Business Context and Reporting Period
This Form 8-K filing by Broadstone Net Lease, Inc. reports on events occurring as of December 31, 2018. The Company is a real estate investment trust focused on net leased properties. The report details the completion of a monthly closing of its ongoing private offering of common stock and provides an update on outstanding equity and operating company membership units.
Key Financial Metrics and Capital Activity
- Equity Proceeds (Dec 31 Closing): The Company sold 256,028.978 shares at a weighted average price of $85.98, generating aggregate proceeds of $22,012,431.00.
- DRIP Proceeds (Dec 15 Closing): 56,607.046 shares were issued under the Distribution Reinvestment Plan at $84.28 per share (a 2% discount to the $86.00 Determined Share Value), generating $4,770,842.34.
- Investment Cap: The Company maintains a $20.0 million monthly cap on new and additional investments. This cap excludes DRIP proceeds and equity from UPREIT transactions.
- Outstanding Equity: As of December 31, 2018, there were 22,014,984.970 shares of common stock issued and outstanding.
- Operating Company Units: There were 23,752,032.056 units of membership interest in Broadstone Net Lease, LLC. The Company owns approximately 92.69%, while noncontrolling interests hold approximately 7.31%.
Material Changes and Unusual Items
The primary material change reported is the increase in outstanding shares and capital raised through the December 31, 2018, private offering closing. The filing notes that approximately $3,700 in subscriptions were held in queue for subsequent closings at $86.00 per share. The filing text does not provide comparative financial metrics (revenue, profit, cash flow, or debt levels) for the prior period, as this report focuses exclusively on the equity transaction.
Guidance, Outlook, and Use of Proceeds
Management intends to use substantially all net proceeds from the December 31, 2018, closing, supplemented by additional borrowings, to invest in additional net leased properties and for general corporate purposes. The shares were issued in reliance on the exemption from registration under Rule 506(c) of Regulation D.
Investor Verification Checklist
- Verify the total capital raised in the December 2018 closings ($22.0M private offering + $4.8M DRIP) against the Company's stated investment cap of $20.0 million for new investments.
- Confirm the current Determined Share Value and the discount rate applied to the DRIP in subsequent periods.
- Review the Company's periodic reports (Forms 10-Q and 10-K) for detailed information on the equity cap and queue program mechanics.
- Assess the impact of the 7.31% noncontrolling interest in the Operating Company on consolidated financial statements.