REAL ESTATE NEWS

Broadstone Net Lease (BNL) will expand its build-to-suit pipeline with a new project in Colorado. The net lease REIT plans to pour roughly $303 million into building an advanced technology facility and has formed a joint venture with an unnamed existing development partner.

Along with announcing the new development — it is coming with major cash flow. The site has secured a triple net lease tenant for a 15-year deal, which includes two five-year extension options allowing for 3 percent yearly rent hikes. This tenant was identified as a Fortune 20 investment-grade firm that will become BNL's largest renter in its portfolio.

"This transaction represents a landmark moment for Broadstone Net Lease and is a powerful validation of our build-to-suit development strategy," John Moragne, BNL's CEO, said in a statement.

"Securing a long-term, triple-net lease with one of the world's premier companies at an initial cash yield of 8.5% and a straight-line yield of 11.6% is an exceptional outcome that reflects the unique capabilities of our team and the strength of our long-standing developer relationships.

Furthermore, the two-year cash yield is estimated at 9.7 percent.

BNL, which mainly invests in single-tenant CRE assets, has a portfolio that concentrates mostly on industrial (62.8 percent). That's followed by retail at 29.4 percent, office at 5.5 percent and clinical and surgical at 2.3 percent, according to the developer. The annualized rent on its portfolio comes out to $438.8 million.

BNL's latest project aims to accommodate a second powered shell building, according to the Victor, New York-based firm. The facility will span roughly 120,000 square feet and will provide reliable and affordable power while offering proximity to customers. Moragne expects the facility to achieve "meaningful" growth in BNL's earnings in both 2027 and 2028.

With rent commencement estimated for March 2027, the joint venture controls the land — leaving the option for more development at the site.

Source: GlobeSt/ALM