Australia
Broadstone Net Lease, Other Triple Net REITS Likely to Post Lower Q1 AFFO Growth From Prior Quarter, Morgan Stanley Says
Broadstone Net Lease (BNL), FrontView REIT (FVR) and other triple net REITS are projected to post Q1 growth in adjusted funds from operations of 1.9%, down from 3.5% in the previous quarter, Morgan Stanley said in a Tuesday note.These REITs benefit from long-term leases of 10 to 30 years with a diversified set of tenants, strong balance sheets, and attractive dividends yields of 4% to 7%, the Morgan Stanley analysts said.Broadstone Net Lease is expected to have 4.1% growth in adjusted funds from operations for 2026 to 2027 according to consensus, surpassing its peers' expected average of 3.8%, the analysts said. The figure is backed by a visible build-to-suit development pipeline, with potential upside from Project Triboro, according to the note.FrontView REIT is also projected to beat peers' average with an estimated 4.8% growth in adjusted funds from operations in the same period, the analysts said. A delayed-draw convertible perpetual preferred equity investment, led by Maewyn Capital Partners. de-risks estimated investment funding for 2026, the note said.Triple net REITs outperformed the broader REIT sector with 12% year-to-date gains compared with 10.9%, while trading at a -30% multiple discount, the analysts said, adding that they see value in "proven operators with discounted multiples."Morgan Stanley raised Broadstone Net Lease's price target to $24 from $19, and FrontView REIT's to $18 from $14, while maintaining both stocks' rating at equal-weight.Price: $19.89, Change: $-0.15, Percent Change: -0.72%
$BNL$FVR