-- 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%