146 Less accumulated amortization ( 170,531 ) ( 159,695 ) Acquired in-place leases, net 237,012 246,451 Total intangible lease assets, net $ 258,145 $ 267,638 Acquired below-market leases $ 91,674 $ 94,513 Less accumulated amortization ( 48,578 ) ( 45,782 ) Intangible lease liabilities, net $ 43,096 $ 48,731 Leasing fees $ 22,269 $ 21,781 Less accumulated amortization ( 7,521 ) ( 6,495 ) Leasing fees, net $ 14,748 $ 15,286 Amortization of intangible lease assets and liabilities, and leasing fees was as follows: (in thousands) Financial Statement Presentation For the Three Months Ended September 30, For the Nine Months Ended September 30, Intangible 2025 2024 2025 2024 Acquired in-place leases and leasing fees Depreciation and amortization $ 8,220 $ 7,926 $ 26,984 $ 23,462 Above-market and below-market leases Lease revenues, net 1,199 1,310 3,456 3,427 For the three and nine months ended September 30, 2025, amortization of all intangible assets and liabilities includes $ 0.3 million and $ 5.3 million, respectively, of accelerated amortization resulting from early lease terminations. There was no accelerated amortization for the three and nine months ended September 30, 2024. Estimated future amortization of intangible assets and liabilities, and leasing fees at September 30, 2025 is as follows: (in thousands) Remainder of 2025 $ 6,771 2026 26,478 2027 24,839 2028 22,617 2029 21,017 Thereafter 128,074 $ 229,796 16 7. Unsecured Credit Agreements and Unsecured Notes The following table summarizes the Company’s unsecured credit agreements and unsecured notes: Outstanding Balance (in thousands, except interest rates) September 30, 2025 December 31, 2024 Interest Rate Maturity Date Unsecured revolving credit facility $ 95,824 $ 93,014 Applicable reference rate + 0.85 % (a) Mar. 2029 (d) Unsecured term loans: 2026 Unsecured Term Loan — 400,000 one-month adjusted SOFR + 1.00 % (b) Feb. 2026 (e) 2027 Unsecured Term Loan 200,000 200,000 daily simple adjusted SOFR + 0.95 % (c) Aug. 2027 2028 Unsecured Term Loan 500,000 — one-month adjusted SOFR + 0.95 % (b) Mar. 2028 (f) 2029 Unsecured Term Loan 300,000 300,000 daily simple adjusted SOFR + 1.25 % (c) Aug. 2029 Total unsecured term loans 1,000,000 900,000 Unamortized debt issuance costs, net ( 5,450 ) ( 2,799 ) Total unsecured term loans, net 994,550 897,201 Senior unsecured notes: 2027 Senior Unsecured Notes - Series A 150,000 150,000 4.84 % Apr. 2027 2028 Senior Unsecured Notes - Series B 225,000 225,000 5.09 % Jul. 2028 2030 Senior Unsecured Notes - Series C 100,000 100,000 5.19 % Jul. 2030 2031 Senior Unsecured Public Notes 375,000 375,000 2.60 % Sep. 2031 2032 Senior Unsecured Public Notes 350,000 — 5.00 % Nov. 2032 Total senior unsecured notes 1,200,000 850,000 Unamortized debt issuance costs and original issuance discounts, net ( 9,685 ) ( 3,936 ) Total senior unsecured notes, net 1,190,315 846,064 Total unsecured debt, net $ 2,280,689 $ 1,836,279 (a) At September 30, 2025 and December 31, 2024, a balance of $ 24.0 million and $ 23.5 million, respectively, was subject to daily simple SOFR. The remaining balance of $ 100.0 million Canadian Dollars (“CAD”) borrowings remeasured to $ 71.8 million United States Dollars (“USD”) and $ 69.5 million USD, at September 30, 2025 and December 31, 2024, respectively, and was subject to daily simple CORRA of 2.56 % and 3.32 % at September 30, 2025 and December 31, 2024, respectively. (b) At September 30, 2025 and December 31, 2024, one-month SOFR was 4.13 % and 4.33 %, respectively. (c) At September 30, 2025 and December 31, 2024, overnight SOFR was 4.24 % and 4.49 %, respectively. (d) The Company’s unsecured revolving credit facility contains two six-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.0625 % of the revolving commitments. (e) The 2026 Unsecured Term Loan was paid in full on February 28, 2025, with borrowings from the 2028 Unsecured Term Loan. (f) The 2028 Unsecured Term Loan contains two twelve-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.125 % of the aggregate principal amount of the loans outstanding under the 2028 term loan facility. At September 30, 2025, the weighted average interest rate on all outstanding borrowings was 4.72 % exclusive of interest rate swap agreements, and 4.09 % inclusive of interest rate swap agreements. The Company is subject to various financial and operational covenants and financial reporting requirements pursuant to its unsecured credit agreements. These covenants require the Company to maintain certain financial ratios. As of September 30, 2025, and for all periods presented, the Company believes it was in compliance with all of its loan covenants. Failure to comply with the covenants would result in a default which, if the Company were unable to cure or obtain a waiver from the lenders, could accelerate the repayment of the obligations. Further, in the event of default, the Company may be restricted from paying dividends to its stockholders in excess of dividends required to maintain its REIT qualification. Accordingly, an event of default could have a material effect on the Company. On September 26, 2025, the Company completed a public offering of $ 350.0 million 5.00 % senior unsecured notes due in 2032 (the "2032 Senior Unsecured Public Notes"), issued at 99.151 % of the principal amount. The 2032 Senior Unsecured Public Notes require semi-annual interest payments through the maturity date of November 1, 2032, unless earlier redeemed. The 2032 Senior Unsecured Public Notes can be redeemed by the Company at par within two months of the maturity date, or the Company can call the notes at any time for the principal, accrued interest, and a make-whole amount based upon the applicable government bond yield plus 20 basis points. The proceeds were used to repay borrowings on the unsecured revolving credit facility, to fund investments in real estate, and for general corporate purposes. 17 On February 28, 2025, the Company amended and restated the $ 1.0 billion unsecured revolving credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, to extend the maturity date of the unsecured revolving credit facility to March 31, 2029, and entered into a $ 500.0 million term loan agreement maturing on March 31, 2028 (the “2028 Unsecured Term Loan”). The Company borrowed $ 400.0 million of the available borrowings on the closing date and the remaining $ 100.0 million was funded during May 2025. Borrowings under the 2028 Unsecured Term Loan are subject to interest only payments at variable rates equal to adjusted SOFR plus a margin based on the Company’s credit rating, ranging between 0.800 % and 1.600 % per annum. Based on the Company’s current credit rating, the applicable margin was 0.950 % as of September 30, 2025. Proceeds from the loan were used to repay the $ 400.0 million 2026 Unsecured Term Loan in full and repay a portion of the unsecured revolving credit facility. The amended and restated agreement includes an accordion feature to increase the aggregate facility size from $ 1.5 billion to $ 2.5 billion, subject to the willingness of existing or new lenders to fund such increase and other customary conditions. All remaining terms of the unsecured revolving credit facility remained the same. For each separate debt instrument, on a lender by lender basis, in accordance with ASC 470-50, Debt Modifications and Extinguishment , the Company performed an assessment of whether the transaction was deemed to be new debt, a modification of existing debt, or an extinguishment of existing debt. Debt issuance costs are either deferred and amortized over the term of the associated debt or expensed as incurred. With respect to the amended and restated unsecured credit agreement, the transaction was deemed to be a modification of debt. For the three and nine months ended September 30, 2025, the Company incurred $ 6.3 million and $ 18.6 million, respectively, in debt issuance costs associated with the amended and restated unsecured credit agreement and 2032 Senior Unsecured Public Notes, which have been deferred and are being amortized over the term of the associated debt. The Company did not incur debt issuance costs during the three and nine months ended September 30, 2024. Debt issuance costs and original issuance discounts are amortized as a component of Interest expense in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. The following table summarizes debt issuance cost and original issuance discount amortization: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Debt issuance costs and original issuance discount amortization $ 1,358 $ 983 $ 3,923 $ 2,949 8. Mortgages The Company’s mortgages consist of the following: (in thousands, except interest rates) Origination Date Maturity Date Interest Rate September 30, 2025 December 31, 2024 Lender Wilmington Trust National Association Apr. 2019 Feb. 2028 4.92 % $ 41,762 $ 42,838 (a) (b) (c) (d) Wilmington Trust National Association Jun. 2018 Aug. 2025 4.36 % — 18,283 (a) (b) (c) (d) PNC Bank Oct. 2016 Nov. 2026 3.62 % 15,443 15,792 (b) (c) Total mortgages 57,205 76,913 Debt issuance costs, net ( 37 ) ( 67 ) Mortgages, net $ 57,168 $ 76,846 (a) Non-recourse debt includes the indemnification/guaranty of the Company pertaining to fraud, environmental claims, insolvency, and other matters. (b) Debt secured by related rental property and lease rents. (c) Debt secured by guaranty of the OP. (d) Mortgage was assumed as part of the acquisition of the related property. The debt was recorded at fair value at the time of assumption. At September 30, 2025, investment in rental property with a net book value of $ 81.4 million was pledged as collateral against the Company’s mortgages. 18 Estimated future principal payments to be made under the above mortgages and the Company’s unsecured credit agreements (see Note 7) at September 30, 2025 are as follows: (in thousands) Remainder of 2025 $ 489 2026 16,843 2027 351,596 2028 763,277 2029 395,824 Thereafter 825,000 $ 2,353,029 Certain of the Company’s mortgages provide for prepayment fees and can be terminated under certain events of default as defined under the related agreements. These prepayment fees are not reflected as part of the table above. 9. Interest Rate Swaps In connection with the issuance of the 2032 Senior Unsecured Public Notes in September 2025 and repayment of outstanding borrowings of variable rate debt indexed to the daily simple SOFR rate (see Note 7), the Company terminated interest rate swap agreements with an aggregate termination value of $ 6.7 million. The Company determined it is not probable the hedged forecasted transactions will occur during the original periods, and therefore the $ 6.1 million of accumulated losses held in Other comprehensive income (loss) were reclassified to interest expense during the three and nine months ended September 30, 2025. Additionally, in September 2025, the Company entered into interest rate swap agreements indexed to the 7-year U.S. Treasury for an aggregate notional amount of $ 300.0 million in connection with the issuance of the 2032 Senior Unsecured Public Notes. These interest rate swaps were terminated upon issuance of the 2032 Senior Unsecured Public Notes. The Company determined it is probable the hedged forecasted transaction will occur during the original periods, and therefore will amortize $ 0.6 million of accumulated losses held in Other comprehensive income (loss) over the original term of the swap agreement, which ends in August 2032. 19 The following is a summary of the Company’s outstanding interest rate swap agreements: (in thousands, except interest rates) September 30, 2025 December 31, 2024 Counterparty Maturity Date Fixed Rate Variable Rate Index Notional Amount Fair Value Notional Amount Fair Value Effective Swaps: (a) Bank of Montreal January 2025 1.91 % daily compounded SOFR $ — $ — $ 25,000 $ 2 Truist Financial Corporation April 2025 2.20 % daily compounded SOFR — — 25,000 137 Bank of Montreal July 2025 2.32 % daily compounded SOFR — — 25,000 250 Truist Financial Corporation July 2025 1.99 % daily compounded SOFR — — 25,000 290 Truist Financial Corporation December 2025 2.30 % daily compounded SOFR 25,000 112 25,000 471 Bank of Montreal January 2026 1.92 % daily compounded SOFR 25,000 140 25,000 569 Bank of Montreal January 2026 2.05 % daily compounded SOFR 40,000 211 40,000 860 Capital One, National Association January 2026 2.08 % daily compounded SOFR 35,000 182 35,000 743 Truist Financial Corporation January 2026 1.93 % daily compounded SOFR 25,000 139 25,000 567 Capital One, National Association April 2026 2.68 % daily compounded SOFR 15,000 97 15,000 280 Capital One, National Association July 2026 1.32 % daily compounded SOFR 35,000 651 35,000 1,454 Bank of Montreal December 2026 2.33 % daily compounded SOFR 10,000 158 10,000 346 Bank of Montreal December 2026 1.99 % daily compounded SOFR 25,000 500 25,000 1,030 Toronto-Dominion Bank March 2027 2.46 % daily compounded CORRA 14,365 (b) 29 13,903 (b) 166 Wells Fargo Bank, N.A. April 2027 2.72 % daily compounded SOFR 25,000 305 25,000 757 Bank of Montreal December 2027 2.37 % daily compounded SOFR 25,000 585 25,000 1,230 Capital One, National Association December 2027 2.37 % daily compounded SOFR 25,000 583 25,000 1,227 Wells Fargo Bank, N.A. January 2028 2.37 % daily compounded SOFR 75,000 1,754 75,000 3,693 Bank of Montreal May 2029 2.09 % daily compounded SOFR 25,000 1,146 25,000 2,024 Regions Bank May 2029 2.11 % daily compounded SOFR 25,000 1,128 25,000 1,999 Regions Bank June 2029 2.03 % daily compounded SOFR 25,000 1,200 25,000 2,085 U.S. Bank National Association June 2029 2.03 % daily compounded SOFR 25,000 1,200 25,000 2,087 Regions Bank August 2029 2.58 % one-month SOFR 100,000 2,576 100,000 5,799 Toronto-Dominion Bank August 2029 2.58 % one-month SOFR 45,000 1,180 45,000 2,642 U.S. Bank National Association August 2029 2.65 % one-month SOFR 15,000 355 15,000 835 U.S. Bank National Association August 2029 2.58 % one-month SOFR 100,000 2,585 100,000 5,820 U.S. Bank National Association August 2029 1.35 % daily compounded SOFR 25,000 1,887 25,000 2,894 Bank of Montreal March 2030 3.80 % daily simple SOFR — (e) — 80,000 541 JPMorgan Chase Bank, N.A. March 2030 3.79 % daily simple SOFR — (e) — 50,000 371 U.S. Bank National Association June 2030 3.73 % daily simple SOFR — (e) — 70,000 666 Truist Financial Corporation June 2030 3.73 % daily simple SOFR — (e) — 55,000 508 Manufacturers & Traders Trust Company September 2030 3.71 % daily simple SOFR — (e) — 50,000 512 Regions Bank September 2030 3.69 % daily simple SOFR — (e) — 15,000 159 Truist Financial Corporation September 2030 3.70 % daily simple SOFR — (e) — 15,000 159 Regions Bank March 2032 2.69 % daily compounded CORRA 14,365 (b) 185 13,903 (b) 358 U.S. Bank National Association March 2032 2.70 % daily compounded CORRA 14,365 (b) 181 13,903 (b) 354 Bank of Montreal March 2034 2.81 % daily compounded CORRA 28,730 (c) 521 27,805 (c) 846 841,825 19,590 1,274,514 44,731 Forward Starting Swaps: (a) (d) Toronto-Dominion Bank December 2030 3.66 % daily simple SOFR 70,000 ( 1,110 ) 70,000 846 Regions Bank December 2030 3.66 % daily simple SOFR 55,000 ( 884 ) 55,000 643 125,000 ( 1,994 ) 125,000 1,489 Total Swaps $ 966,825 $ 17,596 $ 1,399,514 $ 46,220 (a) The classification between “effective” and “forward starting” swaps is determined as of the most recent period presented. (b) The contractual notional amount is $ 20.0 million CAD. (c) The contractual notional amount is $ 40.0 million CAD. (d) Forward starting swaps have effective dates that are five years prior to each respective maturity date. (e) Interest rate swap was terminated in September 2025. 20 At September 30, 2025, the weighted average interest rate on all outstanding borrowings was 4.09 %, inclusive of a weighted average fixed rate on effective interest rate swaps of 2.30 %. The total amounts recognized, and the location in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income, from converting from variable rates to fixed rates under these agreements were as follows: Amount of Loss Recognized in Accumulated Other Comprehensive Income Reclassification from Accumulated Other Comprehensive Income Total Interest Expense Presented in the Condensed Consolidated Statements of Income and Comprehensive Income (in thousands) Location Amount of (Loss) Gain For the Three Months Ended September 30, 2025 $ 4,981 Interest expense $ ( 1,419 ) $ 28,230 2024 41,682 Interest expense 7,628 18,178 Amount of Loss Recognized in Accumulated Other Comprehensive Income Reclassification from Accumulated Other Comprehensive Income Total Interest Expense Presented in the Condensed Consolidated Statements of Income and Comprehensive Income (in thousands) Location Amount of Gain For the Nine Months Ended September 30, 2025 $ 35,336 Interest expense $ 8,051 $ 69,416 2024 31,334 Interest expense 22,795 54,512 Amounts related to the interest rate swaps expected to be reclassified out of Accumulated other comprehensive income to Interest expense during the next twelve months are estimated to be a gain of $ 8.5 million. 10. Non-Controlling Interests The following table summarizes OP Units exchanged for shares of common stock: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 OP Units exchanged for shares of common stock 86 46 330 173 Value of units exchanged $ 1,329 $ 744 $ 5,211 $ 2,812 11. Credit Risk Concentrations The Company maintained bank balances that, at times, exceeded the federally insured limit during the nine months ended September 30, 2025. The Company has not experienced losses relating to these deposits and management does not believe that the Company is exposed to any significant credit risk with respect to these amounts based on the financial position and capitalization of the applicable banks. For the nine months ended September 30, 2025 and 2024, the Company had no individual tenants or common franchises that accounted for more than 10% of Lease revenues, net, excluding lease termination fees. 21 12. Equity At-the-Market Program (“ATM Program”) The Company enters into ATM Programs through which it may, from time to time, publicly offer and sell shares of common stock. The Company’s ATM Programs also provide for forward sale agreements, enabling the Company to set the price of shares upon pricing the offering, while delaying the issuance of shares and the receipt of the net proceeds. During 2024, the Company replaced its prior $ 400.0 million ATM Program (“2021 ATM Program”) with a new $ 400.0 million ATM Program (“2024 ATM Program”), and the 2021 ATM Program was simultaneously terminated. The following table presents information about the Company’s ATM Programs: (in thousands) Program Year Program Size Aggregate Gross Sales Shares Issued 2021 (a) $ 400,000 $ 254,620 11,542 2024 400,000 40,003 2,188 (a) ATM Program has been terminated and no future issuance will occur. During 2024, the Company entered into forward sale agreements to sell an aggregate of 2,187,700 shares of common stock under the 2024 ATM Program at a weighted-average share price of $ 18.29 , subject to certain adjustments. The Company expects to settle the outstanding shares of common stock in the fourth quarter of 2025 for expected net proceeds of approximately $ 37.3 million. As of September 30, 2025, the Company has not settled any of the outstanding shares of these forward sales agreements. There was no ATM Program activity during the nine months ended September 30, 2024. After considering the shares sold subject to forward sale agreements, the Company has $ 360.0 million of capacity remaining under the ATM Program as of September 30, 2025. Stock Repurchase Program The Company has a stock repurchase program (the “Repurchase Program”), which authorizes the Company to repurchase up to $ 150.0 million of the Company’s common stock. On March 11, 2025, the Company’s Board of Directors re-authorized the Repurchase Program for a 12-month period ending on March 14, 2026. The Repurchase Program may be extended, suspended, or discontinued at any time. Under the Repurchase Program, repurchases of the Company’s stock can be made in the open market or through private transactions from time to time over the 12-month period, depending on prevailing market conditions and compliance with applicable legal and regulatory requirements. The timing, manner, price, and amount of any repurchases of common stock under the Repurchase Program will be determined at the Company’s discretion, using available cash resources. During the nine months ended September 30, 2025 and 2024, no shares of the Company’s common stock were repurchased under the Repurchase Program. 22 13. Stock-Based Compensation Restricted Stock Awards During the three and nine months ended September 30, 2025, the Company awarded 1,180 and 317,156 shares of restricted stock awards (“RSAs”), respectively, to officers, employees, and non-employee directors under the Company’s equity incentive plan. During the three and nine months ended September 30, 2024, the Company awarded 564 and 833,571 shares of RSAs, respectively, to officers, employees, and non-employee directors under the Company’s equity incentive plan. The holder of RSAs is generally entitled at all times on and after the date of issuance of the restricted common shares to exercise the rights of a stockholder of the Company, including the right to vote the shares and the right to receive dividends on the shares. The Company’s outstanding RSAs vest over a one -, three -, four -, or five-year period from the date of the grant and are subject to the holder’s continued service through the applicable vesting dates and in accordance with the terms of the individual award agreements. The weighted average value of awards granted per share during the three and nine months ended September 30, 2025, were $ 16.24 and $ 16.75 , respectively, which were based on the market price per share of the Company’s common stock on the grant dates. The weighted average value of awards granted per share during the three and nine months ended September 30, 2024, were $ 17.41 and $ 14.77 , respectively. The following table presents information about the Company’s RSAs: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Compensation cost $ 1,466 $ 1,225 $ 4,268 $ 3,614 Dividends declared on unvested RSAs 311 284 934 879 Fair value of shares vested during the period — — 3,779 3,969 As of September 30, 2025, there was $ 12.1 million of unrecognized compensation costs related to the unvested restricted shares, which is expected to be recognized over a weighted average period of 2.9 years. The following table presents information about the Company’s restricted stock activity: For the Three Months Ended September 30, 2025 2024 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share Unvested at beginning of period 1,071 $ 15.69 1,036 $ 15.51 Granted 1 16.24 1 17.41 Vested — — — — Forfeited ( 1 ) 16.85 ( 57 ) 15.40 Unvested at end of period 1,071 15.69 980 15.51 For the Nine Months Ended September 30, 2025 2024 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share Unvested at beginning of period 989 $ 15.51 492 $ 18.63 Granted 317 16.75 834 14.77 Vested ( 227 ) 16.36 ( 259 ) 18.70 Forfeited ( 8 ) 16.60 ( 87 ) 16.55 Unvested at end of period 1,071 15.69 980 15.51 23 Performance-based Restricted Stock Units During the nine months ended September 30, 2025 and 2024, the Company issued target grants of 246,967 and 202,308 of performance-based restricted stock units (“PRSUs”), respectively, under the Company’s equity incentive plan to the officers of the Company. During the three months ended September 30, 2025 and 2024, there were no PRSUs issued. The awards are non-vested restricted stock units where the vesting percentages and the ultimate number of units vesting will be measured 50 % based on the relative total shareholder return (“rTSR”) of the Company’s common stock as compared to the rTSR of peer companies, as identified in the grant agreements, over a three-year period, and 50 % based on the rTSR of the Company’s common stock as compared to the rTSR of the MSCI US REIT Index over a three year measurement period. Vesting percentages range from 0 % to 200 % with a target of 100 %. rTSR means the percentage appreciation in the fair market value of one share over the three-year measurement period beginning on the date of grant, assuming the reinvestment of dividends on the ex-dividend date. The target number of units is based on achieving a rTSR equal to the 55 th percentile of the peer companies and MSCI US REIT Index. For PRSUs issued during the nine months ended September 30, 2025 and 2024 that achieve a percentile rank of at least the 55 th percentile, and the absolute rTSR of the Company is negative for the performance period, the awards will be reduced by 25 %, not to result in a reduction less than target. Dividends accrue during the measurement period and will be paid on the PRSUs ultimately earned at the end of the measurement period in either cash or common stock, at the discretion of the Compensation Committee of the Board of Directors. The grant date fair value of the PRSUs was measured using a Monte Carlo simulation model based on assumptions including share price volatility. The following table presents compensation cost recognized on the Company’s performance-based restricted stock units: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Compensation cost $ 1,022 $ 604 $ 2,838 $ 1,763 As of September 30, 2025, there was $ 6.2 million of unrecognized compensation costs related to the unvested PRSUs, which is expected to be recognized over a weighted average period of 2.0 years. The following table presents information about the Company’s performance-based restricted stock unit activity: For the Three Months Ended September 30, 2025 2024 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share Unvested at beginning of period 606 $ 20.13 446 $ 20.89 Granted — — — — Vested — — — — Forfeited — — ( 14 ) 20.56 Unvested at end of period 606 20.13 432 20.90 For the Nine Months Ended September 30, 2025 2024 (in thousands, except per share amounts) Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share Unvested at beginning of period 433 $ 20.90 351 $ 24.90 Granted 247 21.12 202 15.84 Vested ( 74 ) 27.93 ( 88 ) 24.40 Forfeited — — ( 33 ) 23.18 Unvested at end of period 606 20.13 432 20.90 24 14. Earnings per Share The following table summarizes the components used in the calculation of basic and diluted earnings per share (“EPS”): (in thousands, except per share amounts) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Basic earnings: Net earnings attributable to Broadstone Net Lease, Inc. common shareholders $ 26,466 $ 35,608 $ 63,369 $ 136,051 Less: earnings allocated to unvested restricted shares ( 311 ) ( 284 ) ( 931 ) ( 879 ) Net earnings used to compute basic earnings per common share $ 26,155 $ 35,324 $ 62,438 $ 135,172 Diluted earnings: Net earnings used to compute basic earnings per common share $ 26,155 $ 35,324 $ 62,438 $ 135,172 Add: net earnings attributable to OP Unit holders 1,146 1,660 2,739 6,331 Net earnings used to compute diluted earnings per common share $ 27,301 $ 36,984 $ 65,177 $ 141,503 Weighted average number of common shares outstanding 189,170 188,521 189,056 188,315 Less: weighted average unvested restricted shares (a) ( 1,071 ) ( 1,025 ) ( 1,054 ) ( 907 ) Weighted average number of common shares outstanding used in basic earnings per common share 188,099 187,496 188,002 187,408 Add: effects of restricted stock units (b) 1,171 649 1,066 572 Add: effects of convertible OP Units (c) 8,362 8,787 8,408 8,819 Weighted average number of common shares outstanding used in diluted earnings per common share 197,632 196,932 197,476 196,799 Basic earnings per share $ 0.14 $ 0.19 $ 0.33 $ 0.72 Diluted earnings per share $ 0.14 $ 0.19 $ 0.33 $ 0.72 (a) Represents the weighted average effects of 1,070,775 and 979,140 unvested restricted shares of common stock as of September 30, 2025 and 2024, respectively, which will be excluded from the computation of earnings per share until they vest. (b) Represents the weighted average effects of shares of common stock to be issued as though the end of the period were the end of the performance period (see Note 13). (c) Represents the weighted average effects of 8,315,458 and 8,754,702 OP Units outstanding at September 30, 2025 and 2024, respectively. 15. Supplemental Cash Flow Disclosures The following table summarizes the Company’s supplemental cash flow information: For the Nine Months Ended September 30, (in thousands) 2025 2024 Supplemental disclosures: Cash paid for interest $ 58,518 $ 51,220 Cash paid for income taxes 1,059 204 Non-cash activities: Issuance and conversion of OP Units to common stock (a) 5,211 2,811 Dividends declared not yet paid 58,665 58,163 Reclassifications from Property under development to Buildings and improvements upon substantial completion of development properties 2,612 184,676 Reclassification of operating lease to sales-type lease 14,408 — (a) See Note 10. 25 16. Commitments and Contingencies Litigation From time to time, the Company is a party to various litigation matters incidental to the conduct of the Company’s business. While the resolution of such matters cannot be predicted with certainty, based on currently available information, the Company does not believe that the final outcome of any of these matters will have a material effect on its consolidated financial position, results of operations, or liquidity. Property and Acquisition Related In connection with ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company is not aware of any non-compliance, liability, claim, or other environmental condition that would have a material effect on its consolidated financial position, results of operations, or liquidity. As of September 30, 2025, the Company has commitments to fund eight build-to-suit transactions with remaining obligations of $ 235.8 million expected to fund in multiple draws through October 2026, using a combination of available cash on hand and revolving credit facility borrowings. Rent is contractually scheduled to commence when the properties reach substantial completion and are made available for use by the tenant, which is expected to occur at various dates between October 2025 and October 2026. The Company is a party to two separate tax protection agreements with the contributing members of two distinct UPREIT transactions and a third tax protection agreement entered into in connection with the Company’s internalization. The tax protection agreements require the Company to indemnify the beneficiaries in the event of a sale, exchange, transfer, or other disposal of the contributed property, and in the case of the tax protection agreement entered into in connection with the Company’s internalization, the entire Company, in a taxable transaction that would cause such beneficiaries to recognize a gain that is protected under the agreements, subject to certain exceptions. The Company is required to allocate an amount of nonrecourse liabilities to each beneficiary that is at least equal to the minimum liability amount, as contained in the agreements. The minimum liability amount and the associated allocation of nonrecourse liabilities are calculated in accordance with applicable tax regulations, are completed at the OP level, and are not probable. Therefore, there is no impact to the Condensed Consolidated Financial Statements. Based on values as of September 30, 2025, taxable sales of the applicable properties would trigger liability under the agreements of approximately $ 20.4 million. Based on information available, the Company does not believe that the events resulting in damages as detailed above have occurred or are likely to occur in the foreseeable future. In the normal course of business, the Company enters into various types of commitments to purchase real estate properties. These commitments are generally subject to the Company’s customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated to purchase the properties. Obligations Under Operating and Finance Leases As described in Note 2, the Company is a lessee under non-cancelable operating and finance leases associated with its corporate headquarters and other office spaces as well as ground leases. The Company’s obligations under leases primarily consist of a lease for the Company’s corporate office space, which expires in October 2033 and was determined to be an operating lease. The lease contains two five-year extension options, exercisable at the Company’s discretion, that are not reasonably certain to be exercised, and are therefore excluded from our calculation of the lease liability. The remaining lease obligations primarily consist of ground leases that, in accordance with the terms of our leases, are typically required to be reimbursed by our tenants. The Company remains primarily responsible for ground leases in the event a tenant is unable to pay. The weighted average discount rate on our operating and finance leases is 8.4 %. The weighted average years remaining on our operating and finance lease liabilities is 27.2 years . 26 The following table summarizes the total lease costs associated with operating and finance leases: (in thousands) Financial Statement Presentation For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Operating lease costs: Office leases General and administrative $ 215 $ 254 $ 755 $ 758 Ground leases Property and operating expense 40 33 106 108 Ground leases - development properties Property under development 55 — 166 — Variable lease costs - ground leases Property and operating expense 17 16 54 44 Financing lease costs: Amortization of right-of-use assets Depreciation and amortization 14 — 36 — Interest expense on lease liabilities Interest expense 68 — 180 — Total lease cost $ 409 $ 303 $ 1,297 $ 910 The following table summarizes payments associated with obligations under operating and finance leases reported as Net cash provided by operating activities on the accompanying Condensed Consolidated Statements of Cash Flows: For the Nine Months Ended September 30, (in thousands) 2025 2024 Operating lease payments $ 1,054 $ 733 Financing lease payments 145 — Total $ 1,199 $ 733 At September 30, 2025, minimum future rental payments due from the Company for operating and finance leases over the next five years and thereafter are as follows: (in thousands) Operating Leases Financing Leases Remainder of 2025 $ 326 $ 54 2026 1,306 218 2027 1,251 218 2028 1,134 218 2029 1,174 238 Thereafter 15,834 18,306 Total undiscounted lease payments 21,025 19,252 Present value adjustment for remaining lease payments ( 11,290 ) ( 16,537 ) Total lease liability $ 9,735 $ 2,715 17. Subsequent Events On October 15, 2025, the Company paid distributions totaling $ 57.3 million. On October 23, 2025, the Board of Directors declared a quarterly distribution of $ 0.29 per share on the Company’s common stock and OP Units for the fourth quarter of 2025, which will be payable on or before January 15, 2026 to stockholders and OP Unit holders of record as of December 31, 2025. Subsequent to September 30, 2025, the Company borrowed $ 103.0 million, and paid down $ 24.0 million on the unsecured revolving credit facility, the proceeds of which were used to fund investment activity and for general corporate purposes. Subsequent to September 30, 2025, the Company acquired $ 100.2 million in two rental properties (see Note 3), and invested $ 19.4 million in 7 build-to-suit developments. 27