Business Context and Reporting Period
This Form 8-K filing by Broadstone Net Lease, Inc. reports on events occurring on February 28, 2019. The Company is a real estate investment trust focused on net leased properties. The report details the completion of a monthly closing for its ongoing private offering of common stock.
Key Financial Metrics
- Capital Raised: $20,000,000.00 in aggregate proceeds from the February 28, 2019 closing.
- Shares Issued (Private Offering): 235,294.108 shares at $85.00 per share.
- Shares Issued (DRIP): 58,494.229 shares issued on February 15, 2019, generating $4,929,895.97 at $84.28 per share.
- Total Outstanding Common Stock: 22,597,882.214 shares as of February 28, 2019.
- Operating Company Units: 24,334,929.300 units outstanding, with 7.14% held as noncontrolling interests.
- Investment Cap: A $20.0 million monthly cap applies to new and additional investments (excluding DRIP and UPREIT transactions).
- Subscription Queue: Approximately $18,001,761.81 in subscriptions held for subsequent closings.
Note: This filing does not provide data on revenue, profit, cash flow, margins, or debt levels.
Material Changes
The primary material change is the increase in outstanding equity following the February 28, 2019 closing. The Company sold 235,294.108 shares of common stock, increasing the total issued and outstanding shares to approximately 22.6 million. Additionally, the filing notes a separate issuance of 58,494.229 shares via the Distribution Reinvestment Plan (DRIP) on February 15, 2019.
Outlook, Management Commentary, and Risks
- Use of Proceeds: The Company intends to use substantially all net proceeds from the private offering, supplemented by additional borrowings, to invest in additional net leased properties and for general corporate purposes.
- Offering Structure: Sales are conducted monthly under Rule 506(c) of Regulation D. The Company maintains a queue system for subscriptions exceeding the monthly $20 million cap.
- UPREIT Structure: The Company operates through a subsidiary operating company (Broadstone Net Lease, LLC). Noncontrolling interests represent approximately 7.14% of the Operating Company's units, which are convertible into common stock on a one-for-one basis.
Investor Verification Checklist
- Verify the current status of the $18,001,761.81 subscription queue and expected closing dates.
- Confirm the specific properties targeted for acquisition with the $20 million raised in this closing.
- Review the Company's leverage ratios and debt capacity in the most recent 10-Q or 10-K to assess the impact of "additional borrowings" mentioned in the use of proceeds.
- Monitor the conversion rate of noncontrolling interest units in the Operating Company to common stock.