Chris Czarnecki, president and CEO of Broadstone Net Lease, Inc. (NYSE: BNL), participated in a video interview at Nareit’s REITworld: 2022 Annual Conference held in San Francisco on Nov. 15-17.
Czarnecki discussed how Broadstone’s portfolio has been growing and performing in the current economic climate. He noted that the REIT has guidance out for more than $900 million of acquisitions, which are either under control or are closed at this point. The company also saw 100% rent collections through the end of the third quarter.
Czarnecki also explained the importance to Broadstone of maintaining a diversified portfolio. In 2022 that has allowed the REIT to pivot as cap rates have changed. In the first quarter, the focus was on restaurant and retail space, he said. Since then, Broadstone has done a lot more in the industrial space.
“We’ve seen better risk-adjusted returns in the industrial space in the back half of the year as cap rates have widened out. That’s been a net positive for us to be flexible and pivot into industrial when other asset types have not been as responsive to cap rate changes and changes in cost of capital,” Czarnecki said.
Looking forward, Czarnecki said he does expect cap rates to expand into 2023. “I think they have to based on what we’re seeing from a rate environment and from an economic environment.”
Czarnecki also commented on the proactive steps the REIT has taken to shore up its balance sheet, noting that the company had a $1.1 billion liquidity position at the end of the third quarter. “We’re really well positioned,” he said.