管理層發言
Hello. And welcome to Broadstone Net Lease's second quarter 2026 earnings conference call. My name is Matthew, and I will be your operator today. Please note that today's call is being recorded. I will now turn the call over to Brent Maedl, director of corporate finance and investor relations at Broadstone. Please go ahead.
Thank you, everyone, for joining us today for Broadstone Net Lease's second quarter 2026 Earnings Call. On today's call, you will hear prepared remarks from Chief Executive Officer John D. Moragne, President and Chief Operating Officer Ryan Albano, and Chief Financial Officer Kevin Fennell. All three will be available for the Q&A portion of this call. As a reminder, the following discussion and answers to questions contain forward-looking statements that are subject to risks and uncertainties that can cause actual results to differ materially due to a variety of factors. We caution you not to place undue reliance on these forward-looking statements. For a more detailed discussion of risk factors that may cause such differences, please refer to our SEC filings, including our Form 10-K for the year ended 12/31/2025, and note that such risk factors may be updated in our quarterly SEC filings. Any forward-looking statements provided during this conference call are only made as of the date of this call. With that, I will turn the call over to John.
Thank you, Brent, and good morning, everyone. Second quarter was, in many respects, the quarter we have been building toward for the last few years, one that underscores the earnings power of our differentiated growth strategy and the strength of our portfolio. We advanced our committed build-to-suit platform through both existing and new relationships, raised our full year investment guidance by more than $100 million at the midpoint, lowered our bad debt assumption which is a direct reflection of the sustained improvement in our portfolio performance, and are raising the midpoint of our full year AFFO per share guidance range to $1.56 representing nearly 5% earnings growth over 2025. And subsequent to quarter end, we announced the largest transaction in our history as a public company. Collectively, these results give us a lot of conviction as we enter the back half of the year and into 2027. Before I walk through the quarter, I want to spend a moment on the news we announced on July 8, because it is emblematic of everything we have been working toward over the last few years. Subsequent to quarter end, we entered into a joint venture to develop an advanced technology facility in Colorado for a Fortune 20 investment-grade company, adding a $303 million project to our committed build-to-suit pipeline. This is a landmark development for one of the most creditworthy tenants in the world. And upon rent commencement, this tenant is expected to become Broadstone's largest by ABR. The investment is expected to be meaningfully accretive to both our 2027 and 2028 earnings. It is a powerful validation of the strategy we have built and the caliber of opportunities our team and our long-standing developer relationships continue to source. The facility will be delivered as a powered shell with 100 megawatts of capacity, all of which is already committed to the site today, under a 15-year triple net lease with two 5-year extension options and 3% annual rent increases. The transaction generates a straight-line yield of approximately 11.6% with initial cash yields that step up as power is delivered: approximately 8.5% in year one rising to approximately 9.7% in year two. Substantial completion and rent commencement are anticipated by mid-2027. The joint venture owns and controls the land for the full campus, with a site designed to accommodate a second 100-megawatt powered shell building which the tenant holds a right of first refusal. I would frame that second building as future optionality and not committed pipeline that we are including in our stated numbers today, but it is a real potential opportunity and is exactly the kind of embedded optionality that makes our build-to-suit strategy uniquely valuable. We are funding the project through our build-to-suit pipeline over the construction period with approximately $233 million of estimated remaining investment. Turning to our broader investment activity, during the second quarter, we invested $91.5 million comprised primarily of $77.3 million in build-to-suit developments and $13.5 million in transitional capital. With the addition of the Colorado development, our in-process build-to-suit pipeline now stands at approximately $645 million, providing a laddered, de-risked runway of high-quality developments scheduled to reach stabilization through 2027. In total, from our build-to-suit pipeline alone, we expect approximately $17 million of incremental annualized base rent to come online during the third and fourth quarters of this year, with an additional $29 million coming online in the first half of 2027 as the Colorado development and other projects reach rent commencement. That is approximately $46 million of incremental ABR from committed in-process developments reaching stabilization between the third quarter of 2026 and the first half of 2027, equating to over 10% growth on our current in-place portfolio ABR. That is a degree of forward visibility into growth that is rare in our space. Turning to our in-place portfolio, it continues to perform exactly as designed with no significant concerns. We ended the quarter nearly fully occupied with all but one of our 766 properties subject to a lease, and 99.9% of base rents collected. We also remained active with dispositions, continuing to opportunistically recycle capital out of mature and noncore assets into the accretive, growth-oriented opportunities our pipeline provides. We sold nine properties during the quarter for gross proceeds of $62 million at a 6.4% capitalization rate on tenanted properties. Subsequent to quarter end, we sold two additional properties for gross proceeds of $4.2 million, bringing our year-to-date total to 12 properties sold for gross proceeds of $78.3 million at a weighted average capitalization rate of 6.2% on tenanted properties. I also want to briefly note that we continue to be incredibly excited about Project Triboro. We made meaningful progress this quarter on each of our three key work streams, including power, zoning, and leasing, and our conviction in the value this asset can create for shareholders continues to grow. Brian will provide a more detailed update in a few moments. Based on the strength of our year-to-date performance, the accretive investment activity we have layered in, and the visibility that our build-to-suit pipeline provides into the back half of this year and into 2027, we are raising our full year 2026 guidance. We now expect AFFO per share of $1.55 to $1.57, revised up from $1.53 to $1.57, with the midpoint of our guidance range moving to $1.56 representing nearly 5% earnings growth over 2025. This raise reflects both the durability of our in-place portfolio and our conviction in the pipeline we have assembled, which gives us a clear line of sight into earnings growth not seen in our history. On the capital side, the environment is more constructive for us than it has been at any point in the last few years. Our shares are trading at 52-week highs. Our cost of equity has improved materially. Our balance sheet is well structured, and our pipeline of accretive investment opportunities is the deepest it has been since we became a public company. That combination of a strong cost of capital alongside a high-quality, visible opportunity set is exactly the setup in which disciplined capital deployment can create the most value for shareholders. That said, our approach has not changed, and we will remain disciplined and opportunistic across all of our capital sources. During the quarter, we raised approximately $45.5 million of equity under our ATM program on a forward basis at a weighted average price of $20.77 per share. And as I noted earlier, we continue to recycle capital through accretive dispositions, with year-to-date gross proceeds of $78.3 million at a weighted average capitalization rate of 6.2%. Together, this balance of constructive equity capital and accretive dispositions has kept us well-funded for the pipeline ahead, while maintaining the financial discipline that has defined our approach over the last few years. Kevin will take you through the details of our balance sheet and funding plan in a moment. The momentum we are carrying into the back half of this year is not accidental. It is the product of our differentiated growth strategy and years of disciplined execution, deliberate portfolio construction, and a unique build-to-suit platform that is now delivering at scale, with meaningful contributions still ahead in 2027 and 2028. I am excited about what we have in front of us, and I will hand the call over to Ryan and Kevin who will each walk you through more of what is driving our confidence.
Thank you, John, and good morning, everyone. The Colorado transaction speaks for itself in terms of scale, but I want to spend a moment on what it says about our platform more broadly because the same discipline is showing up across the entire pipeline. Let me walk you through where that pipeline stands today, how our in-place portfolio is performing, and then turn to Project Triboro, where we made real progress this quarter. Starting with the pipeline, inclusive of Colorado, our committed and in-process build-to-suit investments now total approximately $645 million with a weighted average estimated initial cash yield of approximately 7.9% and a weighted average straight-line yield of approximately 9.9%, supported by a weighted average lease term of approximately 13.7 years and annual rent escalations of approximately 2.7%. These are tenant-driven, mission-critical developments structured from the outset to mitigate the risks that typically come with ground-up development, and they are the engine behind the growth John just walked you through. Turning to our in-place portfolio, occupancy remained strong at nearly 100% on a square footage basis during the quarter, with all but one property subject to a lease. Same-store rental revenue grew 2.2% year over year, led by 3.3% growth across our industrial portfolio, and our remaining 2026 lease expirations are modest at approximately 1.9% of ABR. I also want to spend a moment on our redevelopment activity because it is a good example of value creation that is only possible because of the platform we have built. Having in-house development capability, trusted external advisers, and a deep network of developers means that when these roles were not limited to selling the asset or holding it vacant, redevelopment is a real option we evaluate asset by asset. This quarter, we began redeveloping a functionally obsolete office asset in the Chicago MSA, previously leased to C.H. Robinson, into industrial space. The site sits in a dense infill industrial submarket with limited supply and robust tenant demand given its proximity to O'Hare. We have commenced demolition of the existing building and plan to construct a new approximately 156,000-square-foot building on-site. Total estimated project investment is approximately $17.9 million. The asset carried original annualized base rent of approximately $1.4 million. We expect stabilized ABR of approximately $2.7 million upon completion, nearly double the rent that was expiring, with stabilization targeted for the second quarter of 2027. We are already seeing interest from tenants in the market and are responding to several RFPs. We added a second redevelopment project at the start of the third quarter: our former Claire's asset in Hoffman Estates, Illinois along Interstate 90. We evaluated several options for the property, including re-leasing, a vacant sale and redevelopment. We believe the market backdrop supports a redevelopment project, scrape and rebuild, and we are currently sharpening our evaluation between a full renovation of the existing structure to make it more functional and desirable for future tenants. Separately, we continue to market the property for lease or sale while we advance that work as we do with all of our assets. Now turning to Project Triboro. As a reminder, this is a large site in Northeastern Pennsylvania — more than 550 acres of land with a committed one-gigawatt power supply. We made meaningful progress this quarter, and I want to be clear about why we continue to view this as such a unique asset. We did not underwrite Triboro as a single-outcome investment and today we see three distinct paths forward, each of which creates real value for shareholders. First, we could monetize the land in the near term, either by selling some or all of the individual parcels to industrial developers as a powered land sale or, given the site and power work we have advanced today, to a data center developer. We have received unsolicited interest at valuations that are potentially multiples of our approximately $120 million of invested capital, and we would participate in any upside from a sale under the terms of our joint venture. Second, as originally underwritten, the site can support four large box industrial buildings totaling approximately 4.5 million square feet, representing an estimated $520 million of total development with a mid- to high-7% yield on cost range at current market rent levels. Our view is that stabilized valuations would reflect approximately 150 basis points or more of spread relative to that yield on cost. That view is supported by the leasing environment on the ground, where large box product in Northeastern Pennsylvania remains scarce, with well under 2 million square feet of existing 700,000-plus-square-foot space in the submarket. And the two large box leases signed in the market over the past year closed at rents consistent with our underwriting. Our first building could be delivered as early as mid-2028. Third, and currently our highest and best use, is a hyperscale data center campus with a multiphase build-out, power beginning to deliver as early as mid-2028 and total project costs in excess of $2.5 billion. The economics here would likely look similar to the transaction we just announced in Colorado. Turning to the work underway to advance all three paths. On-site work: we continue to progress earthwork that is common to both an industrial and a data center outcome, meaning this work supports our optionality across paths rather than committing us to one. The first of four building pads remains on track to be pad-ready during the fourth quarter, with the remaining three following during 2027. PPL has completed its required public town hall meetings and has selected both the site for its new substation and the transmission line path to our property. We are currently reviewing a draft of the electric service agreement, and design and engineering work on our on-site substation continues. The timeline remains consistent with our previous expectations. On zoning, we continue to engage constructively with the borough regarding our position that a data center is permitted by right under the property's existing zoning. At the same time, the borough has adopted a zoning ordinance amendment that allows data centers as a conditional use, providing an alternative path to development if needed. We remain focused on working collaboratively with the borough to advance the project while preserving the flexibility afforded by both the by-right and conditional-use paths. Alongside this work, we have seen increased interest from potential hyperscale tenants and we are currently engaging with several on the project. Overall, we continue to expect clarity on zoning, power, and tenant demand this year, which supports our target of deciding among our three paths — near-term land monetization, industrial development, or hyperscale data center campus — by year end. Taken together, Colorado and Triboro represent the clearest demonstration yet of what this platform can do. Our pipeline has never been deeper, our external adviser and developer relationships have never been stronger, and the growth visibility we are building into 2027 and 2028 is something very few companies in our space can offer. With that, I will turn the call over to Kevin.
Thank you, Ryan. During the quarter, we generated adjusted funds from operations of $78.2 million or $0.39 per share, representing a 2.6% increase over the second quarter of 2025. Results benefited from same-store rent growth and from recent investment activity in build-to-suits reaching stabilization. General and administrative expenses were in line with expectations, with core G&A of $7.3 million pacing nicely to achieve our full year G&A guidance of $30 million to $31 million. With respect to the balance sheet, we ended the quarter with total debt of $2.7 billion and pro forma leverage of 5.9 times. We took two steps subsequent to quarter-end to strengthen our financial flexibility and lower our cost of capital. First, we entered into a new $300 million delayed draw term loan with our banks. The facility has a 12-month delayed draw period, a 01/30/2030 initial maturity, and comes with two 12-month extension options, providing us incremental optionality in future years. The delayed draw structure aligns well with our funding needs into 2027 including the Colorado development. Second, in connection with this financing, we amended the pricing grids on our existing bank loans to reduce the applicable margin by 5 basis points. We appreciate the continued commitments from our highly supportive bank group as we evaluate and navigate this highly volatile medium- and long-term rate backdrop. On the equity side, during the second quarter, we sold 2.2 million shares of common stock on a forward basis at a weighted average gross price of $20.77 per share. Subsequent to quarter end, we sold an additional 1.6 million shares at a weighted average gross price of $21.45 per share, bringing our total unsettled equity sales to approximately $163 million at a weighted average price of $19.97. We have approximately $197 million of capacity remaining under our existing ATM program, and we continue to evaluate forward sales to more closely match funding our capital with rent commencements from our build-to-suit pipeline. The combination of our new term loan, existing revolver capacity, and unsettled equity provide us with approximately $1 billion of in-place liquidity. Looking ahead, we will continue to assess all potential sources of funding, managing around a pro forma leverage target of 6x and optimally finding ourselves in a position to opportunistically reduce pro forma leverage inside of that level, creating additional capacity to pursue incremental investments as opportunities arise. Last week, our board of directors declared a quarterly dividend of $0.2925 per share payable to holders of record as of 09/30/2026, on or before October 15. Now turning to guidance updates that John alluded to. Given our strong year-to-date performance and accretive investment activity, we are raising our full year 2026 AFFO guidance to a range of $1.55 to $1.57 per diluted share. This guidance is based on investments in real estate of between $600 million and $800 million, revised up from $500 to $625 million; dispositions of between $100 million and $150 million, revised up from $75 million to $100 million; and finally, total core general and administrative expenses of between $30 million and $31 million. Additionally, we are lowering our full year bad debt assumption to 50 basis points from 75 basis points. This reduction is a direct reflection of the work we have done across the business over the last three years, which has improved our tenant base and strengthened our proactive asset management. As always, it is worth reminding everyone that our per-share results for the year are sensitive to the timing, amount, and mix of investment and disposition activity as well as any capital markets activities that may occur during the year. Please reference last night's earnings release for additional details. We will now open the call up for questions.
分析師問答
We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press one to raise your hand. To withdraw your question, press one again. We ask that you pick up your handset closer to your mouth when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Anthony Paolone from JPMorgan. Anthony, your line is open. Please go ahead.
Brent. Thank you. I guess my first question is on the Colorado data center deal. With the yield that high and given what seems like a really strong transaction, how do you think about keeping something like that long term, or is this something where this becomes a very attractive source of capital in the future?
Thanks, Tony. Great question. It is something that we talk about with every asset in our portfolio. Every asset that we look at in terms of our hold versus sell strategy, we evaluate what is the right decision to make. Should we be holding this for the long term? As you said, the yield on this is really attractive and the tenant is very attractive. This is a fantastic opportunity for us to have a Fortune 20 tenant as our number one tenant, which we will be very proud to have. But at the same time, every asset is for sale at some price. If it makes the most sense for us to recycle that capital at some point in the future, we are certainly open to it, but we will take that day by day, asset by asset.
Okay. And you have a partner on the deal, and I am not sure if there is any sort of a promote structure for them or how that would work. Can you maybe describe that at all, whether they stay in or out or if you own this 100% or if any sort of promote changes that yield as we look ahead?
Yeah. The promote structure would not change the yield in terms of what we are getting on current cash and rent basis. It is what it is, which is why we have those upfront yields for the first and second year in there. There is a promote structure built in. Our partner on the deal does have the ability to get some additional upside if we were to sell this in the future, but just like with the other joint ventures that we have, we do participate in the upside as well. So everyone's incentives are aligned in terms of whether we are staying in or potentially selling this in the future.
Your next question comes from the line of Jay Kornreich from Cantor Fitzgerald. Jay, your line is open. Please go ahead.
Hey. Thanks. Good morning. I guess, at a broader level, a previous goalpost for the annual announced build-to-suit developments was $350 million to $500 million. As the platform has gotten bigger and relationships with developers and tenants have expanded, really highlighted by the recent Colorado $303 million powered shell deal, how do you think about the next phase of growth for Broadstone Net Lease? What are the new goalposts for annual volume of announced deals as the overall platform is running on full cylinders at this point?
Yeah. The $350 to $500 million was the goal we had for the year and we certainly exceeded that with the Colorado deal. That being said, the Colorado deal is unique in its size and scope, so we are not expecting to continually land $100 million build-to-suit deals every single quarter. We do want the pipeline to grow over time as the denominator grows. We are not looking to be here five years from now still talking about $350 to $500 million in a committed build-to-suit pipeline. We want it to grow and expect it to grow incrementally year over year. That growth should be steady rather than a single large jump to $600 million to $1 billion. It will be more incremental from there.
Okay. Appreciate that. And then regarding Triboro, what is the current level of conviction of being able to get approval for a data center and any thoughts around the timeline to getting that?
We are cautiously optimistic. As Ryan mentioned, we are doing everything we can to work productively with the borough council. We feel strong in our by-right conviction around the opportunity for data center development at the site. We have multiple paths to extract value, and we are hopeful that we are closer now than earlier this year to getting some resolution. The next couple of months and quarters will determine that.
Your next question comes from the line of Caitlin Burrows from Goldman Sachs. Caitlin, your line is open. Please go ahead.
Hi, everyone. Congrats on the quarter. Looking at the amount of dispositions you have done, it is in line with guidance though not surprising. When you consider funding with dispositions versus your option of equity now, what made dispositions attractive? Was it just the pricing and the market, or managing risk? What drove that disposition activity, and what will drive the timing of the equity settlement?
I will take the first part on dispositions and let Kevin take the second. On dispositions, everything you said is correct: attractive pricing relative to our view of value and risk mitigation both play a role. We are not necessarily selling assets we are excited to hold long term; often they are noncore or have short remaining lease terms. Our asset management team has done a great job combing through the portfolio and finding opportunities to sell accretively. Selling $74 million at a 6.2% cap rate year-to-date is a strong place for us to be in terms of recycling capital.
Thankfully, we are in a place where our equity environment is far more constructive than it has been at any time in the last four years, and we have been raising incrementally on the ATM. Regarding settlement timing, we match funding to the build-to-suit delivery schedule where possible. We look to match fund in the quarters where those properties deliver. From a macro perspective and a granular project-by-project basis, we think about whether a disposition dollar or an ATM dollar makes the most sense for each project, and future settlement will align alongside rent commencements.
Got it. It sounds like you have two redevelopments going on now. Those are different from your build-to-suits in that you do not have a tenant in hand yet. What gives you comfort in those two pursuits? And looking into next year, with additional office expirations, do you think there is further opportunity to redevelop office into industrial, or are these more one-off opportunities?
When we comb the portfolio, we evaluate all assets, including office, for redevelopment opportunities. I would consider these more one-off, with a few others under evaluation. We have high conviction in the C.H. Robinson redevelopment in the O'Hare market. We are already fielding tenant interest in RFPs even before demolition started. The second property is under evaluation between a scrape-and-rebuild and a significant renovation. We feel good about the market and the gap between expiring rents and market rents. We will continue to market the property for lease or sale while we advance the redevelopment work and will weigh options as we do across the portfolio.
One more follow-up: on the C.H. Robinson location, you listed target stabilization as May 2027. Does that mean you expect someone to be rent paying by May 2027 or just that it will be completed and available by then?
That we will have rent paying by then.
Your next question comes from the line of Ryan Caviola from Green Street. Ryan, your line is now open. Go ahead.
Thank you, and good morning, everyone. The growth in the development pipeline has been very impressive. Going into 2026, there was a target to get a larger portion of investment volume through regular property acquisitions. Where do you stand today, given the large build-to-suit pipeline and the relatively small amount of regular acquisitions so far? Could you walk us through what shifted in 2026 that made developing more attractive than buying assets outright?
We actually started the year expecting the majority of our activity to come from build-to-suit. The opposite was true last year, when most investment activity came through regular-way acquisitions, sale-leasebacks, and lease assumptions. We knew entering 2026 that the majority of activity would be build-to-suit, and the year has played out as expected. Regular-way deal flow remains competitive and limited; we continue to pursue attractive opportunities but are very selective. If given one dollar to allocate, we would put it in build-to-suit where we can get brand-new buildings, strong tenant credits, and better overall economics.
Got it. Appreciate that. On the Colorado deal, the language around labeling it an advanced technology facility seemed purposeful. Can you walk us through any reasoning behind that and if there are differences between that label and a traditional data center?
Yes. The terminology we use is intentional relative to what the tenant is using it for. This will look and feel like a data center for others, but for this particular tenant and what they are planning, this is how they think about the facility, and we reflect that in our description.
Your next question comes from the line of Ronald Kamdem from Morgan Stanley. Ronald, your line is now open. Please go ahead.
Hey. Good morning. This is Jenny on for Ronald. Congrats on the strong quarter. On the Colorado deal, the yield came in really attractive. Do you see more competition or more capital chasing these kinds of deals, or do you think this is repeatable?
This came out of the strength of our developer relationships. I do not think this is broadly marketed at yields people can get elsewhere. However, anything data center-related currently has significant capital chasing it. We feel fortunate to have the relationships that allowed us to secure this opportunity.
Cool. My second question: do you have a right of first refusal (ROFR) for other campuses of this tenant, or just this one?
Just this site. We already own the site, and the ROFR pertains to the potential opportunity for this tenant on another facility on this site. If they execute on their ROFR, it would be on the other side of the access road from us.
Your next question comes from the line of Upal Rana from KeyBanc Capital Markets. Upal, your line is now open. Go ahead.
Thank you. You have completed only one regular acquisition so far this year. Is that a function of seeing better opportunities in the build-to-suit pipeline or something else? Can you talk about what you are seeing in build-to-suit today versus regular acquisitions in terms of deal size, pricing, and quality?
We view the build-to-suit pipeline as the best place to allocate capital: brand-new buildings, fantastic tenant credits, and better economics. Our in-process pipeline metrics — $645 million of estimated project investment at a 7.9% upfront cap rate and a 9.9% straight-line yield — are not things you commonly find in the regular market today. Regular-way markets remain heavily competitive with many buyers, which puts pressure on pricing and often results in dated real estate or weaker credit. We remain open and selective on regular-way deals, but if you give us a new dollar today, build-to-suit is our priority.
You incurred a $1.6 million cost this quarter on a build-to-suit option you ultimately did not pursue. What caused you to walk away, and should we expect more of these pursuit costs as the development platform scales?
That number is a deposit and some legal costs associated with the deal we walked away from. It was really an embedded option on the deal we did complete. In terms of anticipating these in the future, there may be some, but we do not know when or what they will be. These options get us to the table on interesting opportunities, and we will pursue and finish them when it makes sense, and we will opt out when it does not.
Your next question comes from the line of John Kim from BMO Capital Markets. John, your line is now open. Please go ahead.
Thank you. It sounds like you're doing more speculative development or redevelopment, which is consistent with the value creation you've been doing on BTS as spread investing. How do you think about IRR thresholds or yields on non-build-to-suit development versus redevelopments? Any additional costs to consider, such as hiring more people in-house?
When opportunities have an earlier entry point or less tenant certainty — which is not the predominant focus for us — we look for typical institutional private equity-type returns. That would be levered IRRs in the 20% plus range and MOIC somewhere around two times, and yield-on-cost versus stabilized value spread deltas in the 150 basis point range. We evaluate personnel needs project by project, and while we continue to build in-house capability, we also rely on strong external developer relationships.
On the Colorado development, given the attractive yield and tenant quality, are there any associated risks such as material future CapEx requirements that could make it difficult to release the asset in the future?
No material CapEx is expected beyond what we disclosed. Our yields are baked into the $303 million and we are not anticipating changes. This is not a manufacturing facility; it is an advanced technology facility that, for most purposes, would be data center or data center-adjacent. It represents strong yields and excellent tenant credit with a 15-year lease, so we have no long-term concerns regarding the lease structure.
Your next question comes from the line of Michael Goldsmith from UBS. Michael, your line is now open. Please go ahead.
Good morning. On these data center leases, if you do not meet the development guidelines, like delivery deadlines, how do the economics change? Trying to understand the risk here.
There are typically cushions built into lease agreements. If there is a time delay beyond those cushions, there are rent credits or abatements until rent actually starts. That doesn't change the yield profile or the overall lease economics; it primarily affects timing of rent commencement and may include operating expense abatements during the delay. Of course, that excludes force majeure and similar events. It's not dissimilar to an industrial build-to-suit, just larger in scale.
Got it. As a follow-up, you sold a bunch of vacant assets in the quarter and you have some near-term lease expirations. What are negotiations like on the near-term maturities and expirations — have they been productive or could these be additional vacant disposals?
Very productive. For the roughly 1.9% of ABR that remains for the year, almost all has been addressed in terms of discussions and documentation. The team has done a fantastic job handling lease rolls, and we are focusing on forward-looking lease activity into 2027 and 2028. We are in a good position for the remainder of 2026 and beyond.
If I can ask one more: you had same-store rental revenue growth of 2.2% with industrial and retail positive but 'other' down 1.6%. What drove that negative contribution?
That was the C.H. Robinson asset that we began redeveloping. It was formerly an office asset and is now in redevelopment, so the rent rolled off as we transitioned it.
Your next question comes from the line of Michael Gorman from BTIG. Michael, your line is now open. Please go ahead.
Good morning. This is Zach Light on for Mike Gorman. With the delayed draw term loan in place, what is the thought process regarding the financing structure for larger assets like the Colorado project and the portfolio? Longer term, as you continue to see additional large opportunities, what is the framework for approaching those financing components?
We manage the business holistically and think about large projects in the context of our overall sources of capital and 12 to 14 months of forward visibility. The delayed draw term loan aligns with the back-end weighted profile of Colorado. Principles remain consistent: granular thinking on the mix of debt and equity, types of debt, and maintaining financial flexibility for opportunistic decision making. The term loan helps, and we will continue to evaluate longer-term financing decisions as projects progress.
Your next question comes from the line of Eric Borden from BMO Capital Markets. Eric, your line is now open. Please go ahead.
Thanks for taking my question. John, you mentioned that adding incremental build-to-suit pipeline in Colorado and Project Triboro could open the door to more powered land or data center-esque developments. Have you seen more inbound opportunities for powered land or similar projects since those announcements?
We look at those opportunities, but they are not pervasive like industrial or retail inbound interest. These tend to be more unique, one-off opportunities. If such opportunities come to our door and make sense under our underwriting and financing framework, we would evaluate adding them to the pipeline, but the approach requires more nuanced consideration for longer-term financing and potential joint ventures due to larger size.
If more of these opportunities come, would you contemplate adding them to the pipeline to help maintain the roughly 10% growth you discussed from committed pipeline coming online?
Yes, we are open to it. We are pleased with what we have today and are seeing good movement in industrial and retail build-to-suit deals that can fill in around larger opportunities like Colorado. We will evaluate additional powered-land opportunities if they make sense for Broadstone and our capital structure.
Your final question comes from Caitlin Burrows of Goldman Sachs. Caitlin, your line is open. Go ahead.
Hi again. Any updates on the Charles River project and the planned industrial development and leasing discussions?
On the Charles River site, we have progressed to the point of separating the two parcels and beginning landlord work to put in individualized infrastructure for the long-term parcel. We continue to manage the short-term parcel and are receiving inbound interest. We have started external leasing dialogue, are working through site plans and redevelopment considerations, and are in the early innings but on track with the initial work planned for this point in the year.
There are no further questions at this time. I will now turn the call back to John D. Moragne for closing remarks.
Thanks all for joining us today. If we do not see you or have a one-on-one with you over the next couple of weeks, hope you have a great rest of the summer, and we will look forward to seeing everyone when conference season kicks back up again in the fall. Thanks all.
This concludes today's call. Thank you for attending. You may now disconnect.