Broadstone Net Lease Announces Third Quarter 2025 Results

VICTOR, N.Y.--( BUSINESS WIRE)--Broadstone Net Lease, Inc. (NYSE: BNL) (“BNL”, the “Company”, “we”, “our”, or “us”), today announced its operating results for the quarter ended September 30, 2025.

MANAGEMENT COMMENTARY

“Our strong third-quarter results reflect the continued success of our differentiated growth strategy as well as the deep expertise and strategic acumen of our team," said John Moragne, BNL's Chief Executive Officer. "This quarter we invested $204 million in an attractive pipeline of accretive acquisitions and development projects, collected 100% of our rents, resolved both the At Home and Claire's situations with all leases assumed and no bad debt incurred from either, and secured 1.2% sequential quarterly growth in contractual rental obligations. As a result, and reflecting our year-to-date success and our ongoing commitment to driving long-term shareholder value, we are raising our full-year guidance to $1.49 to $1.50 of AFFO per share, representing 4.2% to 4.9% growth for the year. We are proud of what we have accomplished so far but are no less determined to push BNL even higher."

THIRD QUARTER 2025 HIGHLIGHTS

OPERATING

RESULTS

INVESTMENT & DISPOSITION ACTIVITY

CAPITAL MARKETS ACTIVITY

SUMMARIZED FINANCIAL RESULTS

For the Three Months Ended

For the Nine Months Ended

(in thousands, except per share data)

September 30,

2025

June 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

Revenues

114,167

112,986

108,397

335,843

319,670

Net income, including non-controlling interests

27,065

19,830

37,268

64,388

141,382

Net earnings per share – diluted

0.14

0.10

0.19

0.33

0.72

FFO

70,969

73,695

73,818

217,291

220,679

FFO per share

0.36

0.37

1.10

1.12

Core FFO

70,386

77,150

73,971

222,816

221,045

Core FFO per share

0.35

0.39

0.37

1.12

AFFO

74,314

74,308

70,185

220,434

211,460

AFFO per share

0.37

0.38

0.35

1.11

1.07

Diluted Weighted Average Shares Outstanding

197,632

197,138

196,932

197,476

196,799

FFO, Core FFO, and AFFO 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 September 30, 2025, we owned a diversified portfolio of 759 individual net leased commercial properties with 752 properties located in 44 U.S. states and seven properties located in four Canadian provinces, comprising approximately 40.7 million rentable square feet of operational space. As of September 30, 2025, all but three of our properties were subject to a lease, and our properties were occupied by 204 different commercial tenants, with no single tenant accounting for more than 3.9% of our annualized base rent (“ABR”). Properties subject to a lease represent 99.5% of our portfolio’s rentable square footage. The ABR weighted average lease term and ABR weighted average annual rent increase, pursuant to leases on properties in the portfolio as of September 30, 2025, was 9.5 years and 2.0%, respectively.

BUILD-TO-SUIT DEVELOPMENT PROJECTS

The following table summarizes our in-process and stabilized developments as of October 24, 2025. We have secured the land and started construction on eight in-process developments.

Property

Projected Rentable Square Feet

Start Date

Target Stabilization Date/Stabilized Date (c)

Lease Term (Years)

Annual Rent Escalations

Estimated Total Project Investment (d)

Cumulative Investment

Estimated Remaining Investment

Estimated Cash Capitalization Rate (e)

Estimated Straight-line Yield

In-process retail:

7 Brew

(Jacksonville - FL)

Jun. 2025

Oct. 2025

15.0

1.9

2,008

1,411

597

8.0

8.8

Sprouts

(Bedford, TX)

Jul. 2025

Aug. 2026

15.0

0.9

9,533

405

9,128

7.2

7.7

In-process industrial:

Sierra Nevada

(Dayton - OH)

122

Oct. 2024

Nov. 2025

15.0

3.0

58,563

47,625

10,938

7.5

9.3

Sierra Nevada

(Dayton - OH)

122

Oct. 2024

Mar. 2026

15.0

3.0

55,525

32,718

22,807

7.7

9.6

Southwire

(Bremen - GA)

1,178

Dec. 2024

Oct. 2026

10.0

2.8

115,411

26,682

88,729

7.8

8.8

Fiat Chrysler Automobile (Forsyth - GA)

422

Apr. 2025

Aug. 2026

15.0

2.8

78,242

24,682

53,560

6.9

8.4

AGCO

(Vasaila - CA)

115

Jun. 2025

Aug. 2026

12.0

3.5

19,523

14,317

5,206

7.0

8.5

Palmer Logistics

(Midlothian, TX) (b)

270

Jul. 2025

Jul. 2026

12.3

3.5

32,063

6,646

25,417

7.6

9.2

Total / weighted average

2,252

13.1

2.9

370,868

154,486

216,382

7.5

8.9

Stabilized industrial:

UNFI

(Sarasota - FL)

1,016

May 2023

Stabilized - Sep. 2024

15.0

2.5

200,958

—

7.2

8.6

Stabilized retail:

7 Brew

(High Point - NC)

Dec. 2024

Stabilized - Jun. 2025

15.0

1.9

1,975

—

8.0

8.8

7 Brew

(Charleston - SC)

Feb. 2025

Stabilized - May 2025

15.0

1.9

1,729

—

7.9

8.8

Total / weighted average

3,270

13.7

2.7

575,530

359,148

216,382

7.4

8.8

DISTRIBUTIONS

At its October 23, 2025, meeting our board of directors declared a quarterly dividend of $0.29 per common share and OP Unit to holders of record as of December 31, 2025, payable on or before January 15, 2026.

2025 GUIDANCE

For 2025, BNL expects to report AFFO of $1.49 to $1.50 per diluted share, revised up from $1.48 to $1.50, as a result of our portfolio's strong year-to-date performance.

The guidance is based on the following key assumptions:

Our per share results are sensitive to both the timing and amount of real estate investments, property dispositions, and capital markets activities that occur throughout the year.

The Company does not provide guidance for the most comparable GAAP financial measure, net income, or a reconciliation of the forward-looking non-GAAP financial measure of AFFO to net income computed in accordance with GAAP, because it is unable to reasonably predict, without unreasonable efforts, certain items that would be contained in the GAAP measure, including items that are not indicative of the Company’s ongoing operations, including, without limitation, potential impairments of real estate assets, net gain/loss on dispositions of real estate assets, changes in allowance for credit losses, and stock-based compensation expense. These items are uncertain, depend on various factors, and could have a material impact on the Company’s GAAP results for the guidance periods.

CONFERENCE CALL AND WEBCAST

The Company will host its earnings conference call and audio webcast on Thursday, October 30, 2025, at 11:00 a.m. Eastern Time.

To access the live webcast, which will be available in listen-only mode, please visit: https://events.q4inc.com/attendee/532774299. If you prefer to listen via phone, U.S. participants may dial: 1-833-470-1428 (toll free) or 1-646-844-6383 (local), access code 237687. International access numbers are viewable here: https://www.netroadshow.com/conferencing/global-numbers?confId=89850.

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 via the web, which will be available for one year, please visit: https://investors.bnl.broadstone.com.

About Broadstone Net Lease, Inc.

BNL is an industrial-focused, diversified net lease REIT that invests in primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. Utilizing an investment strategy underpinned by strong fundamental credit analysis and prudent real estate underwriting, as of September 30, 2025, BNL’s diversified portfolio consisted of 759 individual net leased commercial properties with 752 properties located in 44 U.S. states and seven properties located in four Canadian provinces across the industrial, retail, and other 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 “outlook,” “potential,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “projects,” “predicts,” “expect,” “intends,” “anticipates,” “estimates,” “plans,” “would be,” “believes,” “continues,” or the negative version of these words or other comparable words. Forward-looking statements, including our 2025 guidance and assumptions, 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 general economic conditions, including but not limited to increases in the rate of inflation and/or interest rates, local real estate conditions, tenant financial health, property investments and acquisitions, and the timing and uncertainty of completing these property investments and 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, 2024, which the Company filed with the SEC on February 20, 2025, and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which was filed with the SEC on May 1, 2025, both of which you are encouraged to read, and will be available on the SEC’s website at www.sec.gov. Please note that such Risk Factors will be updated, if necessary, through the filing of Quarterly Reports on Form 10-Q. 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 (“FFO”), Core Funds From Operations (“Core FFO”), AFFO, Net Debt, and Net Debt to Annualized Adjusted EBITDAre. We believe the use of FFO, Core 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, Core 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)

September 30,

2025

December 31,

2024

Assets

Accounted for using the operating method:

Land

778,177

778,826

Land improvements

359,210

357,142

Buildings and improvements

3,954,112

3,815,521

Equipment

16,070

15,843

Total accounted for using the operating method

5,107,569

4,967,332

Less accumulated depreciation

(745,326

)

(672,478

)

Accounted for using the operating method, net

4,362,243

4,294,854

Accounted for using the direct financing method

25,673

26,154

Accounted for using the sales-type method

14,407

571

Property under development

179,172

18,784

Investment in rental property, net

4,581,495

4,340,363

Cash and cash equivalents

81,966

14,845

Accrued rental income

174,867

162,717

Tenant and other receivables, net

3,573

3,281

Prepaid expenses and other assets

59,866

41,584

Interest rate swap, assets

19,590

46,220

Goodwill

339,769

Intangible lease assets, net

258,145

267,638

Total assets

5,519,271

5,216,417

Liabilities and equity

Unsecured revolving credit facility

95,824

93,014

Mortgages, net

57,168

76,846

Unsecured term loans, net

994,550

897,201

Senior unsecured notes, net

1,190,315

846,064

Interest rate swap, liabilities

1,994

—

Accounts payable and other liabilities

55,662

48,983

Dividends payable

58,665

58,317

Accrued interest payable

9,488

5,837

Intangible lease liabilities, net

43,096

48,731

Total liabilities

2,506,762

2,074,993

Commitments and contingencies

Equity

Broadstone Net Lease, Inc. equity:

Preferred stock, $0.001 par value; 20,000 shares authorized, no shares issued or outstanding

—

Common stock, $0.00025 par value; 500,000 shares authorized, 189,216 and 188,626 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

3,463,010

3,450,584

Cumulative distributions in excess of retained earnings

(597,571

)

(496,543

)

Accumulated other comprehensive income

19,172

49,657

Total Broadstone Net Lease, Inc. equity

2,884,658

3,003,745

Non-controlling interests

127,851

137,679

Total equity

3,012,509

3,141,424

Total liabilities and equity

5,519,271

5,216,417

Broadstone Net Lease, Inc. and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive (Loss) Income

(in thousands, except per share amounts)

For the Three Months Ended

For the Nine Months Ended

September 30,

2025

June 30,

2025

September 30,

2025

September 30,

2024

Revenues

Lease revenues, net

114,167

112,986

335,843

319,670

Operating expenses

Depreciation and amortization

40,246

42,575

122,318

113,192

Property and operating expense

6,198

5,003

16,688

17,976

General and administrative

9,974

9,571

29,216

28,058

Provision for impairment of investment in rental properties

6,999

11,939

35,067

31,311

Total operating expenses

63,417

69,088

203,289

190,537

Other income (expenses)

Interest income

182

122

403

952

Interest expense

(28,230

)

(21,112

)

(69,416

)

(54,512

)

Gain on sale of real estate

3,259

566

4,230

64,956

Income taxes

(208

)

(199

)

(763

)

(649

)

Other (expenses) income

1,312

(3,445

)

(2,620

)

1,502

Net income

27,065

19,830

64,388

141,382

Net income attributable to non-controlling interests

(599

)

330

(1,019

)

(5,331

)

Net income attributable to Broadstone Net Lease, Inc.

26,466

20,160

63,369

136,051

Weighted average number of common shares outstanding

Basic

188,099

188,041

188,002

187,408

Diluted

197,632

197,138

197,476

196,799

Net earnings per common share

Basic

0.14

0.11

0.33

0.72

Diluted

0.14

0.10

0.33

0.72

Comprehensive income (loss)

Net income

27,065

19,830

64,388

141,382

Other comprehensive income (loss)

Change in fair value of interest rate swaps

(4,981

)

(10,463

)

(35,336

)

(31,334

)

Realized loss (gain) on interest rate swaps

6,103

)

6,091

216

Comprehensive income (loss)

28,187

9,361

35,143

110,264

Comprehensive income (loss) attributable to non-controlling interests

(646

)

775

232

(3,950

)

Comprehensive income (loss) attributable to Broadstone Net Lease, Inc.

27,541

10,136

35,375

106,314

Reconciliation of Non-GAAP Measures

The following is a reconciliation of net income to FFO, Core FFO, and AFFO for the three months ended September 30, 2025, June 30, 2025, and September 30, 2024, and the nine months ended September 30, 2025, and September 30, 2024. 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 Nine Months Ended

(in thousands, except per share data)

September 30,

2025

June 30,

2025

September 30,

2025

September 30,

2024

Net income

27,065

19,830

64,388

141,382

Real property depreciation and amortization

40,164

42,492

122,066

112,942

Gain on sale of real estate

(3,259

)

(566

)

(4,230

)

(64,956

)

Provision for impairment on investment in rental properties

6,999

11,939

35,067

31,311

FFO

70,969

73,695

217,291

220,679

Net write-offs of accrued rental income

755

2,987

2,556

Other non-core income from real estate transactions

(27

)

(46

)

(137

)

(887

)

Cost of debt extinguishment

—

166

—

Severance and employee transition costs

199

Other (income) expenses 1

(1,312

)

3,445

2,454

(1,502

)

Core FFO

70,386

77,150

222,816

221,045

Straight-line rent adjustment

(4,960

)

(5,586

)

(16,452

)

(15,341

)

Adjustment to provision for credit losses

—

(13

)

(13

)

(17

)

Amortization of debt issuance costs

1,357

1,328

3,922

2,949

Non-capitalized transaction costs

125

142

383

653

Realized gain or loss on interest rate swaps and other non-cash interest expense

6,116

6,126

216

Amortization of lease intangibles

(1,198

)

(1,191

)

(3,453

)

(3,422

)

Stock-based compensation

2,488

2,471

7,105

5,377

AFFO

74,314

74,308

220,434

211,460

Diluted WASO 2

197,632

197,138

197,476

196,799

Net earnings per diluted share 3

0.14

0.10

0.33

0.72

FFO per diluted share 3

0.36

0.37

1.10

1.12

Core FFO per diluted share 3

0.35

0.39

1.12

AFFO per diluted share 3

0.37

0.38

1.11

1.07

Our reported results and net earnings per diluted share are presented in accordance with GAAP. We also disclose FFO, Core FFO, and AFFO, each of which are non-GAAP measures. We believe the use of FFO, Core 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, Core 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, and impairment charges related to certain previously depreciated real estate assets. 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 (losses) 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 compute Core FFO by adjusting FFO, as defined by Nareit, to exclude certain GAAP income and expense amounts that we believe are infrequently recurring, unusual in nature, or not related to its core real estate operations, including write-offs or recoveries of accrued rental income, cost of debt extinguishments, lease termination fees and other non-core income from real estate transactions, gain on insurance recoveries, severance and employee transition costs, and other extraordinary items. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis.

We compute AFFO, by adjusting Core FFO for certain revenues and expenses that are non-cash or unique in nature, including straight-line rents, adjustment to provision for credit losses, amortization of lease intangibles, amortization of debt issuance costs, amortization of net mortgage premiums, non-capitalized transaction costs such as acquisition costs related to deals that failed to transact, (gain) loss on interest rate swaps and other non-cash interest expense, deferred taxes, stock-based compensation, and other specified non-cash items. We believe that 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. We use AFFO as a measure of our performance when we formulate corporate goals, and is a factor in determining management compensation. 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.

Specific to our adjustment for straight-line rents, 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.

FFO, Core FFO, and AFFO may not be comparable to similarly titled measures employed by other REITs, and comparisons of our FFO, Core 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 Core FFO and 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 Core FFO and AFFO accordingly.

The following is a reconciliation of net income to EBITDA, EBITDAre, Adjusted EBITDAre, and Pro Forma Adjusted EBITDAre, debt to Net Debt and Pro Forma Net Debt, Net Debt to Annualized Adjusted EBITDAre, and Pro Forma Net Debt to Annualized Adjusted EBITDAre as of and for the three months ended September 30, 2025, June 30, 2025, and September 30, 2024:

For the Three Months Ended

(in thousands)

September 30,

2025

June 30,

2025

September 30,

2024

Net income

27,065

19,830

37,268

Depreciation and amortization

40,246

42,575

38,016

Interest expense

28,230

21,112

18,178

Income taxes

208

199

291

EBITDA

95,749

83,716

93,753

Provision for impairment of investment in rental properties

6,999

11,939

1,059

Gain on sale of real estate

(3,259

)

(566

)

(2,441

)

EBITDAre

99,489

95,089

92,371

Adjustment for current quarter investment activity 1

1,797

573

4,080

Adjustment for current quarter disposition activity 2

(257

)

(490

)

(66

)

Adjustment to exclude non-recurring and other expenses 3

(177

)

(332

)

(201

)

Adjustment to exclude net write-offs of accrued rental income

755

—

Adjustment to exclude realized / unrealized foreign exchange (gain) loss

(1,312

)

3,445

942

Adjustment to exclude other income from real estate transactions

(43

)

(46

)

(887

)

Adjusted EBITDAre

100,252

98,242

96,239

Estimated revenues from developments 4

2,544

1,629

—

Pro Forma Adjusted EBITDAre

102,796

99,871

96,239

Annualized EBITDAre

397,956

380,356

369,484

Annualized Adjusted EBITDAre

401,008

392,968

384,956

Pro Forma Annualized Adjusted EBITDAre

411,184

399,484

384,956

(in thousands)

September 30,

2025

June 30,

2025

September 30,

2024

Debt

Unsecured revolving credit facility

95,824

197,880

125,482

Unsecured term loans, net

994,550

994,028

896,887

Senior unsecured notes, net

1,190,315

846,441

845,875

Mortgages, net

57,168

75,685

77,416

Debt issuance costs

15,171

9,578

7,314

Gross Debt

2,353,028

2,123,612

1,952,974

Cash and cash equivalents

(81,966

)

(20,784

)

(8,999

)

Restricted cash

(1,354

)

(1,192

)

(2,219

)

Net Debt

2,269,708

2,101,636

1,941,756

Estimated net proceeds from forward equity agreements 1

(37,257

)

(37,722

)

(38,983

)

Pro Forma Net Debt

2,232,451

2,063,914

1,902,773

Leverage Ratios:

Net Debt to Annualized EBITDAre

5.7x

5.5x

5.3x

Net Debt to Annualized Adjusted EBITDAre

5.7x

5.3x

5.0x

Pro Forma Net Debt to Annualized Adjusted EBITDAre

5.4x

5.2x

4.9x

We define Net Debt as gross debt (total reported debt plus debt issuance 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 (losses) 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 investment 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, and Pro Forma Net Debt to Annualized Adjusted EBITDAre, each 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 investments using our unsecured Revolving Credit Facility, our leverage profile and Net Debt will be immediately impacted by current quarter investments. However, the full benefit of EBITDAre from new investments 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 investments 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 investments 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, realized or unrealized gains and losses on foreign currency transactions, or gains on insurance recoveries, 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. While investments in build-to-suit developments have an immediate impact to Net Debt, we do not make an adjustment to EBITDAre until the quarter in which the lease commences. We define our Pro Forma Adjusted EBITDAre as Adjusted EBITDAre adjusted to show the impact of estimated contractual revenues based on in-process development spend to-date. Our Pro Forma Net Debt is defined as Net Debt adjusted for estimated net proceeds from forward sale agreements that have not settled as if they have been physically settled for cash as of the period presented. We then annualize quarterly Adjusted EBITDAre and Pro Forma Adjusted EBITDAre by multiplying them by four (“Annualized Adjusted EBITDAre” and “Annualized Pro Forma 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.