ブロードストーン・ネット・リース 2026年第3四半期決算説明会サマリー

ブロードストーン・ネット・リース（NYSE: BNL）は、BTS（オーダーメイド型）プロジェクトの安定稼働化や直近の投資の貢献に伴い、2026年第3四半期のAFFO（調整後事業キャッシュフロー）が7,780万ドル（希薄化後1株当たり0.39ドル）になったと発表しました。経営陣は通期のAFFO業績予想を再確認するとともに、投資額および資産売却額の見通しを引き上げました。

要点

• 希薄化後1株当たりAFFOは前年同期比5.4%増の0.39ドルとなり、総AFFOは7,780万ドルでした。
• BNLは当四半期中に2億3,660万ドルの投資を行いました。これにはBTS開発投資の1億3,710万ドルおよび産業用物件の買収6,380万ドルが含まれます。
• 進行中のBTSパイプラインは計7プロジェクトで総額約4億5,600万ドルとなり、推定加重平均キャッシュ利回りは8.0%、定額法ベースの利回りは10.4%です。
• 経営陣は、確定済みのパイプラインにより2027年末までに年間ベース賃料が約3,600万ドル増加すると見込んでおり、これは現在の年間ベース賃料（4億4,950万ドル）の8%以上に相当します。
• 当四半期末時点のポートフォリオの面積ベース稼働率はほぼ100%であり、支払い期日を迎えたベース賃料の99.9%を回収しました。
• 経営陣は2026年通期の希薄化後1株当たりAFFO予想（1.55〜1.57ドル）を再確認し、同見通しの前提となる投資額および資産売却額の見通しを引き上げました。

主要財務データ

事業および運用業績

BNLの当四半期における投資額2億3,660万ドルの内訳は、産業用物件1件の買収に6,380万ドル、BTS開発に1億3,710万ドル、経過的資本投資に3,510万ドル、再開発支出に60万ドルとなっています。

買収した産業用物件の面積は約54万4,000平方フィートです。初期キャッシュキャップレートは7.7%、賃貸借期間は15年、年2%の賃料増額条件が付されており、定額法ベースの利回りは8.8%となります。

同社は総コスト見込額3億2,580万ドルに上る3つのBTSプロジェクトに着手しました。これらの加重平均初期キャッシュキャップレートは8.4%、定額法ベース利回りは11.3%です。また、当四半期中には他の6つのプロジェクトが安定稼働化し、想定投資額は約9,530万ドル、加重平均キャッシュキャップレートは7.3%でした。

四半期末後、ジョージア州ブレーメンにおける1億1,500万ドル規模のサウスワイヤー（Southwire）プロジェクトが、初年度キャッシュキャップレート7.8%で安定稼働に達しました。現在進行中のBNLのBTSパイプラインは7プロジェクトで構成され、その約83%が産業用物件です。パイプラインの加重平均賃貸借期間は14.8年、年間の賃料改定率は2.7%となっています。

経営陣は、パイプラインからの増加年間ベース賃料について、2026年第4四半期に約200万ドル、2027年上半期に約3,100万ドル、残りが2027年下半期に発生すると見込んでいます。

契約上の賃料増額は既存物件ポートフォリオ全体で1.9%の成長に寄与し、産業用物件では2.1%でした。公表された既存物件成長率は、現在再開発中である2物件の前年賃料約120万ドルにより押し下げられました。なお、BNLが年初来で完了した2026年および2027年の賃料更新におけるリキャプチャー率は111%に達しました。

BNLは当四半期中に3物件を売却し、キャップレート6.6%で1,250万ドルの総収入を得ました。年初来の物件売却は計13物件、総収入は8,670万ドルとなり、テナント入居済み物件の加重平均キャップレートは6.3%でした。

プロジェクト・トリボロおよび再開発

プロジェクト・トリボロ（Project Triboro）はペンシルベニア州北東部の550エーカー超におよび、1ギガワットの電力供給契約を確保しています。BNLは9月30日時点で同プロジェクトに約1億5,400万ドルを投資しています。

経営陣は現在も、短期的な土地流動化、ハイパースケール・データセンター・キャンパスの開発、大型産業用建物4棟の建設という3つの選択肢を検討しています。建築用地4区画のうち最初の1区画は上物工事（垂直建設）に入る準備がほぼ整っており、初期の電力供給は2028年上半期を目標としています。

当面の最優先事項はゾーニング（用途地域指定）です。経営陣によると、テナントおよび電力に関する協議はデータセンター用ゾーニングの取得にかかっており、ゾーニング、電力、テナント需要の明確化により年内には意思決定を行える見込みだと慎重ながら楽観的な見方を示しています。データセンター計画が進展する場合、BNLは公募株式（パブリック・エクイティ）に頼るのではなく、プロジェクト売却またはプライベート・キャピタルによる資金調達構造の採用を想定しています。

同社はまた、機能的に老朽化したシカゴ地域のオフィス物件を約15万6,000平方フィートの産業用スペースへと再開発しています。想定投資額は1,790万ドルで、安定稼働後の年間ベース賃料目標は当初の140万ドルに対して約270万ドルを見込んでいます。実質的な竣工は2027年第2四半期を目指しています。

イリノイ州ホフマンエステーツにおける2つ目の再開発案件の総投資見積額は2,840万ドルです。経営陣は2028年第3四半期の安定稼働化と、約330万ドルの安定稼働後年間ベース賃料を目指しています。

経営陣の業績予想（ガイダンス）

BNLは2026年通期の希薄化後1株当たりAFFO予想（1.55〜1.57ドル）を再確認しました。経営陣によると、中間値である1.56ドルは2025年比で約5%の成長を意味します。

経営陣は、通期業績が投資、資産売却、資本市場活動のタイミング、金額、構成比に左右されやすい状況が続いていると述べています。業績予想には、自己株式方式に基づく未決済フォワード株式（加重平均で約35万〜60万株）による1株当たり0.005ドル未満の想定希薄化が含まれています。

リスクと注目点

• 金金利のボラティリティが取引活動、調達手段の選択肢、潜在的なBTSプロジェクトの収益性に影響を与えています。
• 経営陣によると、堅調な取引における市場キャップレートは約25〜50ベーシスポイント上昇した一方、プライベート・エクイティが主導する高レバレッジ案件の一部では取引が成立していません。
• 建築コストは、直接工事費（ハードコスト）かプロジェクト総予算かの定義により異なるものの、約10%〜15%上昇しています。
• 一部のテナント候補で開発承認に時間を要しており、BNLは改定後の価格設定が目標リターン要件を満たさなかった複数の案件の検討を中止しました。
• 変動金利へのエクスポージャーは負債総額の約20%〜30%で推移しています。経営陣は、長期固定金利での資金調達を検討しつつ、当面はより短期かつ変動金利主体の構成を維持する方針です。
• プロジェクト・トリボロは、依然としてゾーニング、電力協定、テナント需要、および実行可能な資金調達構造の確保に依存しています。

アナリスト質疑応答のハイライト

BTS開発の経済性：経営陣によると、テナントの意思決定の遅れやプロジェクト選別の厳格化にもかかわらず、パイプラインは引き続き好調です。BNLは2028年まで開発スケジュールが続く可能性のある追加プロジェクトを検討していますが、価格設定が資本コストや機会コストを反映していない場合は案件を進めない方針です。

資本の利用可能性：BNLは未決済のフォワード株式による約4億900万ドルの手取り見込額、リボルビング信用枠における4億2,880万ドルの利用可能枠、ならびに3億ドルのディレイドドロー型タームローンの融資枠（うち1億ドルを引き出し済み）を保有しています。経営陣は10億ドル以上の手元流動性を確保しており、プロジェクトの完了や賃料発生のタイミングに合わせて概ねフォワード株式の決済を行う予定であると述べました。

プロジェクト・トリボロの資金調達：経営陣は、現在の市場環境下で数十億ドル規模のデータセンター開発のために公募株式調達に依存する可能性を否定しました。データセンターとして計画が進む場合、好ましい手法は売却またはプライベート・キャピタルとのジョイントベンチャーです。産業用物件としての計画は代替案として維持されています。

コロラド州での拡張：コロラド州における2つ目の潜在的プロジェクトについて協議が継続していますが、決定には至っていません。経営陣は2027年の意思決定になる可能性が高いとし、既存プロジェクトについては上物工事に着手したと述べました。

賃貸借契約の更新：年初来のリキャプチャー率は111%に達したものの、経営陣は長期的には100%台前半、概ね102%〜105%程度がより妥当な見通しであると示唆しました。

負債戦略：経営陣は、当面の借り換えにおいてより短期かつ変動金利の構造を選択する可能性が高いと述べました。長期の固定金利負債については、該当するベンチマークに対して約110〜125ベーシスポイントの上乗せとなる7〜10年物が妥当な限界コストの前提であると言及しました。

決算説明会文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, and welcome to Broadstone Net Lease's Third Quarter 2026 Earnings Conference Call. My name is Matthew, and I will be your operator today. Please note that today's call is being recorded.

I will now turn the call over to Brent Maedl, Director of Corporate Finance and Business Analytics at Broadstone. Please go ahead.

Brent Maedl

Thank you, everyone, for joining us today for Broadstone Net Lease's Third Quarter 2026 Earnings Call. On today's call, you will hear prepared remarks from Chief Executive Officer, John Moragne; President and Chief Operating Officer, Ryan Albano; and Chief Financial Officer, Kevin Fennell. All 3 will be available for the Q&A portion of this call.

As a reminder, the following discussion and answers to your questions contain forward-looking statements, which are subject to risks and uncertainties that can cause actual results to differ materially due to a variety of factors. We caution you not to place undue reliance on these forward-looking statements. For a more detailed discussion of risk factors that may cause such differences, please refer to our SEC filings, including our Form 10-K for the year ended December 31, 2025, and note that such risk factors may be updated in our quarterly SEC filings. Any forward-looking statements provided during this conference call are only made as of the date of this call.

With that, I'll turn the call over to John.

John Moragne

Thank you, Brent, and good morning, everyone. Before turning to our quarterly results, I would like to quickly address the stark change in the capital markets and macroeconomic environment that we have all experienced recently.

While the moves have been materially negative over the last quarter, since this management team took over in 2023, our team has consistently demonstrated our ability to operate this business through broader market volatility of all kinds. We will continue to operate the playbook that has worked since we started on this journey: disciplined execution, creative thinking and controlling our own destiny.

As many of you have heard from us over the last couple of years, our degree of selectivity has remained elevated for some time and recent market moves serve more as a validation of our position than as disruption to our plans. In fact, this is exactly the kind of environment we built our strategy for in the first place.

Strong same-store growth and prudent balance sheet management, combined with a differentiated growth strategy that provides long-term visibility into attractive growth without reliance on the usual heavily marketed net lease acquisition channels works in any environment, but particularly one suffering from the type of volatility and uncertainty that we are seeing today.

On to the results. The third quarter was a continuation of the progress we have been driving toward all year and really over the last 3 years. We generated AFFO of $0.39 per diluted share, a 5.4% increase over the third quarter of last year. We returned to the public equity markets for the first time in 4 years, completing a $259 million forward equity offering. We started 3 new build-to-suit developments totaling $326 million and 6 others reaching stabilization during the quarter.

With our capital already at work and our path forward clearly defined, we believe we enter the fourth quarter well positioned to deliver on our full year guidance and to carry our momentum into 2027.

During the third quarter, we invested $236.6 million, comprised of $63.8 million in a single industrial acquisition, $137.1 million in build-to-suit developments, $35.1 million in transitional capital and $0.6 million in redevelopment. The acquisition, an approximately 544,000 square foot industrial property was completed at an initial cash capitalization rate of 7.7% with a 15-year lease term and 2% annual rent increases, resulting in a straight-line yield of 8.8%.

The 3 build-to-suit developments we started this quarter totaled $325.8 million of estimated project cost at a weighted average initial cash capitalization rate of 8.4% and a straight-line yield of 11.3%. In addition to our Colorado project, we started 2 retail projects in Manor, Texas for Hobby Lobby and Academy Sports. As noted earlier, we stabilized 6 build-to-suit developments during the quarter, totaling $95.3 million of estimated total project investment at a weighted average cash capitalization rate of 7.3%.

Additionally, subsequent to quarter end, our $115 million Southwire project reached stabilization with a first year cash capitalization rate of 7.8%, adding to the success of the quarter. Today, our in-process build-to-suit pipeline now stands at approximately $456 million, of which approximately $150 million has been invested, leaving approximately $306 million of remaining estimated investment.

From that in-process pipeline, we expect approximately $36 million of incremental annualized base rent to come online between the fourth quarter of this year and the end of 2027. Approximately $2 million of that arrives in the fourth quarter, approximately $31 million arrives in the first half of 2027 as Colorado and other projects reach rent commencement and the balance follows in the back half of 2027.

That equates to over 8% growth on our current ABR of $449.5 million from projects that are already committed, under construction and capitalized, providing a degree of forward visibility into growth that is rare in our space.

Our in-place portfolio continues to perform as designed. We ended the quarter approximately 100% occupied on a square footage basis with all but one of our 767 properties subject to a lease. And as of the date of our release, we had collected 99.9% of base rents due for the quarter.

We also remained active with dispositions, selling 3 properties during the quarter for gross proceeds of $12.5 million at a 6.6% capitalization rate. That brings our year-to-date total to 13 properties sold for gross proceeds of $86.7 million at a weighted average capitalization rate of 6.3% on tenanted properties.

Project Triboro remains a key priority for us, and we remain cautiously optimistic that we will achieve the 2026 goals we set out for this project at the beginning of the year. Ryan will provide a more detailed update shortly, including our progress towards this year's major milestones.

On the capital front, we took a significant step this quarter, completing our first public equity offering in 4 years, selling 12.65 million shares at $20.50 per share for estimated gross proceeds of approximately $259 million in connection with forward sale agreements. Together with approximately $167 million of forward sales under our ATM program at a weighted average gross price of $20 per share, we now have approximately $409 million of expected net proceeds from unsettled forward equity.

That capital positions us to fund our committed pipeline regardless of the ongoing volatility in the capital markets. Our approach has not changed. We will remain disciplined and opportunistic across all of our capital sources, and we will continue to match fund our investments. Kevin will take you through the details of our balance sheet and funding plan in a moment.

Based on our year to-date performance and the visibility our build-to-suit pipeline provides, we are reaffirming our full year 2026 AFFO per share guidance of $1.55 to $1.57 with a midpoint of $1.56, representing nearly 5% earnings growth over 2025, and we are raising the ranges for both investments and dispositions.

The momentum we are carrying into the fourth quarter and 2027 is the product of years of disciplined execution, deliberate portfolio construction and a build-to-suit platform and differentiated growth strategy that is delivering at scale. I am excited about what we have in front of us and happy to hand the call over to Ryan and Kevin, who will each walk you through more of what is driving our confidence.

Ryan Albano

Thank you, John, and good morning, everyone. This quarter showed our platform working at scale. We started $326 million of new build-to-suit developments, stabilized another $96 million and continue to advance our redevelopment projects in Project Triboro.

Let me walk you through where the pipeline stands today, how our in-place portfolio is performing, our redevelopment activity and then provide an update on Project Triboro.

Starting with the pipeline. As of today, our in-process build-to-suit investments now total approximately $456 million across 7 projects, roughly 83% of which are industrial. The pipeline carries a weighted average estimated cash yield of 8%, a weighted average straight-line yield of 10.4%, supported by a weighted average lease term of 14.8 years and annual rent escalations of 2.7%. These are tenant-driven, mission-critical developments structured from the outset to mitigate the risks that typically accompany ground-up development.

The 6 projects we stabilized this quarter, 2 industrial and 4 retail, are now contributing to ABR and several more are expected to follow close behind. Our Southwire facility in Bremen, Georgia, a $115 million, 1.2 million square foot project, also reached stabilization this month, and our Academy Sports project in Magnolia, Texas is targeted for November.

Turning to our in-place portfolio. Occupancy was approximately 100% on a square footage basis at quarter end. Third quarter same-store rental revenue grew 0.7% year-over-year. Contractual rent increases contributed 1.9% of growth across our same-store portfolio, including 2.1% for industrial. The headline number was held back by approximately $1.2 million of prior year rent from 2 industrial properties that are now under redevelopment. Excluding those 2 properties, same-store growth would have been approximately 1.9%, in line with our year-to-date growth.

We have had strong execution year-to-date on both 2026 and 2027 lease renewals, achieving a 111% recapture rate. As we look ahead to 2027, our track record gives us confidence in both managing upcoming expirations and finding opportunities to create value through our redevelopment efforts.

Redevelopment continues to be a differentiated source of value creation. Our first project, the conversion of a functionally obsolete office asset in the Chicago MSA into approximately 156,000 square feet of industrial space is progressing. Total estimated project investment is approximately $17.9 million, of which approximately $3.7 million has been invested to date. The property carried original ABR of approximately $1.4 million, and we expect stabilized ABR of approximately $2.7 million with substantial completion targeted during Q2 of 2027. We are in active conversations with multiple prospective tenants who are potentially interested in this property.

Our second project is our Hoffman Estates, Illinois property, which we moved into redevelopment at the start of the third quarter after evaluating re-leasing the property, a vacant sale and several redevelopment scenarios prior to the lease term ending. We estimate a total investment of approximately $28.4 million, including the property's remaining basis and plan to repurpose the existing structure. Target stabilization is anticipated for Q3 2028 with estimated stabilized ABR of approximately $3.3 million, in line with the original property ABR while significantly reducing the office component of the building square footage and meaningfully improving the quality of the building and overall value.

Now turning to Project Triboro. As a reminder, this is a large site in Northeastern Pennsylvania, more than 550 acres of land with a committed 1 gigawatt power supply. We have approximately $154 million invested in the project as of September 30. As you all have heard many times before, we do not underwrite Project Triboro as a single outcome investment and each of the 3 distinct paths create real value for shareholders, monetizing the land in the near term, building a hyperscale data center campus or building 4 large box industrial buildings. We have continued to invest in this opportunity while creating value and maintaining optionality for all paths forward.

On site work, we continue to progress horizontal activity that is common to both an industrial and a data center development. and the first of 4 building pads is nearly ready for vertical construction. Various stages of horizontal work continue across the remaining land.

On power, we continue coordination efforts with PPL and are in the process of finalizing our ESA and CSA. Our on-site substation design and engineering continues to progress and time lines remain intact for the initial power delivery anticipated during the first half of 2028.

On zoning, we have continued to engage in constructive dialogue with the borough to advance the project under consideration and address the concerns of the borough's residents. In all cases, we expect clarity on zoning, power and tenant demand this year, which supports our target of deciding among our 3 paths by year-end. We remain very excited about the value creation opportunity that Triboro represents and look forward to communicating our progress in the near term.

With that, I'll turn the call over to Kevin.

Kevin Fennell

Thank you, Ryan. During the quarter, we generated adjusted funds from operations of $77.8 million or $0.39 per share, representing a 5.4% increase over the third quarter of 2025. Results benefited from same-store rent growth, recent investment activity and from build-to-suits reaching stabilization.

General and administrative expenses were in line with expectations with core G&A of $7.4 million, trending towards the low end of our full year guidance of $30 million to $31 million.

With respect to the balance sheet, we ended the quarter with total debt of $2.9 billion and pro forma net leverage of 5.4x, down from 5.9x last quarter, reflecting the forward equity we raised that we intend to settle alongside rent commencements in future quarters.

Between the August offering that John already highlighted and our ATM activity, our total outstanding expected net proceeds from unsettled forward sale agreements were approximately $409 million as of September 30.

On our last call, we also discussed our new $300 million senior unsecured delayed draw term loan, and we have drawn $100 million to date. Additionally, with $428.8 million available on our revolving credit facility at quarter end, we have over $1 billion of in-place liquidity available to fund the $337 million of remaining estimated investment in our build-to-suit projects as well as additional opportunities. Looking ahead, we will continue to assess all potential sources of funding, managing around a pro forma leverage target of 6x.

Last week, our Board of Directors increased our quarterly dividend by 1% to $0.295 per share, payable to holders of record as of December 31, 2026, on or before January 15, 2027.

Now turning to guidance. Given our year-to-date performance and the visibility from our build-to-suit pipeline, we are reaffirming our full year 2026 AFFO guidance range of $1.55 to $1.57 per diluted share. This guidance is based on investments of $700 million to $800 million, revised higher from $600 million to $800 million; dispositions of $150 million to $200 million, revised higher from $100 million to $150 million; and no change to total core G&A expenses of between $30 million and $31 million. Given our portfolio performance to date, we are also reducing our bad debt assumption to 25 basis points.

As always, it is worth reminding everyone that our per-share results for the year are sensitive to the timing, amount and mix of investment and disposition activity as well as any capital markets activities that may occur during the year. Our guidance now includes less than $0.005 per share of estimated dilution from approximately 350,000 to 600,000 weighted average shares related to our outstanding forward equity under the treasury stock method. Please reference last night's earnings release and supplemental for additional details.

And we will now open the call up for questions.

Operator

[Operator Instructions] Your first question comes from the line of Eric Borden with BMO Capital Markets.

質疑応答

Eric Borden

The first question is just on Triboro. It's encouraging that you're still working towards a decision by year-end. But as you sit here today, which of the remaining items is most important to determining that path forward, whether it be zoning, the power agreements or getting a tenant commitment?

John Moragne

Thanks, Eric. It continues to move forward. We've had really good, as Ryan said, constructive dialogue with the borough, trying to make sure that we're going about this the right way and responding to local resident concerns and providing sort of the best possible sort of mutually beneficial answer for this moving forward.

I think we've heard us say all year that there's 3 things here. There's zoning, there's power and there's the tenant. And I think in terms of order of priority, they fall in that order. We can't have the conversation around power or the conversation around the tenant unless we know for sure that we've got the data center zoning squared away. So that's where a lot of our attention has been.

That's not to say that we haven't continued to work constructively with PPL as they think about their transmission distribution lines, the construction of the substation that's going to be on the property, the ESA and CSA, as Ryan had said, and that we have not continued to have good sort of preliminary dialogue with potential tenants. But of course, the tenants are waiting for that zoning to be taken care of.

So the most important thing for us is to have that tenant -- excuse me, the zoning squared away. And our expectation is that, that should happen by the end of the year, and then we can move forward with the other 2 pieces in short order thereafter.

Eric Borden

Great. And then maybe just switching gears a little bit to looking ahead to 2027. I understand that you're not providing guidance, but the rent commencement schedule gives us a helpful starting point. But how should we think about the main offsets between your embedded rent growth and the AFFO per share growth? I understand that interest expense and G&A are large contributors, but curious if there's any other offsetting factors there.

Kevin Fennell

Eric, it's Kevin. I think you've got them pretty well targeted. A variable that seemingly changes every day, certainly every week, is the interest rate environment. And so that's one we'll get sharper on as we move across the calendar year, but you've got the right ones to be focused on.

Operator

Your next question comes from the line of Anthony Paolone with JPMorgan.

Anthony Paolone

I'd probably just start with just cap rates and yields, both for your pipeline of developments and what you're seeing on the acquisition side and whether you can comment as to what the adjustments so far have looked like or where you think things need to be for you to greenlight a new project?

John Moragne

Yes. So obviously, with everything that's changed in the last 90 days in terms of interest rates and overall market and transaction activity, we're seeing what everyone would expect. There's a bit of a slowdown. There's a flight to quality. We, as you know, are not participating in a meaningful way in the heavily marketed deal flow that's out there. What we are seeing is sort of expectations for good solid deals are probably up 25 to 50 basis points, deals that may have priced and executed previously that are more highly levered PE-backed. In a lot of cases, there's no bids. They're not trading.

So that's why, for us, as I said during my remarks, our strategy is specifically designed for an environment like this. As sort of the volatility that the transactional market is experiencing, we're still looking down at an in-place build-to-suit pipeline of more than $400 million that has really attractive yields on it, both upfront initial cash yields as well as straight-line yields.

We continue to see good opportunity in the build-to-suit space, and we're working towards executing on a handful of new ones that we hope to be able to do in the next couple of quarters to continue filling out that ladder of build-to-suits going into the end of '27 and through 2028.

So we think our strategy is well designed for this. We're still seeing good opportunities for value, and we think the way that we have built this strategy with the focus on the long-term accretive growth of those build-to-suits and then filling it in with relationship-based direct off-market opportunities on the acquisition side, the more traditional acquisition side, is going to be a winning formula going into 2027.

Anthony Paolone

Got it. And then you've talked about in the past just leaning more towards a bit more self-funding through dispositions of the things you develop over time. And I was just wondering if you think that's been impacted by the change in the rate environment. And in particular, I think you're now in the clear-to-sell zone on UNFI. And I think that's been one in the past you've talked about that could be a potential large source of capital at an attractive price. And so any implications there to the thinking with the change in the environment?

John Moragne

Yes. So I may actually just start with sort of how we're thinking about what we have in place right now from a dry powder standpoint. We've got $500 million or more of dry powder in hand right now that we can deploy into good, attractive accretive investments with an in-place cost of capital based off of the work that Kevin has done this year in the equity and debt capital markets in the low to mid-6s. So we've got dry powder that we can deploy and have it be accretive to earnings. And we don't have to be thinking too strongly about the dispositions like we did in 2023, 2024 when we were working through our portfolio repositioning.

That being said, we are doing more. I mean, as you saw, we increased our disposition guidance for the year. That is both a combination of incremental assets that Mike Caruso and his team have been working on, thinking about selling, finding good opportunities to move them along, and then also sort of the traditional risk mitigation-type stuff that we would do.

Built into that is a bit more of a chunkier one. We are contemplating a sale of our transitional capital investment in our Sunset Hills Retail Center. So that is a big piece of why we increased the guidance for the year. If we execute on that, we'll be able to redeploy that into the existing pipeline as well as sort of pair that up with the capital that we've got from a dry powder standpoint.

So I just want to emphasize, first and foremost, that we've got plenty of dry powder that's at a great cost of capital for us to redeploy accretively into the investments that we're seeing, particularly our build-to-suit pipeline. And then we have the flexibility to go out and drive more through our disposition strategy, which -- it was real nice when the sun was shining on us for a couple of months there over the summer, but we've been controlling our own destiny through sales and other activities to provide our funding for the last 4 years. So this isn't -- nothing new for us.

Operator

Your next question comes from the line of Jay Kornreich with Cantor Fitzgerald.

Jay Kornreich

I wanted to ask about the Colorado development. Has there been -- or within that about the potential for the second building on the site there. I guess, have there been discussions with the tenants that have progressed since the original announcement or any visibility into that potential second building materializing?

John Moragne

Yes. So we've continued to have conversations with that tenant about sort of Colorado 2.0 and doing the next one. No decision has been made. As I've said to investors for a while now, I think they continue to be in a place where they want to make sure that, that project is going to go well. We are providing the vertical construction, the powered shell construction. We're not doing the MEP work. That's going to be on the tenant. And so the tenant also has substantial work that they need to be focusing on and thinking about.

So it's a combination not only of making sure that our side of the project executes well. And I can tell you it is right now. We actually started going vertical last week. The site photos are pretty interesting to see that project move along at a much faster clip, given the prefabricated construction that's at play there versus some of the other tilt-wall construction that we've been seeing in some of our other build-to-suits. So it's been super interesting for us. But I think that's probably a 2027 decision at some point for that tenant, and we're cautiously optimistic that they'll move forward with it.

Jay Kornreich

Okay. I appreciate that. And then just in terms of the amount of unsettled forward equity and thinking about the timing of when you settle that, should we expect that to be more of a match funding approach with the completion of developments or a more ratable approach as you're providing capital along the process of developments?

John Moragne

Match funding along completion is a more reasonable assumption. I'd say sort of mid-quarter convention around that is probably pretty reasonable.

Operator

Your next question comes from the line of Caitlin Burrows with Goldman Sachs.

Caitlin Burrows

Maybe just on the build-to-suit pipeline of future deals. I realize that the cadence of those announcements can be lumpy, but I guess the last 2 now were in August. So I was just wondering if the interest rate volatility has impacted that in-process discussion. And when you think of the customer and why they're working with you, I imagine it's because they want to grow their business. So have their own plans changed? And how sensitive are they to shifts in your required returns?

John Moragne

It's a little bit of both. I think we are seeing some situations where the tenants are taking a little bit more time to think through their decisions. So that's not a surprise, given the shift change in interest rates and how they're thinking about financing alternatives relative to the build-to-suit and the cost and all those things. So it's not surprising. The conversion time line on build-to-suits is always long. So we're never banking on those things moving at a very fast clip.

And then on the flip side, our financing equation changed as well dramatically in the last 90 days. And so we went back and had some difficult conversations with some potential deals to make sure that we were getting the appropriate pricing relative to the way that we're thinking about our in-place cost of capital and opportunity costs and all those things. And so there are a handful of deals that we decided not to pursue any further because it just wasn't going to work and we couldn't get to a place where it made sense.

All that being said, the pipeline is still robust. We are still seeing good opportunities. There's lots of things that we're excited about and hope to have some announcements in the near term to put out there as long as we can find a way for both sides to get comfortable with making sure that the economics continue to work in a fairly changing volatile world.

Caitlin Burrows

Got it. Okay. And then just I saw, it looked like a couple of developments actually stabilized earlier in the third quarter. So congrats on that. I guess I'm wondering if there's anything specific to call out on what drove it and if it could be repeatable. But also as we think of the full year guidance, you also mentioned that you lowered bad debt. So wondering if there was any offsetting factors that we should consider in terms of why the AFFO guidance was not moved.

Kevin Fennell

I think on the timing piece, Caitlin, it's sort of project specific. You've seen us be more or less plus or minus 45 to 60 days from our original estimates. We do our best to tune those in as we get closer to completion. I don't know if there's anything thematic to call out on that piece. And on the guide, the treasury stock piece of this equation was less than $0.005, but when we're talking about a guidance range of $0.01 to $0.03, that's certainly a contributor to sort of holding the line on the range.

Operator

Your next question comes from the line of Upal Rana with [ Key ].

Upal Rana

Kevin, you have some debt maturities approaching and some existing swaps rolling off. How are you weighing refinancing early, extending hedges or retaining floating rate exposure there? And what kind of increase in the all-in borrowing cost should we anticipate to underwrite in our models?

Kevin Fennell

Yes. Look, I think the name of the game on that front has been be opportunistic. You saw us last year go in September, we're always evaluating longer and fixed. Naturally, in this environment, we're staying shorter. I think our floating rate exposure is probably bouncing between 20% to 30% of total debt, and that's probably not a long-term target. And so with the swaps rolling as well, there's definitely incremental exposure [indiscernible] as it relates to sort of total headwinds, that's sort of a future decision.

I think the maturities we have, we have control of. We have the delayed draw term loan to handle them. We have a very supportive bank group on the back end of the year if we needed to think about that one differently. But the opportunistic piece for us is still in play, thinking about longer and fixed, so 7- to 10-year options at, call it, 110 over to 125 over as the marginal debt cost. It's not an unreasonable assumption. But in the very near term, I would say staying shorter and floating is probably a clear answer.

Upal Rana

Okay. All right. That's helpful. And then maybe on Triboro, I'm sure you've had plenty of conversations with potential tenants. Is there anything you can share on some of the conversations you are having? Is there anything particular they're looking for or asking for as it relates to the property or lease or anything that they're concerned about from the executive order that it's requiring?

John Moragne

Conversations have been constructive. I would continue to characterize them as very preliminary. People don't want to spend a huge amount of time digging into all the details and negotiating a lease until they know that it actually can be a data center. So that's why we're focused on getting the zoning done first and foremost. And as I said, we continue to be cautiously optimistic about that for this year.

But the thing that we have heard and we continue to see is that demand is not dropping. We are continuing to hear from tenants that they have real demand for these types of projects, and they're looking for these types of assets. One of the things that has positioned us, we think, and we hope to be in a much better position than others, is that we have continued to pursue the horizontal site level work on this.

So in terms of being able to sort of hit the gear a little bit harder to shift it from the work that we've done today to starting construction on the substations, the initial buildings that would be a part of Phase 1, and getting to delivered power sometime in 2028, we think, positions this asset incredibly well, relative to the demand that we are hearing continue to exist and the interest that we're seeing from tenants on a preliminary basis.

Operator

Your next question comes from the line of Linda Tsai with Truist Securities.

Linda Tsai

Versus 90 days ago, has the general line of thinking with respect to the ideal outcome for Project Triboro changed, given the shift in your cost of capital?

John Moragne

Yes. I mean, ideal outcome in terms of the -- you heard from Ryan, we continue to think about this as having a really strong backstop with the industrial build-to-suit that we initially underwrote this for. So if things don't move forward the way that we hope that they will or expect them to, we can always pivot back to 4 million square foot industrial facilities, and there's been continued interest from industrial build-to-suit in that market. So we feel good about the backstop.

And then as you've heard us say for the last year, if it is something that can move forward as a data center, we're looking at either selling it or continuing to move forward with it as a powered shell construction. I think the clarity that we've had over the last 90 days is really in terms of if it does move forward as a data center, there's really 2 paths: we're either selling it or we are going to find a private capital solution to fund it.

The idea that there might be public equity that we can raise around this off our balance sheet to be able to fund this, I think that's kind of off the table at this point, both in terms of the size and in terms of what we've seen from the market in the last 90 days. When you move forward with the project, it's going to be in the multiple billions of dollars on a project budget basis, you got to have some certainty around where that money is going to come from. We don't have a lot of confidence right now that we'd be able to do that from the public equity markets. So we're either selling this project or we're going to find a private capital solution for it.

Linda Tsai

Are there a lot of interested parties from the private capital solution perspective?

John Moragne

Yes. There is a huge amount of interest in continuing to fund these things that is coupled up with the continued huge amount of demand for projects like this. So I think that with projects that are looking at delivering in back half of ' 27 and into 2028, like you're talking about with the initial phase delivery on power for Project Triboro and similarly situated ones where they've done the work on the site level that Ryan and his team have been continuing to advance, there's ample capital that's out there looking to be deployed into projects just like this.

Operator

Your next question comes from the line of Michael Goldsmith with UBS.

Michael Goldsmith

You lowered the full year bad debt assumption again to 25 basis points, but you also had this $2.9 million net write-off of accrued rental income this quarter. Can you walk us through what drove that write-off, whether it was concentrated with one tenant and whether there's any accrued rent exposure associated with that tenant?

Kevin Fennell

Yes. Those 2 things are actually unrelated. The accounting around that rental income write-off is more about a situation where we have some small industrial assets we're working with a tenant to move out by the end of next year. And so the original lease term there was 11 years. This is simply a function of shortening that lease term, and we'll work through them, little to no impact this year or next year around that event. And so those are sort of 2 separate occasions.

Michael Goldsmith

Got it. And then you mentioned 111% recapture rate on the '26 and '27 renewals completed year-to-date. You still have 7.1% ABR scheduled to expire next year. So as you start to approach that, is that the right recapture rate that we should expect next year? How have the negotiations been going so far?

Kevin Fennell

Negotiation is going well. Mike, as you know, we start working on a lot of these lease rolls 2 to 5 years before we get to the end of the term. So we usually have a pretty decent idea of where those things are to go if we're going to be re-leasing to a new tenant, exercising an option -- the tenant exercising an option, having a vacant sale where we're looking to redevelop or do something different. So the team was working on 2027 as early as '24 and '25.

So we feel pretty good about where we think all of these are going to head. I'd love to say that you should expect 111%. But I think if you look back historically, our low to sort of mid 102% to [ 104% or 105% ] is really a bit more in line with sort of reasonable expectations because often, we're going to be in a situation where the tenant is going to have the option to renew at like 2% or 3% or whatever it is. And so if we can come to a better solution from there, that's great, but they always have the fallback of just hitting their option and continuing to hold at sort of increasing from whatever the sort of standard lease increases.

So 111% is great and kudos to our team for being able to find some really great solutions and positive outcomes on our lease rolls for this year. And hopefully, we continue to see opportunities to do that in some discrete situations in the future. But I think it's more in that low 100% range that we should be setting expectations around.

Operator

Your next question comes from the line of Ryan Caviola with Green Street.

Ryan Caviola

Maybe one on Broadstone's appetite to do more data center developments in the future. Obviously, great news on -- great updates on Triboro today. But in general, it seems getting into data center development from start to finish today is a bit harder than it was at the start of the year. Does your team view it that way? And does the complexities associated with these offset by the attractive yields?

John Moragne

Yes. I mean we've -- right now, I think our appetite is really squarely around Colorado 2.0. We'd love to see that come through. We hope that, that's something that we'll see in 2027. We've got fantastic partners on Triboro in Sansone and Emergent, and they, of course, are continuing to look at other opportunities around the country. Whether or not there's a role for us to play, I think, is up in the air. These are very large capital commitments. They are very large projects.

And so the ability for us to play a role will be very project dependent on any of those things. But there's nothing that we're talking about right now that is material enough for us to be sort of talking about, but it really will be very project dependent, and we'll see where things go. Like I said, we've got great partners. We're very pleased with what we see in Colorado and what we're working on with Triboro.

Ryan Caviola

Got it. That's helpful. And then with midterms next week, figured I'd throw in one on onshoring. I know we've talked on it before, but with trade and industrial policy still evolving, do you think onshoring tailwinds have played out how you expected thus far into the current administration? And does next week's outcome affect any of that?

John Moragne

I think there's certainly a political component to it. We expected after sort of tariff day and some of the efforts by the administration to bring more manufacturing in the United States to drive some additional tailwinds for industrial. And I think that's playing out. I don't know if it's playing out to the same degree that maybe everyone expected at the same -- at the outset of this.

But then I think beyond the political sort of component to that, there's also sort of the tailwinds of the shifting views that a lot of the industrial and manufacturer folks have had coming out of COVID, where they just knew that they needed to rethink their supply chains to make sure that they could continue to provide revenue for their businesses and not run into the problems that we've seen from sort of geopolitical issues or from sort of pandemic era-style COVID supply chain issues.

So there's both, I think, the political tailwind that helps a little bit, and then I think there's more of a secular market tailwind where people are looking -- businesses are looking at their supply chains and wanting to make sure that they're as resilient as possible here domestically, and not having to rely as much on international shipping lanes.

Operator

Your next question comes from the line of Ronald Kamdem with Morgan Stanley.

Ronald Kamdem

Great. Just want to go back to the pipeline and the thinking of advanced manufacturing or data centers and so forth. One, I was just curious in terms of are there any sort of larger deals, larger conversations that are happening on that front? And then two, some comments on construction costs. I know you guys do hedge a lot of it, but we've heard steel, we've heard other stuff, but I'd love to hear some comments on construction costs or any parts or any shortages.

John Moragne

Yes. So I think I would point back to my earlier answer on sort of the advanced tech and sort of data center stuff. We're kind of full up with what we're working on right now. We're always open to new accretive opportunities in the future, but we're very pleased with where we have Colorado and where we have Triboro. There are some larger build-to-suits outside of that context that we're continuing to look at. And hopefully, we'll be able to land a few of them, but time will tell as we can work through that.

On a construction cost basis, construction costs are certainly up, but that's just provided an opportunity to make sure that we are pricing things appropriately and that rents are getting set at the right levels, depending on if you're talking about hard costs or overall project budgets, maybe we're somewhere in the 10% to 15% increase at this point. And so that, as I said, just sort of necessitates the conversation around how are we thinking about pricing this, how are we thinking about rents, how are we thinking about residual values and cap rates on the front and back end of these things.

So it's a dynamic place to be right now as it's changing very quickly, and we're making sure, and referring back to my comments earlier on sort of the pipeline itself, that as our tenants are taking time to think through whether or not these projects are the right thing for them to do, we're doing the same thing. Not every project is going to make sense. And so making sure that we are prudently allocating the capital that we have to the projects that we think are going to be the most accretive and earnings powerful in the future is where we're spending our time and attention.

Ronald Kamdem

That's helpful. And then just in this -- going back to sort of the regular way acquisitions, sort of post the interest rate move, you guys have always been pretty selective. But do you think that maybe this would shake up more opportunities for BNL here? Just some thoughts on just regular way acquisitions as well.

John Moragne

Yes. We have been very selective for a long time. We will continue to be. There's very little that we move on in terms of regular way deal flow anymore. We always make sure that we can stay in touch with it, and we're in contact with all the brokers and making sure that we understand what's happening. If there's ever a good opportunity that's out there, we want to make sure that we're part of it.

But our strategy is really focusing on these long-term value-creating build-to-suits and then finding opportunities to find direct off-marketed deals with our existing relationships that we can deploy capital more accretively. And if you're looking at an environment where their cost of capital has changed a little bit, financing markets have changed a little bit, depending on how banks are thinking about lending, what the brokers are seeing, what the appetite is for people to be able to deploy capital that are the other participants in the net lease market, maybe that shakes out a few direct deals for us as people are looking for surety of execution as opposed to having to work their way through a more heavily marketed process. So we're hopeful.

Operator

Your next question comes from the line of Mitchell Germain with Citizens JMP. Your next question comes from the line of Michael Gorman with U.S. Bancorp BTIG.

Michael Gorman

Maybe just taking a different perspective on the Colorado project and Project Triboro. Obviously, these are large developments, large projects. But maybe outside the capital costs, like pretty quickly, they scale from an income perspective, right? So if my math is correct, kind of straight line, Colorado comes online at about 7% of NOI-ish. You sound optimistic about building 2 there and then whatever the outcome is for Triboro. How do you think about exposure to this kind of new category of tech just from a portfolio management perspective as these kind of 2 projects continue to move forward?

John Moragne

Yes, great question. We spend a lot of time thinking about it because they are an outsized portion of the way that you would think about our tenant mix on a traditional way. Our Colorado tenant is going to be 6% or 7% based on -- depending on sort of how we think about our forward other build-to-suit and acquisition pipeline.

Now with the quality of the tenants that we have there, I'm quite happy to sit at 6% or 7%. If they want to execute on Colorado 2.0 or what have you and move it into the double digits, I'm also very happy to do that. But these are large projects, and I think we have to think a little bit differently with Triboro, and that maybe harkens back to my commentary around how we're thinking about financing it.

We can do Colorado. And if we end up being lucky enough to have Colorado 2.0 move forward, being in that 6% to 12% range is fine. I'm not worried about it with that tenant in that project. Project Triboro is sort of its own thing. It's a bit of a Supernova. And as I said, based off of the way that we're currently thinking about how you fund that project, you are either -- we are either selling it and then taking those proceeds, delevering and then redeploying it into our core verticals or we're going to find a private capital joint venture solution for it. And at that point, in terms of tenant concentration, it will be far lower than what it would be if you're thinking about it more of on a headline fully on balance sheet number.

Michael Gorman

Got it. That's helpful. And then maybe just pivoting, for the other growth avenues, whether it's revenue-generating CapEx or maybe traditional -- sorry, transitional capital or anything, what's the financing environment like for your tenant base? I imagine they're seeing some of the same volatility that you are. And is that opening up additional opportunities in some of those other growth avenues, whether it's helping with expansion or CapEx?

John Moragne

Yes. Their cost of capital and their financing opportunities are changing sort of in step of the way that we're thinking about it. There are places where, depending on are they pricing off of 10-year, are they pricing off of SOFR, there's been significant differences in the volatility there. The 10-year, depending on the day, is up, whatever, 60 or 80 basis points relative to the beginning of July. SOFR is up -- I don't know, it was 20 basis points the other day or something like that.

So depending on how you're thinking about pricing these things, if you're doing an ABS facility or doing something else, there are alternatives, but the build-to-suit structure helping from a revenue-generating CapEx with existing tenants, because we already own the asset, continues to provide, in most instances, we think, an attractive alternative to anything else that's going to be out there. And so we continue to have constructive conversations about deploying capital into all those potential verticals.

Operator

Your final question comes from the line of Eric Borden with BMO Capital Markets.

Eric Borden

Just on Project Triboro with the first pad nearly ready, is there an opportunity to move forward with an industrial building on part of the site while preserving the ability to pursue a data center development on the balance? Or would the site layout infrastructure requirements make that path -- make those paths mutually exclusive?

John Moragne

We would not pursue -- if it moves forward and you have data center approvals from a zoning standpoint and you have the power and the interest, we wouldn't move forward with an industrial site on it because any of the hyperscale tenants that are looking at that project want all of it. They want all of it and then more. So we would not put industrial on it to start.

The only way that we're going to be putting industrial on those 550 acres is if we end up having to pivot towards the industrial. But as I said, we're cautiously optimistic that we'll have this resolved by the end of the year. And so hopefully, then we're moving fairly quickly to the conversations on power and tenancy.

Eric Borden

Okay. And then just in the event that you do have to shift towards an industrial build-to-suit or development, would that be on a spec basis or on a -- would you like to have the tenant in hand before moving forward with that project?

John Moragne

We'd always love to have tenants in hand before moving forward. But given the demand that we know that exists in Northeastern Pennsylvania for this type of large-format box, we'd be very comfortable continuing to move forward, including even going vertical on some of these assets if we needed to.

Operator

There are no further questions at this time. I will now turn the call back to John Moragne for closing remarks.

John Moragne

Thanks all for joining us today, and we're looking forward to seeing many, if not all of you, in Atlanta at Nareit in a few weeks. Enjoy the fall. Thanks.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.