Business Context and Reporting Period
This Form 8-K filing by Broadstone Net Lease, Inc. reports on events occurring on February 28, 2018. The Company is a net lease real estate investment trust (REIT) incorporated in Maryland. The report details the completion of a monthly closing of its ongoing private offering of common stock.
Key Financial Metrics and Capital Activity
- Equity Raised: The Company sold 184,454.003 shares of common stock at $81.00 per share, generating aggregate proceeds of $14,940,773.31.
- DRIP Activity: On February 15, 2018, the Distribution Reinvestment Plan (DRIP) issued 49,907.053 shares at $79.38 per share (a 2% discount to the $81.00 Determined Share Value), generating $3,961,625.39.
- Outstanding Shares: As of February 28, 2018, there were 19,377,843.745 shares of common stock issued and outstanding.
- Operating Company Units: There were 20,929,301.675 units of membership interest in the Operating Company, with approximately 7.41% held as noncontrolling interests.
- Investment Cap: A $15 million monthly cap on new and additional investments is in place for February, March, and April 2018.
- Queue Status: Approximately $2,680,000 remained in the queue for subsequent equity closings at $81.00 per share.
Note: This filing does not provide data on revenue, net income, operating cash flow, margins, or total debt levels.
Material Changes
The primary material change is the increase in outstanding common stock and equity capital resulting from the February 28, 2018, private placement closing. The filing confirms the continuation of the monthly closing schedule for the private offering.
Outlook, Management Commentary, and Risks
- Use of Proceeds: Management intends to use substantially all net proceeds from this and future closings, supplemented by additional borrowings, to invest in additional net leased properties and for general corporate purposes.
- Regulatory Basis: The sale of shares was conducted under the exemption from registration provided by Rule 506(c) under Regulation D.
- UPREIT Transactions: The $15 million investment cap does not apply to equity capital received in connection with umbrella partnership real estate investment trust (UPREIT) transactions.
Key Facts for Investor Verification
- Verify the total capital raised in the private offering for the full quarter to assess funding capacity against the $15 million monthly investment cap.
- Confirm the current Determined Share Value and any changes in the discount rate applied to the DRIP.
- Review subsequent filings to determine how the $2.68 million in the queue was utilized and if the investment cap was reached in March or April 2018.
- Check the Company's balance sheet in the next 10-Q or 10-K to see the impact of these equity issuances on total debt and leverage ratios.