8-K - BNL - Equibles

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 03, 2021

BROADSTONE NET LEASE, INC.

(Exact name of Registrant as Specified in Its Charter)

Maryland	001-39529	26-1516177
(State or Other Jurisdiction<br>of Incorporation)	(Commission File Number)	(IRS Employer<br>Identification No.)
800 Clinton Square
Rochester, New York		14604
(Address of Principal Executive Offices)		(Zip Code)
Registrant’s Telephone Number, Including Area Code: 585 287-6500
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(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br>Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00025 par value	BNL	The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Item 2.02 Results of Operations and Financial Condition.

On August 2, 2021, Broadstone Net Lease, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Additionally, on August 2, 2021, the Company made available on its website an updated presentation containing quarterly supplemental information pertaining to its operations and financial results including the quarter ended June 30, 2021. A copy of the quarterly supplemental information is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The press release and quarterly supplemental information are also available on the Company’s website.

The information contained in this Item 2.02, including the information contained in the press release attached as Exhibit 99.1 hereto and quarterly supplemental information attached as Exhibit 99.2 hereto, are being “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. References to the Company’s website in this Current Report on Form 8-K and in the attached Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K do not incorporate by reference the information on such website into this Current Report on Form 8-K and the Company disclaims any such incorporation by reference.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release dated August 3, 2021
99.2	Quarterly Supplemental Information for the Quarter Ended June 30, 2021
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			BROADSTONE NET LEASE, INC.
Date:	August 3, 2021	By:	/s/ John D. Moragne
			Name: John D. Moragne<br>Title: Executive Vice President, Chief Operating Officer, and Secretary

EX-99.1

EXHIBIT 99.1

For Immediate Release

August 3, 2021

Company Contact:<br><br>Michael Caruso<br><br>SVP, Corporate Finance & Investor Relations<br><br>michael.caruso@broadstone.com<br><br>585.402.7842

Broadstone Net Lease Announces Second Quarter 2021 Results

ROCHESTER, N.Y. – Broadstone Net Lease, Inc. (NYSE: BNL), an internally-managed real estate investment trust (“BNL,” the “Company,” “we,” “our,” or “us”), today announced its operating results for the quarter ended June 30, 2021.

SECOND QUARTER 2021 HIGHLIGHTS

- 2021 AFFO guidance range tightened to $1.30 to $1.34 per diluted share.

- Invested $194.0 million in 34 properties at a weighted average initial cash cap rate of 6.2% with an additional $34.2 million of acquisitions that have closed subsequent to quarter end. The acquisitions included properties in industrial, healthcare, and retail asset classes. As of the date of this release, we have an additional $210.6 million of properties under control.

- Collected 100% of base rents due for the second quarter.

- Occupancy remained consistent at 99.7%.

- Incurred $8.7 million of general and administrative expenses, inclusive of $1.0 million of stock-based compensation.

- Generated net income of $22.8 million, or $0.14 per share.

- Generated AFFO of $52.0 million, or $0.33 per share.

- Completed our first public follow-on equity offering, issuing 11.5 million common shares for net proceeds of $253.5 million.

- Ended the quarter with total outstanding debt of $1.5 billion, Net Debt of $1.4 billion and a Net Debt to Annualized Adjusted EBITDAre ratio of 4.76x.

- Declared a quarterly dividend on July 29, 2021, of $0.255 per share to shareholders of record as of September 30, 2021.

MANAGEMENT COMMENTARY

“BNL continued to execute on its acquisitions growth strategy while simultaneously strengthening its balance sheet all while continuing to enjoy the benefits of its market leading portfolio performance during the second quarter,” said Chris Czarnecki, BNL’s Chief Executive Officer. “As of the date of this release, we’ve either closed or have under control $526 million of accretive investments in a diverse set of properties for the year. We successfully executed our first public follow-on equity offering to delever our balance sheet and provide growth capital for the second half of the year. Finally, based on our acquisitions pipeline, we have increased our acquisitions guidance and tightened our expected AFFO guidance range for 2021.”

SUMMARIZED FINANCIAL RESULTS

	For the Three Months Ended
(in thousands, except per share data)	June 30, <br>2021		March 31, <br>2021
Revenues	$	84,759	$	82,698
Net income, including non-controlling interests	$	22,820	$	23,960
Net earnings per share	$	0.14	$	0.15
FFO	$	50,184	$	51,929
FFO per share	$	0.32	$	0.33
AFFO	$	52,024	$	49,410
AFFO per share	$	0.33	$	0.31
Diluted Weighted Average Shares Outstanding		157,430		156,724

FFO, AFFO, Net Debt, and Annualized Adjusted EBITDAre are measures that are not calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See the Reconciliation of Non-GAAP Measures later in this press release.

REAL ESTATE PORTFOLIO UPDATE

As of June 30, 2021, we owned a diversified portfolio of 684 individual net leased commercial properties with 683 properties located in 42 U.S. states and one property located in British Columbia, Canada, and comprising approximately 30.2 million rentable square feet of operational space. As of June 30, 2021, all but six of our properties were subject to a lease, and our properties were occupied by 192 different commercial tenants, with no single tenant accounting for more than 2.3% of ABR. Properties under leases represent 99.7% of our portfolio’s rentable square footage. The ABR weighted average annual minimum rent increases, pursuant to leases on properties in the portfolio as of June 30, 2021, was 2.0%.

During the second quarter, we invested $194.0 million, excluding capitalized acquisition costs, in 34 properties at a weighted average initial cash cap rate of 6.2%. The acquisitions included properties in industrial (57%, based on ABR), healthcare (24%), and retail (19%) asset classes located across 16 states with a weighted average initial lease term and minimum annual rent increases of 13.2 years and 1.4%, respectively. BNL continues to build and evaluate a robust pipeline of potential investment opportunities predominantly focused on industrial, healthcare, quick-service restaurant, and select retail property sectors. Subsequent to quarter end, we invested an additional $34.2, excluding capitalized acquisition costs, in seven properties in the industrial and retail asset classes at a weighted average initial capitalization rate of 6.9%. BNL currently has $210.6 million of properties under control which we define as under contract or executed letter of intent.

During the second quarter, we sold 11 properties for net proceeds of $21.0 million, recognizing a gain over carrying value and original purchase price of $3.8 million and $2.6 million, respectively. The weighted average capitalization rate realized on the tenanted properties was 6.4%.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITIES

On June 28, 2021, we successfully closed our first public follow-on equity offering, issuing 11.5 million common shares at a price to the public of $23.00 per share, including shares issued pursuant to the underwriters' full exercise of their over-allotment option, less underwriting discounts and commissions, for net proceeds of $253.5 million. We used the proceeds to immediately pay down all outstanding borrowings under our $900 million revolving credit facility, and intend to use the remaining proceeds to fund potential acquisition opportunities and for other general corporate and working capital purposes.

As of June 30, 2021, our Net Debt was approximately $1.4 billion, providing a Net Debt to Annualized Adjusted EBITDAre ratio of 4.76x. We intend to maintain a leverage target of less than 6.0x on a Net Debt to Annualized Adjusted EBITDAre basis.

DISTRIBUTIONS

At its July 29, 2021 meeting, our board of directors declared a $0.255 distribution per common share and OP Unit to stockholders and OP Unit holders of record as of September 30, 2021, payable on or before October 15, 2021.

2021 GUIDANCE

The Company has narrowed its guidance range for the 2021 full year and currently expects to report AFFO of between $1.30 and $1.34 per diluted share based on the following key assumptions:

(i) investments in real estate properties between $550 million and $650 million, which has been revised higher;

(ii) dispositions of real estate properties between $50 million and $100 million, which is unchanged; and

(iii) total cash general and administrative expenses between $32 million and $34 million, which has been revised lower.

AFFO per share is sensitive to the timing and amount of real estate acquisitions, property dispositions, and capital markets activities during the year.

CONFERENCE CALL AND WEBCAST

The company will host its second quarter earnings conference call and audio webcast on Wednesday, August 4, 2021, at 1:30 p.m. Eastern Time.

To access the live webcast, which will be available in listen-only mode, please visit: https://services.choruscall.com/links/bnl210804.html. If you prefer to listen via phone, please dial: 1-888-349-0109 and request to join the Broadstone Net Lease, Inc. call. International callers may dial 1-412-542-4109, and Canadian participants may dial 1-855-669-9657.

A replay of the conference call webcast will be available approximately one hour after the conclusion of the live broadcast. To listen to a replay of the call, please visit: https://investors.bnl.broadstone.com.

About Broadstone Net Lease, Inc.

BNL is an internally-managed REIT that acquires, owns, and manages primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. The Company utilizes an investment strategy underpinned by strong fundamental credit analysis and prudent real estate underwriting. As of June 30, 2021, BNL’s diversified portfolio consisted of 684 individual net leased commercial properties with 683 properties located in 42 U.S. states and one property located in Canada across the industrial, healthcare, restaurant, retail, and office property types.

Forward-Looking Statements

This press release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies, and prospects, both business and financial. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “intend,” “anticipate,” “estimate,” “would be,” “believe,” “continue,” or other similar words. Forward-looking statements,

including our 2021 guidance, involve known and unknown risks and uncertainties, which may cause BNL’s actual future results to differ materially from expected results, including, without limitation, risks and uncertainties related to the COVID-19 pandemic and its related impacts on us and our tenants, general economic conditions, local real estate conditions, tenant financial health, property acquisitions, and the timing and uncertainty of completing these acquisitions, and uncertainties regarding future distributions to our stockholders. These and other risks, assumptions, and uncertainties are described in Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 25, 2021, which you are encouraged to read, and is available on the SEC’s website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company assumes no obligation to, and does not currently intend to, update any forward-looking statements after the date of this press release, whether as a result of new information, future events, changes in assumptions or otherwise.

Notice Regarding Non-GAAP Financial Measures

In addition to our reported results and net earnings per diluted share, which are financial measures presented in accordance with GAAP, this press release contains and may refer to certain non-GAAP financial measures, including Funds from Operations, or FFO, Adjusted Funds from Operations, or AFFO, Net Debt, and Net Debt to Annualized Adjusted EBITDAre. We believe the use of FFO and AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure, and should be considered in addition to, and not in lieu of, GAAP financial measures. We believe presenting Net Debt to Annualized Adjusted EBITDAre is useful to investors because it provides information about gross debt less cash and cash equivalents, which could be used to repay debt, compared to our performance as measured using Annualized Adjusted EBITDAre. You should not consider our Annualized Adjusted EBITDAre as an alternative to net income or cash flows from operating activities determined in accordance with GAAP. A reconciliation of non-GAAP measures to the most directly comparable GAAP financial measure and statements of why management believes these measures are useful to investors are included below.

Broadstone Net Lease, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except per share amounts)

			December 31,<br>2020
Assets
Accounted for using the operating method, net of accumulated depreciation	3,534,884		$	3,354,511
Accounted for using the direct financing method	28,911			29,066
Accounted for using the sales type method	566			567
Investment in rental property, net	3,564,361			3,384,144
Cash and cash equivalents	78,987			100,486
Accrued rental income	109,278			102,117
Tenant and other receivables, net	618			1,604
Prepaid expenses and other assets	18,846			22,277
Goodwill	339,769			339,769
Intangible lease assets, net	296,134			290,913
Debt issuance costs – unsecured revolving credit facility, net	5,250			6,435
Leasing fees, net	10,368			10,738
Total assets	4,423,611		$	4,258,483
Liabilities and equity
Unsecured revolving credit facility	—		$	—
Mortgages, net	105,748			107,382
Unsecured term notes, net	1,383,631			1,433,796
Interest rate swap, liabilities	46,335			72,103
Earnout liability	10,063			7,509
Accounts payable and other liabilities	75,463			74,936
Accrued interest payable	3,885			4,023
Intangible lease liabilities, net	74,978			79,653
Total liabilities	1,700,103			1,779,402
Commitments and contingencies
Equity
Broadstone Net Lease, Inc. stockholders' 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, 158,583 shares issued and outstanding at June 30, 2021; 440,000 shares authorized, 108,609 shares issued and outstanding at December 31, 2020	40			27
Class A common stock, 0.00025 par value; no shares authorized, issued or outstanding at June 30, 2021; 60,000 shares authorized, 37,000 shares issued and outstanding at December 31, 2020	—			9
Additional paid-in capital	2,890,131			2,624,997
Cumulative distributions in excess of retained earnings	(293,622	)		(259,673	)
Accumulated other comprehensive (loss) income	(41,896	)		(66,255	)
Total Broadstone Net Lease, Inc. stockholders’ equity	2,554,653			2,299,105
Non-controlling interests	168,855			179,976
Total equity	2,723,508			2,479,081
Total liabilities and equity	4,423,611		$	4,258,483

All values are in US Dollars.

Broadstone Net Lease, Inc. and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share amounts)

	(Unaudited)<br>For the Three Months Ended						(Unaudited)<br>For the Six Months Ended
	June 30, <br>2021			March 31, <br>2021			June 30, <br>2021			June 30, <br>2020
Revenues
Lease revenues, net	$	84,759		$	82,698		$	167,457		$	158,602
Operating expenses
Depreciation and amortization		31,225			30,713			61,938			71,140
Asset management fees		—			—			—			2,461
Property management fees		—			—			—			1,275
Property and operating expense		4,572			4,605			9,177			8,305
General and administrative		8,655			10,633			19,288			11,542
Provision for impairment of investment in rental properties		-			2,012			2,012			2,667
Total operating expenses		44,452			47,963			92,415			97,390
Other income (expenses)
Interest income		6			5			11			20
Interest expense		(15,430	)		(16,108	)		(31,538	)		(40,504	)
Cost of debt extinguishment		—			(126	)		(126	)		(22	)
Gain on sale of real estate		3,838			4,733			8,571			8,665
Income taxes		(301	)		(413	)		(714	)		(951	)
Internalization expenses		—			—			—			(1,594	)
Change in fair value of earnout liability		(5,604	)		1,124			(4,480	)		2,144
Other income		4			10			14			(24	)
Net income		22,820			23,960			46,780			28,946
Net income attributable to non-controlling interests		(1,606	)		(1,737	)		(3,343	)		(2,777	)
Net income attributable to Broadstone Net Lease, Inc.	$	21,214		$	22,223		$	43,437		$	26,169
Weighted average number of common shares outstanding
Basic		146,119			145,338			145,728			106,765
Diluted		157,430			156,724			157,115			117,929
Net earnings per common share
Basic and diluted	$	0.14		$	0.15		$	0.30		$	0.25
Comprehensive income
Net income	$	22,820		$	23,960		$	46,780		$	28,946
Other comprehensive income
Change in fair value of interest rate swaps		(2,911	)		28,680			25,769			(64,118	)
Realized gain on interest rate swaps		(42	)		(41	)		(83	)		(83	)
Comprehensive income		19,867			52,599			72,466			(35,255	)
Comprehensive income attributable to non-controlling interests		(1,399	)		(3,813	)		(5,212	)		2,897
Comprehensive income attributable to Broadstone Net Lease, Inc.	$	18,468		$	48,786		$	67,254		$	(32,358	)

Reconciliation of Non-GAAP Measures

The following is a reconciliation of net income to FFO and AFFO for the three months ended June 30, 2021 and March 31, 2021. Also presented is the weighted average number of shares of our common stock and OP units used for the diluted per share computation:

	For the Three Months Ended						For the Six Months Ended
(in thousands, except per share data)	June 30, <br>2021			March 31, <br>2021			June 30, <br>2021			June 30, <br>2020
Net income	$	22,820		$	23,960		$	46,780		$	28,946
Real property depreciation and amortization		31,202			30,690			61,892			71,109
Gain on sale of real estate		(3,838	)		(4,733	)		(8,571	)		(8,665	)
Provision for impairment on investment in rental properties		—			2,012			2,012			2,667
FFO	$	50,184		$	51,929		$	102,113		$	94,057
Straight-line rent adjustment		(4,979	)		(4,632	)		(9,611	)		(7,763	)
Adjustment to provision for credit losses		—			(1	)		(1	)		(127	)
Cost of debt extinguishment		—			126			126			22
Amortization of debt issuance costs		956			914			1,870			1,709
Amortization of net mortgage premiums		(37	)		(35	)		(72	)		(72	)
Gain on interest rate swaps and other non-cash interest expense		(42	)		(41	)		(83	)		(83	)
Amortization of lease intangibles		(641	)		(728	)		(1,369	)		(119	)
Internalization expenses		—			—			—			1,594
Stock-based compensation		951			1,769			2,720			—
Severance		32			1,243			1,275			26
Change in fair value of earnout liability		5,604			(1,124	)		4,480			(2,144	)
Other income		(4	)		(10	)		(14	)		24
AFFO	$	52,024		$	49,410		$	101,434		$	87,124
Diluted WASO(1)		157,430			156,724			157,115			117,929
Net earnings per share(2)	$	0.14		$	0.15		$	0.30		$	0.25
FFO per share(2)		0.32			0.33			0.65			0.80
AFFO per share(2)		0.33			0.31			0.64			0.74

1 Excludes 387 and 361 weighted average shares of unvested restricted common stock for the three and six months ended June 30, 2021, respectively, and excludes 334 weighted average shares of unvested restricted common stock for the three months ended March 31, 2021.

2 Excludes $97 and $201 from the numerator for the three and six months ended June 30, 2021, respectively, and $104 from the three months ended March 31, 2021, related to dividends paid or declared on shares of unvested restricted common stock.

Our reported results and net earnings per diluted share are presented in accordance with GAAP. We also disclose FFO and AFFO, each of which are non-GAAP measures. We believe the use of FFO and AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.

We compute FFO in accordance with the standards established by the Board of Governors of Nareit, the worldwide representative voice for REITs and publicly traded real estate companies with an interest in the U.S. real estate and capital markets. Nareit defines FFO as GAAP net income or loss adjusted to exclude net gains (losses) from sales of certain depreciated real estate assets, depreciation and amortization expense from real estate assets, gains and losses from change in control, and impairment charges related to certain previously depreciated real estate assets. To derive AFFO, we modify the Nareit computation of FFO to include other adjustments to GAAP net income related to certain non-cash and non-recurring revenues and expenses, including straight-line rents, the change in fair value of our earnout liability, cost of debt extinguishments, amortization of lease intangibles, amortization of debt issuance costs, amortization of net mortgage premiums, (gain) loss on interest rate swaps and other non-cash interest expense, realized gains or losses on foreign currency transactions, internalization expenses, stock-based compensation, severance, extraordinary items, and other specified non-cash items. We believe excluding such items assists management and investors in distinguishing whether changes in our operations are due to growth or decline of operations at our properties or from other factors.

Our leases include cash rents that increase over the term of the lease to compensate us for anticipated increases in market rental rates over time. Our leases do not include significant front-loading or back-loading of payments, or significant rent-free periods. Therefore, we find it useful to evaluate rent on a contractual basis as it allows for comparison of existing rental rates to market rental rates. In situations where we granted short-term rent deferrals as a result of the COVID-19 pandemic, and such deferrals were probable of collection and expected to be repaid within a short term, we continued to recognize the same amount of GAAP lease revenues each period. Consistent with GAAP lease revenues, the short-term deferrals associated with COVID-19 did not impact our AFFO.

We further exclude the change in fair value of our earnout liability, costs or gains recorded on the extinguishment of debt, non-cash interest expense and gains, the amortization of debt issuance costs, net mortgage premiums, and lease intangibles, realized gains and losses on foreign currency transactions, internalization expenses, stock-based compensation and severance, as these items are not indicative of ongoing operational results. We use AFFO as a measure of our performance when we formulate corporate goals.

FFO is used by management, investors, and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers, primarily because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is a useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by non-cash revenues or expenses. FFO and AFFO may not be comparable to similarly titled measures employed by other REITs, and comparisons of our FFO and AFFO with the same or similar measures disclosed by other REITs may not be meaningful.

Neither the SEC nor any other regulatory body has passed judgment on the acceptability of the adjustments to FFO that we use to calculate AFFO. In the future, the SEC, Nareit or another regulatory body may decide to standardize the allowable adjustments across the REIT industry and, in response to such standardization, we may have to adjust our calculation and characterization of AFFO accordingly.

The following is a reconciliation of net income to Annualized Adjusted EBITDAre, debt to Net Debt and Net Debt to Annualized Adjusted EBITDAre as of and for the three months ended June 30, 2021 and March 31, 2021:

	For the Three Months Ended
(in thousands)	June 30, <br>2021			March 31, <br>2021
Net income	$	22,820		$	23,960
Depreciation and amortization		31,225			30,713
Interest expense		15,430			16,108
Income taxes		301			413
EBITDA	$	69,776		$	71,194
Provision for impairment of investment in rental properties		—			2,012
Gain on sale of real estate		(3,838	)		(4,733	)
EBITDAre	$	65,938		$	68,473
Adjustment for current quarter acquisition activity (1)		2,761			1,365
Adjustment for current quarter disposition activity (2)		(353	)		(278	)
Adjustment to exclude non-recurring and other expenses (income) (3)		—			2,100
Adjustment to exclude change in fair value of earnout liability		5,604			(1,124	)
Adjustment to exclude write-off of accrued rental income		—			442
Adjustment to exclude cost of debt extinguishments		—			126
Adjusted EBITDAre	$	73,950		$	71,104
Annualized EBITDAre	$	263,761		$	273,888
Annualized Adjusted EBITDAre	$	295,808		$	284,414

1 Reflects an adjustment to give effect to all acquisitions during the quarter as if they had been acquired as of the beginning of the quarter.

2 Reflects an adjustment to give effect to all dispositions during the quarter as if they had been sold as of the beginning of the quarter.

3 Amounts include $1.2 million of severance and $0.9 million of accelerated stock-based compensation associated with the departure of executive officers during the three months ended March 31, 2021.

(in thousands)	June 30, <br>2021			March 31, <br>2021
Debt
Revolving Credit Facility	$	—		$	15,000
Unsecured term notes, net		1,383,631			1,383,283
Mortgages, net		105,748			106,559
Debt issuance costs		6,625			6,988
Gross Debt		1,496,004			1,511,830
Cash and cash equivalents		(78,987	)		(10,205	)
Restricted cash		(8,021	)		(8,145	)
Net Debt	$	1,408,996		$	1,493,480
Net Debt to Annualized EBITDAre	5.34x			5.45x
Net Debt to Annualized Adjusted EBITDAre	4.76x			5.25x

We define Net Debt as gross debt (total reported debt plus deferred financing costs) less cash and cash equivalents and restricted cash. We believe that the presentation of Net Debt to Annualized EBITDAre and Net Debt to Annualized Adjusted EBITDAre is useful to investors and analysts because these ratios provide information about gross debt less cash and cash equivalents, which could be used to repay debt, compared to our performance as measured using EBITDAre.

We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. EBITDA is a measure commonly used in our industry. We believe that this ratio provides investors and analysts with a measure of our performance that includes our operating results unaffected by the differences in capital structures, capital investment cycles and useful life of related assets compared to other companies in our industry. We compute EBITDAre in accordance with the definition adopted by Nareit, as EBITDA excluding gains (loss) from the sales of depreciable property and provisions for impairment on investment in real estate. We believe EBITDA and EBITDAre are useful to investors and analysts because they provide important supplemental information about our operating performance exclusive of certain non-cash and other costs. EBITDA and EBITDAre are not measures of financial performance under GAAP, and our EBITDA and EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider our EBITDA and EBITDAre as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

We are focused on a disciplined and targeted acquisition strategy, together with active asset management that includes selective sales of properties. We manage our leverage profile using a ratio of Net Debt to Annualized Adjusted EBITDAre, discussed further below, which we believe is a useful measure of our ability to repay debt and a relative measure of leverage, and is used in communications with our lenders and rating agencies regarding our credit rating. As we fund new acquisitions using our unsecured Revolving Credit Facility, our leverage profile and Net Debt will be immediately impacted by current quarter acquisitions. However, the full benefit of EBITDAre from newly acquired properties will not be received in the same quarter in which the properties are acquired. Additionally, EBITDAre for the quarter includes amounts generated by properties that have been sold during the quarter. Accordingly, the variability in EBITDAre caused by the timing of our acquisitions and dispositions can temporarily distort our leverage ratios. We adjust EBITDAre (“Adjusted EBITDAre”) for the most recently completed quarter (i) to recalculate as if all acquisitions and dispositions had occurred at the beginning of the quarter, (ii) to exclude certain GAAP income and expense amounts that are either non-cash, such as cost of debt extinguishments or the change in fair value of our earnout liability, or that we believe are one time, or unusual in nature because they relate to unique circumstances or transactions that had not previously occurred and which we do not anticipate occurring in the future, and (iii) to eliminate the impact of lease termination fees and other items, that are not a result of normal operations. We then annualize quarterly Adjusted EBITDAre by multiplying it by four (“Annualized Adjusted EBITDAre”). You should not unduly rely on this measure as it is based on assumptions and estimates that may prove to be inaccurate. Our actual reported EBITDAre for future periods may be significantly different from our Annualized Adjusted EBITDAre. Adjusted EBITDAre and Annualized Adjusted EBITDAre are not measurements of performance under GAAP, and our Adjusted EBITDAre and Annualized Adjusted EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider our Adjusted EBITDAre and Annualized Adjusted EBITDAre as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

EX-99.2

Exhibit 99.2

Q2 2021 QUARTERLY SUPPLEMENTAL INFORMATION Broadstone Net Lease, Inc. (NYSE: BNL) is a Real Estate Investment Trust (REIT) that acquires, owns, and manages single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. www.broadstone.com

Table of Contents

Section	Page
About the Data	3
Company Overview	4
Quarterly Financial Summary	5
Balance Sheet	6
Income Statement Summary	7
Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)	8
EBITDA, EBITDAre, and Other Non-GAAP Operating Measures	9
Lease Revenues Detail	10
Capital Structure	11
Equity Rollforward	12
Debt Outstanding	13
Net Debt Metrics	14
Covenants	14
Debt Maturities and Interest Rate Exposure	15
Acquisitions	16
Dispositions	16
Portfolio at a Glance: Key Metrics	17
Diversification: Tenants and Brands	18-19
Diversification: Property Type	20-21
Key Statistics by Property Type	22
Diversification: Tenant Industry	23
Diversification: Geography	24
Lease Expirations	25
Portfolio Occupancy	26
Definitions and Explanations	27-28

About the Data

This data and other information described herein are as of and for the three months ended June 30, 2021 unless otherwise indicated. Future performance may not be consistent with past performance and is subject to change and inherent risks and uncertainties. This information should be read in conjunction with Broadstone Net Lease, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, including the financial statements and the management's discussion and analysis of financial condition and results of operations sections.

Stock Split

All share and per share data as of June 30, 2020, contained herein, have been adjusted to reflect the four-for-one stock split that was effected on September 18, 2020.

Forward Looking Statements

Information set forth herein contains forward-looking statements, which reflect our current views regarding our business, financial performance, growth prospects and strategies, market opportunities, and market trends. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. All of the forward-looking statements herein are subject to various risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, performance, and achievements could differ materially from those expressed in or by the forward-looking statements and may be affected by a variety of risks and other factors. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to the COVID-19 pandemic and its related impacts on us and our tenants, general economic conditions, local real estate conditions, tenant financial health, and property acquisitions and the timing of these acquisitions. These and other risks, assumptions, and uncertainties are described in our filings with the SEC, which are available on the SEC’s website at www.sec.gov.

You are cautioned not to place undue reliance on any forward-looking statements included herein. All forward-looking statements are made as of the date of this document and the risk that actual results, performance, and achievements will differ materially from the expectations expressed or referenced herein will increase with the passage of time. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.

Company Overview

Broadstone Net Lease, Inc. (NYSE:BNL) (the “Company,” “BNL,” “us,” “our” and “we”) is an internally-managed REIT, formed as a Maryland corporation in 2007 that acquires, owns, and manages primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. Since our inception, we have selectively invested in real estate across the industrial, healthcare, restaurant, retail, and office property types. We target properties with credit-worthy tenants in industries characterized by positive business drivers and trends, where the properties are an integral part of the tenants’ businesses and there are opportunities to secure long-term net leases. Through long-term net leases, our tenants are able to retain operational control of their strategically important locations, while allocating their debt and equity capital to fund their core business operations rather than real estate ownership.

Executive Team<br><br>Christopher J. Czarnecki<br><br>Chief Executive Officer, President, and Director<br><br>Ryan M. Albano<br><br>Executive Vice President and Chief Financial Officer<br><br>John D. Moragne<br><br>Executive Vice President and Chief Operating Officer<br><br>John D. Callan, Jr<br><br>Senior Vice President and General Counsel<br><br>Michael B. Caruso<br><br>Senior Vice President, Corporate Finance & Investor Relations<br><br>Timothy D. Dieffenbacher<br><br>Senior Vice President, Chief Accounting Officer and Treasurer<br><br>Kristen Duckles<br><br>Senior Vice President, Chief Administrative Officer<br><br>Kevin M. Fennell<br><br>Senior Vice President, Capital Markets & Credit Risk<br><br>Laurier James Lessard, Jr.<br><br>Senior Vice President, Asset Management<br><br>Roderick A. Pickney<br><br>Senior Vice President, Acquisitions<br><br>Molly Kelly Wiegel<br><br>Senior Vice President, Human Resources<br><br>Andrea T. Wright<br><br>Senior Vice President, Property Management	Board of Directors<br><br>Laurie A. Hawkes<br><br>Chairman of the Board<br><br>Christopher J. Czarnecki<br><br>Chief Executive Officer and President<br><br>Denise Brooks-Williams<br><br>Michael A. Coke<br><br>David M. Jacobstein<br><br>Agha S. Khan<br><br>Shekar Narasimhan<br><br>Geoffrey H. Rosenberger<br><br>James H. Waters
Company Contact Information<br><br>Michael Caruso<br>SVP, Corporate Finance & Investor Relations<br><br>michael.caruso@broadstone.com<br><br>585-402-7842<br><br><br><br><br><br>Transfer Agent<br><br>Computershare Trust Company, N.A.<br><br>250 Royall Street<br><br>Canton, Massachusetts 02021<br><br>800-736-3001
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Executive Team Christopher J. Czarnecki Chief Executive Officer, President, and Director Ryan M. Albano Executive Vice President and Chief Financial Officer John D. Moragne Executive Vice President and Chief Operating Officer John D. Callan, Jr Senior Vice President and General Counsel Michael B. Caruso Senior Vice President, Corporate Finance & Investor Relations Timothy D. Dieffenbacher Senior Vice President, Chief Accounting Officer and Treasurer Kristen Duckles Senior Vice President, Chief Administrative Officer Kevin M. Fennell Senior Vice President, Capital Markets & Credit Risk Laurier James Lessard, Jr. Senior Vice President, Asset Management Roderick A. Pickney Senior Vice President, Acquisitions Molly Kelly Wiegel Senior Vice President, Human Resources Andrea T. Wright Senior Vice President, Property Management

Board of Directors Laurie A. Hawkes Chairman of the Board Christopher J. Czarnecki Chief Executive Officer and President Denise Brooks-Williams Michael A. Coke David M. Jacobstein Agha S. Khan Shekar Narasimhan Geoffrey H. Rosenberger James H. Waters

Company Contact Information Michael Caruso SVP, Corporate Finance & Investor Relations michael.caruso@broadstone.com 585-402-7842 Transfer Agent Computershare Trust Company, N.A. 250 Royall Street Canton, Massachusetts 02021 800-736-3001

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Quarterly Financial Summary

(unaudited, dollars in thousands, except per share data)

	Q2 2021			Q1 2021			Q4 2020			Q3 2020			Q2 2020
Financial Summary
Investment in rental property	$	3,954,597		$	3,794,850		$	3,734,121		$	3,666,961		$	3,690,679
Less accumulated depreciation		(390,236	)		(369,683	)		(349,977	)		(332,057	)		(312,934	)
Investment in rental property, net		3,564,361			3,425,167			3,384,144			3,334,904			3,377,745
Cash and cash equivalents		78,987			10,205			100,486			101,787			9,241
Restricted cash		8,021			8,145			10,242			7,200			601
Total assets		4,423,611			4,206,045			4,258,483			4,204,469			4,144,055
Mortgage and notes payable, net		105,748			106,559			107,382			108,752			109,512
Unsecured term notes, net and <br> revolver		1,383,631			1,398,283			1,433,796			1,433,495			1,921,392
Total liabilities		1,700,103			1,713,348			1,779,402			1,782,762			2,267,408
Total mezzanine equity		—			—			—			—			178,535
Total Broadstone Net Lease, Inc. <br> stockholders' equity		2,554,653			2,312,532			2,299,105			2,191,794			1,591,633
Total equity (book value)		2,723,508			2,492,697			2,479,081			2,421,707			1,698,112
Revenues		84,759			82,698			82,291			80,744			80,371
General and administrative - <br> other		7,704			8,864			8,039			6,418			5,700
Stock based compensation		951			1,769			1,193			796			—
General and administrative		8,655			10,633			9,232			7,214			5,700
Total operating expenses		44,452			47,963			46,078			57,496			50,345
Interest expense		15,430			16,108			17,123			18,511			19,513
Net income		22,820			23,960			17,619			9,711			17,098
Net earnings per common share,<br> diluted	$	0.14		$	0.15		$	0.11		$	0.08		$	0.14
FFO		50,184			51,929			44,198			54,726			56,485
FFO per share, diluted	$	0.32		$	0.33		$	0.28		$	0.44		$	0.47
AFFO		52,024			49,410			46,894			47,077			46,056
AFFO per share, diluted	$	0.33		$	0.31		$	0.30		$	0.38		$	0.38
Net cash provided by operating <br> activities		47,235			51,780			46,064			53,506			39,139
Net cash (used in) provided by <br> investing activities		(175,051	)		(67,661	)		(76,443	)		5,469			6,264
Net cash (used in) provided by <br> financing activities		196,474			(76,497	)		32,120			40,170			(132,273	)
Distributions declared		43,484			39,653			39,299			20,477			13,099
Distributions declared per diluted <br> share	$	0.255		$	0.250		$	0.250		$	0.135		$	0.110
Portfolio Metrics
Properties		684			661			641			628			633
Rentable square feet	30.2M			28.4M			28.2M			27.3M			27.4M
Occupancy		99.7	%		99.7	%		99.2	%		99.8	%		99.6	%
Weighted average remaining lease <br> term (years)		10.4			10.6			10.7			10.8			11.0

Balance Sheet

(unaudited, in thousands)

			March 31,<br>2021			December 31,<br>2020			September 30,<br>2020			June 30,<br>2020
Assets
Accounted for using the operating method, net of accumulated depreciation	3,534,884		$	3,395,609		$	3,354,511		$	3,304,002		$	3,346,792
Accounted for using the direct financing method	28,911			28,991			29,066			30,902			30,953
Accounted for using the sales type method	566			567			567			—			—
Investment in rental property, net	3,564,361			3,425,167			3,384,144			3,334,904			3,377,745
Cash and cash equivalents	78,987			10,205			100,486			101,787			9,241
Accrued rental income	109,278			105,674			102,117			97,517			90,545
Tenant and other receivables, net	618			1,022			1,604			3,957			5,045
Prepaid expenses and other assets	18,846			18,862			22,277			19,522			9,819
Interest rate swap, assets	—			239			—			—			—
Goodwill	339,769			339,769			339,769			339,769			339,769
Intangible lease assets, net	296,134			288,592			290,913			288,971			298,741
Debt issuance costs – unsecured revolving credit facility, net	5,250			5,842			6,435			7,027			1,782
Leasing fees, net	10,368			10,673			10,738			11,015			11,368
Total assets	4,423,611		$	4,206,045		$	4,258,483		$	4,204,469		$	4,144,055
Liabilities and equity
Unsecured revolving credit facility	—		$	15,000		$	—		$	—		$	248,300
Mortgages and notes payable, net	105,748			106,559			107,382			108,752			109,512
Unsecured term notes, net	1,383,631			1,383,283			1,433,796			1,433,495			1,673,092
Interest rate swap, liabilities	46,335			43,662			72,103			81,326			85,678
Earnout liability	10,063			6,385			7,509			13,177			37,975
Accounts payable and other liabilities	75,463			71,072			74,936			55,339			25,550
Accrued interest payable	3,885			9,896			4,023			9,453			4,144
Intangible lease liabilities, net	74,978			77,491			79,653			81,220			83,157
Total liabilities	1,700,103			1,713,348			1,779,402			1,782,762			2,267,408
Mezzanine equity
Common stock	—			—			—			—			66,376
Non-controlling interests	—			—			—			—			112,159
Total mezzanine equity	—			—			—			—			178,535
Equity
Broadstone Net Lease, Inc. stockholders' equity:
Preferred stock, 0.001 par value	—			—			—			—			—
Common stock, 0.00025 par value	40			36			27			27			26
Class A Common Stock, 0.00025 par value	—			—			9			8			—
Additional paid-in capital	2,890,131			2,625,320			2,624,997			2,506,008			1,899,751
Cumulative distributions in excess of retained earnings	(293,622	)		(274,140	)		(259,673	)		(239,520	)		(229,531	)
Accumulated other comprehensive income	(41,896	)		(38,684	)		(66,255	)		(74,729	)		(78,613	)
Total Broadstone Net Lease, Inc. stockholders’ equity	2,554,653			2,312,532			2,299,105			2,191,794			1,591,633
Non-controlling interests	168,855			180,165			179,976			229,913			106,479
Total equity	2,723,508			2,492,697			2,479,081			2,421,707			1,698,112
Total liabilities, mezzanine and equity	4,423,611		$	4,206,045		$	4,258,483		$	4,204,469		$	4,144,055

All values are in US Dollars.

Income Statement Summary

(unaudited, in thousands, except per share data)

	Three Months Ended
	June 30,<br>2021			March 31,<br>2021			December 31,<br>2020			September 30,<br>2020			June 30,<br>2020
Revenues
Lease revenues, net	$	84,759		$	82,698		$	82,291		$	80,744		$	80,371
Operating expenses
Depreciation and amortization		31,225			30,713			30,182			31,363			39,921
Property and operating <br> expense		4,572			4,605			4,986			4,187			4,190
General and administrative		8,655			10,633			9,232			7,214			5,700
Provision for impairment of <br> investment in rental <br> properties		—			2,012			1,678			14,732			534
Total operating expenses		44,452			47,963			46,078			57,496			50,345
Other income (expenses)
Interest income		6			5			4			—			11
Interest expense		(15,430	)		(16,108	)		(17,123	)		(18,511	)		(19,513	)
Cost of debt extinguishment		—			(126	)		(3	)		(392	)		—
Gain on sale of real estate		3,838			4,733			5,260			1,060			1,046
Income taxes		(301	)		(413	)		141			(129	)		(402	)
Internalization expenses		—			—			(182	)		(1,929	)		(389	)
Change in fair value of earnout <br> liability		(5,604	)		1,124			(6,706	)		6,362			6,321
Other income (expenses)		4			10			15			2			(2	)
Net income		22,820			23,960			17,619			9,711			17,098
Net income attributable to <br> non-controlling interests		(1,606	)		(1,737	)		(1,357	)		(961	)		(1,745	)
Net income attributable to <br> Broadstone Net Lease, Inc.	$	21,214		$	22,223		$	16,262		$	8,750		$	15,353
Weighted average number of common shares outstanding
Basic1		146,119			145,338			143,916			111,155			107,422
Diluted1		157,430			156,724			155,956			123,381			119,648
Net earnings per common share2
Basic and diluted	$	0.14		$	0.15		$	0.11		$	0.08		$	0.14

1 Excludes 387, 334, 341 and 216 weighted average shares of unvested restricted common stock for the three months ended June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively.

2 Excludes $97, $104, $85 and $46 from the numerator for the three months ended June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively, related to dividends declared on shares of unvested restricted common stock.

Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)

(unaudited, in thousands, except per share data)

	Three Months Ended
	June 30,<br>2021			March 31,<br>2021			December 31,<br>2020			September 30,<br>2020			June 30,<br>2020
Net income	$	22,820		$	23,960		$	17,619		$	9,711		$	17,098
Real property depreciation and <br> amortization		31,202			30,690			30,161			31,343			39,899
Gain on sale of real estate		(3,838	)		(4,733	)		(5,260	)		(1,060	)		(1,046	)
Provision for impairment of investment <br> in rental properties		—			2,012			1,678			14,732			534
FFO	$	50,184		$	51,929		$	44,198		$	54,726		$	56,485
Capital improvements / reserves		—			—			—			1,662			—
Straight-line rent adjustment		(4,979	)		(4,632	)		(5,125	)		(6,943	)		(6,151	)
Adjustment to provision for credit losses		—			(1	)		(6	)		(15	)		(110	)
Cost of debt extinguishment		—			126			3			392			—
Amortization of debt issuance costs		956			914			917			819			821
Amortization of net mortgage premiums		(37	)		(35	)		(36	)		(34	)		(37	)
Gain on interest rate swaps and other <br> non-cash interest expense		(42	)		(41	)		(41	)		(42	)		(41	)
Amortization of lease intangibles		(641	)		(728	)		(1,150	)		151			1,019
Internalization expenses		—			—			182			1,929			389
Stock-based compensation		951			1,769			1,193			796			—
Severance		32			1,243			68			—			—
Change in fair value of earnout liability		5,604			(1,124	)		6,706			(6,362	)		(6,321	)
Other (income) expenses		(4	)		(10	)		(15	)		(2	)		2
AFFO	$	52,024		$	49,410		$	46,894		$	47,077		$	46,056
Diluted weighted average shares <br> outstanding1		157,430			156,724			155,956			123,381			119,648
Net earnings per diluted share2	$	0.14		$	0.15		$	0.11		$	0.08		$	0.14
FFO per diluted share2		0.32			0.33			0.28			0.44			0.47
AFFO per diluted share2		0.33			0.31			0.30			0.38			0.38

EBITDA, EBITDAre, and Other-Non GAAP Operating Measures

(unaudited, in thousands)

	Three Months Ended
	June 30,<br>2021			March 31,<br>2021			December 31,<br>2020			September 30,<br>2020			June 30,<br>2020
Net income	$	22,820		$	23,960		$	17,619		$	9,711		$	17,098
Depreciation and amortization		31,225			30,713			30,182			31,363			39,921
Interest expense		15,430			16,108			17,123			18,511			19,513
Income taxes		301			413			(141	)		129			402
EBITDA	$	69,776		$	71,194		$	64,783		$	59,714		$	76,934
Provision for impairment of investment in <br> rental properties		—			2,012			1,678			14,732			534
Gain on sale of real estate		(3,838	)		(4,733	)		(5,260	)		(1,060	)		(1,046	)
EBITDAre	$	65,938		$	68,473		$	61,201		$	73,386		$	76,422
Adjustment for current quarter acquisition <br> activity 1		2,761			1,365			1,703			—			—
Adjustment for current quarter disposition <br> activity 2		(353	)		(278	)		(318	)		(78	)		(52	)
Adjustment to exclude non-recurring and other<br> expenses (income) 3		—			2,100			182			1,929			389
Adjustment to exclude change in fair value <br> of earnout liability		5,604			(1,124	)		6,706			(6,362	)		(6,321	)
Adjustment to exclude write-off of accrued <br> rental income		—			442			242			—			—
Adjustment to exclude cost of debt <br> extinguishments		—			126			—			392			—
Adjustment to exclude lease termination <br> fees		—			—			—			—			(276	)
Adjusted EBITDAre	$	73,950		$	71,104		$	69,716		$	69,267		$	70,162
General and administrative		8,650			10,632			9,219			7,214			5,700
Adjusted Net Operating Income ("NOI")	$	82,600		$	81,736		$	78,935		$	76,481		$	75,862
Straight-line rental revenue, net		(5,245	)		(4,762	)		(5,339	)		(6,947	)		(6,151	)
Other amortization and non-cash charges		(642	)		(737	)		(1,170	)		1,810			911
Adjusted Cash NOI	$	76,713		$	76,237		$	72,426		$	71,344		$	70,622
Annualized EBITDAre	$	263,761		$	273,888		$	244,805		$	293,544		$	305,688
Annualized Adjusted EBITDAre		295,808			284,414			278,867			277,068			280,648
Annualized Adjusted NOI		330,410			326,944			315,743			305,924			303,448
Annualized Adjusted Cash NOI		306,863			304,948			289,704			285,376			282,488

1 Reflects an adjustment to give effect to all acquisition during the quarter as if they had been acquired as of the beginning of the quarter.

2 Reflects an adjustment to give effect to all dispositions during the quarter as if they had been sold as of the beginning of the quarter.

3 Amounts include $1.2 million of severance and $0.9 million of accelerated stock-based compensation associated with the departure of executive officers during the three months ended March 31, 2021, and expenses directly associated with the Internalization in 2020.

Lease Revenues Detail

(unaudited, in thousands)

	Three Months Ended
	June 30,<br>2021			March 31,<br>2021			December 31,<br>2020			September 30,<br>2020		June 30,<br>2020
Contractual rental amounts billed for <br> operating leases	$	75,011		$	73,245		$	72,558		$	69,270	$	67,342
Adjustment to recognize contractual <br> operating lease billings on a straight-<br> line basis		4,724			4,367			4,256			6,768		8,276
Variable rental amounts earned		114			91			455			234		51
Earned income from direct financing <br> leases		728			730			756			757		855
Earned income from sales-type <br> leases		15			14			5			—		—
Operating expenses billed to tenants		4,196			4,388			4,389			3,389		4,335
Other income from real estate <br> transactions		28			5			(16	)		64		702
Adjustment to revenue recognized for <br> uncollectible rental amounts billed		(57	)		(142	)		(112	)		262		(1,190	)
Total Lease revenues, net	$	84,759		$	82,698		$	82,291		$	80,744	$	80,371

Capital Structure

(unaudited, in thousands, except per share data)

EQUITY
Shares of Common Stock		158,583
OP Units		10,482
Common Stock & OP Units		169,065
Price Per Share / Unit at June 30, 2021	$	23.41
IMPLIED EQUITY MARKET CAPITALIZATION	$	3,957,800
% of Total Capitalization		72.6	%
DEBT
Unsecured Revolving Credit Facility - 2023	$	—
Unsecured Term Loan Facilities		915,000
Unsecured Term Loan - 2022		60,000
Unsecured Term Loan - 2023		265,000
Unsecured Term Loan - 2024		190,000
Unsecured Term Loan - 2026		400,000
Senior Unsecured Notes		475,000
Senior Unsecured Notes - 2027		150,000
Senior Unsecured Notes - 2028		225,000
Senior Unsecured Notes - 2030		100,000
Mortgage Debt - Various		106,004
TOTAL DEBT	$	1,496,004
% of Total Capitalization		27.4	%
% of Total Capitalization Floating Rate Debt		1.7	%
% of Total Capitalization Fixed Rate Debt		25.7	%
ENTERPRISE VALUE
Total Capitalization	$	5,453,804
Less: Cash and Cash Equivalents		(78,987	)
Enterprise Value	$	5,374,817

Equity Rollforward

(unaudited, in thousands)


Balance, January 1, 2021	145,609		11,399		157,008
Q1 2021 board of directors fees	12		—		12
Q1 2021 stock-based compensation activity	154		—		154
Q1 2021 OP Unit conversions	38		(38	)	—
Balance, March 31, 2021	145,813		11,361		157,174
Q2 2021 board of directors fees	13		—		13
Q2 2021 stock-based compensation activity	(15	)	—		(15	)
Q2 2021 OP Unit conversions	1,127		(1,127	)	—
Q2 2021 Earnout tranche 1 issuance	145		248		393
Q2 2021 Public follow-on equity offering	11,500		—		11,500
Balance, June 30, 2021	158,583		10,482		169,065
Percentage ownership of OP at June 30, 2021	93.8	%	6.2	%	100	%

Subsequent to quarter-end, on July 14, 2021, the Company achieved a 40-day VWAP of $23.75, thereby triggering tranche 2 of the earnout and the issuance of 217 shares of common stock and 372 OP Units.

Debt Outstanding

(unaudited, in thousands)

	Outstanding Balance
	June 30,			December 31,
	2021			2020			Interest Rate	Maturity Date
Revolving Credit Facility	$	—		$	—		one-month LIBOR + 1.00%	Sep. 2023
2022 Unsecured Term Loan		60,000			60,000		one-month LIBOR + 1.00%	Feb. 2022
2023 Unsecured Term Loan		265,000			265,000		one-month LIBOR + 1.10%	Jan. 2023
2024 Unsecured Term Loan		190,000			190,000		one-month LIBOR + 1.00%	Jun. 2024
2026 Unsecured Term Loan		400,000			450,000		one-month LIBOR + 1.00%	Feb. 2026
Senior Notes
Series A		150,000			150,000		4.84%	Apr. 2027
Series B		225,000			225,000		5.09%	Jul. 2028
Series C		100,000			100,000		5.19%	Jul. 2030
		475,000			475,000
Total, unsecured debt		1,390,000			1,440,000
Debt issuance costs, net		(6,369	)		(6,204	)
Total unsecured debt, net	$	1,383,631		$	1,433,796
	Origination	Maturity
---	---	---	---	---	---	---	---	---	---
	Date	Date	Interest	June 30,			December 31,
Lender	(Month/Year)	(Month/Year)	Rate	2021			2020
Wilmington Trust National Association	Apr-19	Feb-28	4.92%	$	47,357		$	47,945
Wilmington Trust National Association	Jun-18	Aug-25	4.36%		19,753			19,947
PNC Bank	Oct-16	Nov-26	3.62%		17,297			17,498
Sun Life	Mar-12	Oct-21	5.13%		10,252			10,469
Aegon	Apr-12	Oct-23	6.38%		6,650			7,039
M&T Bank	Oct-17	Aug-21	one - month<br>LIBOR+3%		4,695			4,769
Total mortgages					106,004			107,667
Debt issuance costs, net					(256	)		(285	)
Mortgages, net				$	105,748		$	107,382
Year of Maturity	Revolving Credit Facility		Term Loans		Senior Notes		Mortgages		Total
---	---	---	---	---	---	---	---	---	---	---
2021	$	—	$	—	$	—	$	16,343	$	16,343
2022		—		60,000		—		2,907		62,907
2023		—		265,000		—		7,582		272,582
2024		—		190,000		—		2,260		192,260
2025		—		—		—		20,195		20,195
Thereafter		—		400,000		475,000		56,717		931,717
Total	$	—	$	915,000	$	475,000	$	106,004	$	1,496,004

Net Debt Metrics

(unaudited, in thousands)

	June 30,<br>2021			March 31,<br>2021			December 31,<br>2020			September 30,<br>2020			June 30,<br>2020
Debt
Revolving Credit Facility	$	—		$	15,000		$	—		$	—		$	248,300
Unsecured term notes, net		1,383,631			1,383,283			1,433,796			1,433,495			1,673,092
Mortgages and notes payable, net		105,748			106,559			107,382			108,752			109,512
Debt issuance costs		6,625			6,988			6,489			6,829			7,268
Gross Debt		1,496,004			1,511,830			1,547,667			1,549,076			2,038,172
Cash and cash equivalents		(78,987	)		(10,205	)		(100,486	)		(101,787	)		(9,241	)
Restricted cash		(8,021	)		(8,145	)		(10,242	)		(7,200	)		(601	)
Net Debt	$	1,408,996		$	1,493,480		$	1,436,939		$	1,440,089		$	2,028,330
Net Debt to Annualized EBITDAre	5.34x			5.45x			5.87x			4.91x			6.64x
Net Debt to Annualized Adjusted <br> EBITDAre	4.76x			5.25x			5.15x			5.20x			7.23x

Covenants

(unaudited)

The following is a summary of key financial covenants for the Company’s unsecured credit facility and unsecured term loans and senior notes. These calculations, which are not based on U.S. GAAP measurements, are presented to investors to show that as of June 30, 2021, the Company believes it is in compliance with the covenants.

Covenants	Required	Revolving Credit Facility and Unsecured Term Loans		Senior Notes
Leverage ratio	≤ 0.60 to 1.00		0.33		0.33
Secured indebtedness ratio	≤ 0.40 to 1.00		0.02		0.02
Unencumbered coverage ratio	≥ 1.75 to 1.00		7.63	Not Applicable
Fixed charge coverage ratio	≥ 1.50 to 1.00		4.06		4.06
Total unsecured indebtedness to total <br> unencumbered eligible property value	≤ 0.60 to 1.00		0.34		0.35
Dividends and other restricted payments	Only applicable in case of default	Not Applicable		Not Applicable

Debt Maturities and Interest Rate Exposure

(unaudited, dollars in millions)

Debt Maturities

The Company utilizes diversified sources of debt capital including unsecured bank debt, unsecured notes, and secured mortgages (where appropriate).

Interest Rate Exposure

The Company uses interest rate swaps, fixed-rate private placement notes, and fixed-rate mortgages to mitigate the impact of interest rate variability.

Interest rate exposure not inclusive of floating rate debt, as borrowings are short-term in nature.

Portfolio Activity

Acquisitions

(unaudited, square feet and dollars in thousands)

The following table summarizes the Company’s property acquisition activity during 2021.

Q1 2021
Property Type	Number of Properties		Square Feet ('000s)		Weighted Average Lease Term (years)		Acquisition Price ('000s)
Retail		24		178		16.3
Healthcare		4		51		11.5
Restaurant 1		—		—		16.8
Total Properties		28		229		15.3
Weighted average initial cash cap rate								%
Q2 2021
Property Type	Number of Properties		Square Feet ('000s)		Weighted Average Lease Term (years)		Acquisition Price ('000s)
Industrial		12		1,553		15.5
Healthcare		11		136		10.5
Retail		11		218		9.8
Total Properties		34		1,906		13.2
Weighted average initial cash cap rate								%

All values are in US Dollars.

1 Acquisition of additional land to an existing property.

Dispositions

(unaudited, square feet and dollars in thousands)

The following table summarizes the Company’s property disposition activity during 2021.

Q1 2021
Property Type	Number of Properties		Square Feet ('000s)		Acquisition Price ('000s)	Disposition Price ('000s)	Net Book Value ('000s)	Cash Cap Rate
Healthcare		5		31					7.4	%
Restaurant		3		14					6.4	%
Total Properties		8		45					7.0	%
Q2 2021
Property Type	Number of Properties		Square Feet ('000s)		Acquisition Price ('000s)	Disposition Price ('000s)	Net Book Value ('000s)	Cash Cap Rate
Restaurant		10		36					6.4	%
Healthcare		1		6				N/A			2
Total Properties		11		42					6.4	%	3

All values are in US Dollars.

2 Properties were vacant at the time of disposition.

3 Weighted average cash cap rate on tenanted properties sold.

Portfolio at a Glance: Key Metrics

Properties	684
States	42
Canada	1
Total Rentable Sq. Footage	30.2M
Tenants	192
Brands	179
Industries	55
Occupancy (based on SF)	99.7%
Top Ten Tenant Concentration	18.4%
Top Twenty Tenant Concentration	31.1%
Investment Grade (tenant/guarantor)	16.7%
Financial Reporting Coverage1	94.5%
Rent Coverage Ratio2	3.3x
Weighted Average Annual Rent Increases	2.0%
Weighted Average Remaining Lease Term	10.4 years

1 Includes 9.0% related to tenants not required to provide financial information under the terms of our lease, but whose financial statements are available publicly.

2 Represents rent coverage ratio for Restaurants property type only.

Diversification: Tenants & Brands

(unaudited)

Top 20 Tenants

Tenant	Property Type
Red Lobster Hospitality & Red Lobster <br> Restaurants LLC	Casual Dining	24	2.3	%	196	0.6	%
Jack's Family Restaurants LP	Quick Service Restaurants	43	2.2	%	147	0.5	%
Joseph T. Ryerson & Son, Inc	Distribution & Warehouse	11	2.0	%	1,537	5.1	%
Axcelis Technologies, Inc.	Flex and R&D	1	1.9	%	417	1.4	%
Hensley & Company	Distribution & Warehouse	3	1.8	%	577	1.9	%
BluePearl Holdings, LLC	Animal Health Services	13	1.7	%	160	0.5	%
Outback Steakhouse of Florida LLC	Casual Dining	22	1.7	%	140	0.5	%
Krispy Kreme Doughnut Corporation	Quick Service Restaurants/<br>Food Processing	27	1.6	%	156	0.5	%
Siemens Medical Solutions USA, Inc. <br> & Siemens Corporation	Manufacturing/Flex <br>and R&D	2	1.6	%	545	1.8	%
Big Tex Trailer Manufacturing, Inc.	Automotive/Distribution & <br>Warehouse/Manufacturing/ Corporate Headquarters	17	1.6	%	1,302	4.3	%
Total Top 10 Tenants		163	18.4	%	5,177	17.1	%
Nestle' Dreyer's Ice Cream Company	Cold Storage	1	1.4	%	310	1.0	%
Arkansas Surgical Hospital	Surgical	1	1.4	%	129	0.4	%
Nationwide Mutual Insurance <br> Company	Strategic Operations	2	1.4	%	407	1.3	%
Cascade Aerospace Inc.	Manufacturing	1	1.4	%	231	0.8	%
American Signature, Inc.	Home Furnishings	6	1.3	%	474	1.6	%
Tractor Supply Company	General Merchandise	15	1.2	%	300	1.0	%
Fresh Express Incorporated	Food Processing	1	1.2	%	335	1.1	%
Aventiv Technologies, LLC	Corporate Headquarters	1	1.2	%	154	0.5	%
Dollar General Corporation	General Merchandise	35	1.1	%	320	1.1	%
Centene Management Company, LLC	Strategic Operations	1	1.1	%	220	0.8	%
Total Top 20 Tenants		227	31.1	%	8,057	26.7	%

All values are in US Dollars.

Top 20 Brands

(unaudited)

Brand	Property Type
Red Lobster	Casual Dining	24	2.3	%	196	0.6	%
Jack's Family Restaurants	Quick Service Restaurants	43	2.2	%	147	0.5	%
Ryerson	Distribution & Warehouse	11	2.0	%	1,537	5.1	%
Axcelis	Flex and R&D	1	1.9	%	417	1.4	%
Hensley	Distribution & Warehouse	3	1.8	%	577	1.9	%
BluePearl Veterinary Partners	Animal Health Services	13	1.7	%	160	0.5	%
Bob Evans Farms	Casual Dining/Food <br>Processing	21	1.7	%	282	1.0	%
Krispy Kreme	Quick Service Restaurants/<br>Food Processing	27	1.6	%	156	0.5	%
Siemens	Manufacturing/Flex <br>and R&D	2	1.6	%	545	1.8	%
Big Tex Trailers	Automotive/Distribution & <br>Warehouse/Manufacturing/<br>Corporate Headquarters	17	1.6	%	1,302	4.3	%
Total Top 10 Brands		162	18.4	%	5,319	17.6	%
Wendy's	Quick Service Restaurants	31	1.5	%	88	0.3	%
Outback Steakhouse	Casual Dining	20	1.4	%	126	0.4	%
Nestle'	Cold Storage	1	1.4	%	310	1.0	%
Arkansas Surgical Hospital	Surgical	1	1.4	%	129	0.4	%
Nationwide Mutual Insurance Co.	Strategic Operations	2	1.4	%	407	1.3	%
Cascade Aerospace	Manufacturing	1	1.4	%	231	0.8	%
Value City Furniture	Home Furnishings	6	1.3	%	474	1.6	%
Taco Bell	Quick Service Restaurants	31	1.3	%	80	0.3	%
Tractor Supply Co.	General Merchandise	15	1.2	%	300	1.0	%
Chiquita	Food Processing	1	1.2	%	335	1.1	%
Total Top 20 Brands		271	31.9	%	7,799	25.8	%

All values are in US Dollars.

Diversification: Property Type

(unaudited, rent percentages based on ABR)

Diversification: Property Type (continued)

(unaudited)

Property Type
Industrial
Distribution & Warehouse	42	14.9	%	8,950	29.6	%
Manufacturing	56	13.6	%	7,732	25.6	%
Food Processing	14	5.9	%	2,132	7.1	%
Flex and R&D	7	5.4	%	1,457	4.8	%
Cold Storage	4	4.0	%	933	3.1	%
Services	19	2.5	%	445	1.5	%
Industrial Total	142	46.3	%	21,649	71.7	%
Healthcare
Clinical	50	7.9	%	1,055	3.6	%
Animal Health Services	27	3.3	%	405	1.3	%
Surgical	11	3.1	%	316	1.0	%
Healthcare Services	27	2.5	%	315	1.0	%
Life Science	9	2.4	%	549	1.8	%
Untenanted	2	0.0	%	23	0.1	%
Healthcare Total	126	19.2	%	2,663	8.8	%
Restaurant
Quick Service Restaurants	148	7.8	%	505	1.7	%
Casual Dining	84	6.3	%	543	1.8	%
Untenanted	2	0.0	%	10	0.0	%
Restaurant Total	234	14.1	%	1,058	3.5	%
Retail
General Merchandise	82	4.6	%	1,072	3.5	%
Automotive	68	4.1	%	844	2.8	%
Home Furnishings	13	2.2	%	797	2.6	%
Untenanted	2	0.0	%	63	0.2	%
Retail Total	165	10.9	%	2,776	9.1	%
Office
Strategic Operations	7	4.4	%	1,021	3.4	%
Corporate Headquarters	6	3.3	%	671	2.2	%
Call Center	4	1.8	%	392	1.3	%
Office Total	17	9.5	%	2,084	6.9	%
Total	684	100.0	%	30,230	100.0	%

All values are in US Dollars.

Key Statistics by Property Type

Industrial
Number of properties	142
Square feet (000s)	21,649
Weighted average lease term (years)	10.4
Weighted average annual rent escalation	2.0	%
Healthcare
Number of properties	126
Square feet (000s)	2,663
Weighted average lease term (years)	8.1
Weighted average annual rent escalation	2.2	%
Restaurants
Number of properties	234
Square feet (000s)	1,058
Weighted average lease term (years)	15.4
Weighted average annual rent escalation	2.0	%
Retail
Number of properties	165
Square feet (000s)	2,776
Weighted average lease term (years)	11.0
Weighted average annual rent escalation	1.6	%
Office
Number of properties	17
Square feet (000s)	2,084
Weighted average lease term (years)	6.9
Weighted average annual rent escalation	2.4	%

Diversification: Tenant Industry (unaudited)

Industry
Healthcare Facilities	99	15.0	%	1,874	6.2	%
Restaurants	234	14.3	%	1,082	3.6	%
Distributors	24	4.4	%	2,519	8.3	%
Food Distributors	7	4.1	%	1,556	5.1	%
Auto Parts & Equipment	39	4.0	%	2,387	7.9	%
Specialized Consumer Services	47	3.8	%	720	2.4	%
Packaged Foods & Meats	6	3.6	%	1,130	3.7	%
Metal & Glass Containers	8	3.1	%	2,206	7.3	%
Healthcare Services	18	2.9	%	515	1.7	%
Home Furnishing Retail	16	2.8	%	1,149	3.8	%
Specialty Stores	19	2.7	%	1,023	3.4	%
Aerospace & Defense	6	2.5	%	921	3.0	%
Electronic Components	2	2.1	%	466	1.6	%
Air Freight & Logistics	3	2.1	%	436	1.5	%
General Merchandise Stores	60	2.0	%	533	1.8	%
Other (40 industries)	90	30.6	%	11,617	38.4	%
Untenanted properties	6	—		96	0.3	%
Total	684	100.0	%	30,230	100.0	%

All values are in US Dollars.

Diversification: Geography

(unaudited, rent percentages based on ABR)

State							State
TX	59	10.2	%	3,366	11.1	%	MO	10	1.5	%	959	3.2	%
IL	26	6.4	%	1,991	6.6	%	WA	15	1.3	%	150	0.5	%
FL	47	5.2	%	859	2.8	%	KY	18	1.3	%	338	1.1	%
CA	11	5.0	%	1,554	5.1	%	LA	3	1.0	%	175	0.6	%
WI	32	5.0	%	1,611	5.3	%	NE	6	0.9	%	509	1.7	%
MI	35	4.7	%	1,439	4.8	%	MD	4	0.9	%	293	1.0	%
OH	34	4.5	%	1,364	4.5	%	NM	8	0.9	%	96	0.3	%
NC	35	4.1	%	1,308	4.3	%	MS	8	0.9	%	334	1.1	%
MN	21	4.1	%	2,029	6.7	%	IA	4	0.9	%	622	2.1	%
IN	29	4.0	%	1,759	5.8	%	SC	13	0.8	%	308	1.0	%
PA	16	3.5	%	1,416	4.7	%	WV	16	0.8	%	109	0.4	%
TN	43	3.4	%	516	1.7	%	UT	3	0.7	%	280	0.9	%
NY	26	3.4	%	680	2.3	%	CT	2	0.5	%	55	0.2	%
MA	5	3.3	%	1,026	3.4	%	MT	7	0.5	%	43	0.1	%
AZ	8	2.7	%	761	2.5	%	CO	3	0.5	%	94	0.3	%
AL	44	2.5	%	186	0.6	%	NV	2	0.4	%	81	0.3	%
AR	11	2.4	%	282	0.9	%	DE	4	0.4	%	133	0.4	%
GA	21	2.3	%	1,056	3.5	%	ND	2	0.3	%	28	0.1	%
OK	20	2.3	%	944	3.1	%	WY	1	0.1	%	21	0.1	%
VA	17	1.7	%	204	0.7	%	VT	1	0.1	%	15	0.1	%
KS	10	1.6	%	639	2.1	%	Total US	683	98.6	%	29,999	99.2	%
NJ	3	1.6	%	366	1.2	%	Total Canada	1	1.4	%	231	0.8	%
							Grand Total	684	100.0	%	30,230	100.0	%

All values are in US Dollars.

Lease Expirations

(unaudited, rent percentages based on ABR)

Expiration Year
2021	2	0.1	%	37	0.1	%
2022	3	0.8	%	85	0.3	%
2023	6	1.5	%	515	1.7	%
2024	11	4.4	%	1,689	5.6	%
2025	19	2.5	%	682	2.3	%
2026	34	5.9	%	1,404	4.6	%
2027	27	7.4	%	2,010	6.7	%
2028	36	8.7	%	2,746	9.1	%
2029	66	6.6	%	2,647	8.8	%
2030	96	16.3	%	5,030	16.6	%
2031	23	2.4	%	737	2.4	%
2032	44	8.3	%	3,014	10.0	%
2033	42	5.4	%	1,717	5.7	%
2034	32	1.9	%	376	1.2	%
2035	16	3.7	%	1,552	5.1	%
2036	82	7.4	%	2,506	8.3	%
2037	24	5.5	%	1,367	4.5	%
2038	33	2.2	%	306	1.0	%
2039	12	2.9	%	933	3.1	%
2040	33	1.9	%	317	1.1	%
Thereafter	37	4.2	%	464	1.5	%
Untenanted properties	6	—		96	0.3	%
Total	684	100.0	%	30,230	100.0	%

All values are in US Dollars.

Portfolio Occupancy

(unaudited, based on square feet)

Definitions and Explanations

Adjusted NOI, Annualized Adjusted NOI, Adjusted Cash NOI and Annualized Adjusted Cash NOI: Our reported results and net earnings per diluted share are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). Adjusted NOI and Adjusted Cash NOI are non-GAAP financial measures that we believe are useful to assess property-level performance. We compute Adjusted NOI by adjusting Adjusted EBITDAre (defined below) to exclude general and administrative expenses incurred at the corporate level. Given the net lease nature of our portfolio, we do not incur general and administrative expenses at the property level. To compute Adjusted Cash NOI, we adjust Adjusted NOI to exclude non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash items, based on an estimate calculated as if all investment and disposition activity that took place during the quarter had occurred on the first day of the quarter. We then annualize quarterly Adjusted NOI and Adjusted Cash NOI by multiplying each amount by four to compute Annualized Adjusted NOI and Annualized Adjusted Cash NOI, respectively, which are also non-GAAP financial measures. We believe Adjusted NOI and Adjusted Cash NOI provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis. We believe that the exclusion of certain non-cash revenues and expenses from Adjusted Cash NOI is a useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by non-cash revenues or expenses. You should not unduly rely on Annualized Adjusted NOI and Annualized Adjusted Cash NOI as they are based on assumptions and estimates that may prove to be inaccurate. Our actual reported Adjusted NOI and Adjusted Cash NOI for future periods may be significantly different from our Annualized Adjusted NOI and Annualized Adjusted Cash NOI. Additionally, our computation of Adjusted NOI and Adjusted Cash NOI may differ from the methodology for calculating these metrics used by companies in our industry, and, therefore, may not be comparable to similarly titled measures reported by other companies.

Annualized Base Rent (ABR): We define ABR as the annualized contractual cash rent due for the last month of the reporting period, excluding the impacts of the short-term rent deferrals and abatements agreed to as a result of tenant requests for rent relief related to the COVID-19 pandemic, and adjusted to remove rent from properties sold during the month and to include a full month of contractual cash rent for properties acquired during the last month.

Cash Cap Rate: Cash Cap Rate represents the estimated first year cash yield to be generated on a real estate investment property, which was estimated at the time of investment based on the contractually specified cash base rent for the first full year after the date of the investment, divided by the purchase price for the property.

EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre: EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre are non-GAAP financial measures. We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. EBITDA is a measure commonly used in our industry. We believe that this ratio provides investors and analysts with a measure of our performance that includes our operating results unaffected by the differences in capital structures, capital investment cycles and useful life of related assets compared to other companies in our industry. We compute EBITDAre in accordance with the definition adopted by Nareit. Nareit defines EBITDAre as EBITDA excluding gains (loss) from the sales of depreciable property and provisions for impairment on investment in real estate. We believe EBITDA and EBITDAre are useful to investors and analysts because they provide important supplemental information about our operating performance exclusive of certain non-cash and other costs. Adjusted EBITDAre represents EBITDAre, adjusted to reflect revenue producing acquisitions and dispositions for the quarter as if such acquisitions and dispositions had occurred as of the beginning of the quarter, and to exclude certain GAAP income and expense amounts that are either non-cash, such as cost of debt extinguishments or the change in fair value of our earnout liability, or that we believe are one time, or unusual in nature because they relate to unique circumstances or transactions that had not previously occurred and which we do not anticipate occurring in the future, and to eliminate the impact of lease termination fees, and other items that are not a result of normal operations. We then annualize quarterly Adjusted EBITDAre by multiplying it by four to compute Annualized Adjusted EBITDAre. Our reported EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider these measures as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO): FFO and AFFO are non-GAAP measures. We believe the use of FFO and AFFO are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the operating performance of REITs. FFO and AFFO should not be considered alternatives to net income as a performance measure or to cash flows from operations, as reported on our statement of cash flows, or as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. We compute FFO in accordance with the standards established by Nareit, which defines FFO as GAAP net income or loss adjusted to exclude net gains (losses) from sales of certain depreciated real estate assets, depreciation and amortization expense from real estate assets, gains and losses from change in control, and impairment charges related to certain previously depreciated real estate assets. To derive AFFO, we modify the Nareit computation of FFO to include other adjustments to GAAP net income related to certain non-cash and non-recurring revenues and expenses, including straight-line rents, the change in fair value of our earnout liability, cost of debt extinguishments, amortization of lease intangibles, amortization of debt issuance costs, amortization of net mortgage premiums, (gain) loss on interest rate swaps and other non-cash interest expense, realized gains or losses on foreign currency transactions, internalization expenses, stock based compensation, severance, extraordinary items, and other specified non-cash items. We believe excluding such items assists management and investors in distinguishing whether changes in our operations are due to growth or decline of operations at our properties or from other factors.

Definitions and Explanations (continued)

Gross Debt: We define Gross Debt as total debt plus deferred financing costs.

Net Debt: Net Debt is a non-GAAP financial measure. We define Net Debt as our Gross Debt less cash and cash equivalents and restricted cash.

Occupancy: Occupancy or a specified percentage of our portfolio that is “occupied” means as of a specified date the quotient of (1) the total rentable square footage of our properties minus the square footage of our properties that are vacant and from which we are not receiving any rental payment, and (2) the total square footage of our properties.

Rent Coverage Ratio: Rent Coverage Ratio means the ratio of tenant-reported or, when available, management’s estimate, based on tenant-reported financial information, of annual earnings before interest, taxes, depreciation, amortization, and cash rent attributable to the leased property (or properties, in the case of a master lease) to the annualized base rental obligation as of a specified date.