Hello and welcome to Broadstone Net Lease's quarterly update call, recapping the first quarter of 2020. My name is Dan Blasi, and I serve as Vice President of Investor Relations here at Broadstone Net Lease or BNL. .

As a reminder for today, the following presentation may contain forward-looking statements regarding, among other things, our plans, strategies, and prospects, both business and financial.

Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize those objectives. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the dates indicated.

The information included in the -- in this presentation and covered during this call is based on the information and disclosures contained in BNL's quarterly report on Form 10-Q and earnings release for the quarter ended March 31, 2020, which was filed with the SEC on Thursday, May 7, and is available on BNL's corporate website at investors.bnl.broadstone.com or by request.

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In a moment, I will hand the reins over to our Chief Executive Officer, Chris Czarnecki, who will deliver a recap of BNL's first quarter of 2020. After Chris, you will hear from Executive Vice President and Chief Financial Officer, Ryan Albano, who will discuss our financial results. .

We invite you to submit questions through the web face -- the webcast interface which we will address at the close of the presentation, along with questions that we have received in advance of today's call. .

Without further ado, here is BNL's CEO, Chris Czarnecki. .

Thank you, Dan, and thank you to everyone joining this important Broadstone Net Lease update call. We are grateful for your continued support as we work through this difficult time. .

Our remarks today will briefly focus on Q1 results along with an update on key portfolio and balance sheet metrics as of the end of the quarter. The remainder of the presentation will focus on updates related to our portfolio's performance in April and May and our response to the COVID-19 crisis.

The presentation was crafted to be a stand-alone document for those that are unable to attend this afternoon's call and is available for download on the BNL website and was filed with the SEC this morning. .

As with most in the net lease space, Q1 collections and occupancy results were strong and consistent, with the timing of COVID-related impacts beginning to fully manifest themselves in April and May. During Q1, the BNL portfolio was 99-plus percent leased, and we collected over 98% who rent due to us.

The 98% figure was slightly below our historical averages and the difference arose from the bankruptcy of our -- one of our large tenants, Art Van Furniture. This tenant event was unrelated to COVID and began to unfold in February and March of 2020. .

Gross AFFO increased 20.2% over the first quarter of last year.

This was mainly reflective of the contribution provided by the large industrial portfolio acquisition that we closed during the third quarter of 2019 combined with the effects of annual rent escalations on our same-property portfolio and the cost savings that we began recognizing during this quarter under our new internalized structure.

Q1 2020 AFFO came in at $1.41 per share in OP Units. The major milestone for the quarter was the completion of the previously announced internalization of management. The transaction closed on February 7, and 71 skilled professionals joined the company as employees. .

The transaction also led to an immediate cash savings for the REIT, which will continue to grow over time. We will discuss this in more detail in the next slide. .

As the COVID crisis began to unfold, the team focused on several key defensive measures to help prepare BNL to weather the storm. One of the key items was a focus on enhancing BNL's liquidity. Through several important steps, cash on hand increased to $93.2 million by quarter's end with additional capacity on our unsecured line of credit.

Total available liquidity at quarter's end was approximately $144 million. Ryan will discuss our continued focus on enhancing liquidity and maximizing financial flexibility later in the presentation. .

On Thursday of last week, we hosted BNL's 2020 Annual Shareholder Meeting via webcast. This meeting was brief as we are unable to gather in person this year. All of the items in the official business were approved, and the Board has been elected to serve for another 1 year term. Thank you to everyone that voted your shares this year. .

In addition, management provided a brief recap of 2019 activity as it was a robust year in BNL's history. We also reviewed the considerations associated with the decision to pursue an initial public offering in early 2020. The replay of the meeting is available on our website, and shareholders are encouraged to listen and review at their leisure.

We have also included a link to the meeting -- to the replay meeting at the bottom of this page. .

Now let's dig a little deeper on the internalization transaction, which was previously announced in November of 2019 and closed on February 7, 2020. It was an important strategic step for BNL and a very natural one given the company's size and scale. Most REITs of BNL's size are internally managed.

And the transaction, while complicated, has several important benefits for shareholders in both the short and long term. First, the transaction simplifies the structure of the company. Management has now become employees of the REIT and the corporate structure is more transparent and streamlined.

BNL now controls all of its key functions and no longer outsources these to a third-party manager. The second and most important rationale for the transaction relates to the financial benefits to the company and its shareholders.

The transaction provides immediate savings to the REIT by allowing it to operate with an internalized cost structure and no longer having to pay management or transaction fees for these services.

Prior to the internalization, BNL paid management fees to Broadstone Real Estate in exchange for management services with all the personnel residing at the Broadstone Real Estate level. The savings have already begun to accrue in Q1 after the closing of the transaction in February and will be further evident in future full quarters of operations. .

In addition, these financial benefits will only improve as the REIT continues to grow its asset base, which will further enhance the economies of scale. Our FP&A team did a great job building out the graphic in the middle of the page to better demonstrate how impactful the savings are. .

The box on the left is a pro forma analysis of what BNL's G&A expense load would have been had the company-operated under the external management structure for the entirety of the first quarter.

We performed in this analysis because the transaction closed almost exactly at the midpoint of the quarter, which makes quantifying the savings challenging from our financial statements alone. .

Under the external G&A load, the expenses borne by the REIT would have totaled approximately $11.1 million, which is broken down into asset management fees and property management fees, along with operating G&A, which represents expenses that exist no matter the structure.

These expenses include things such as legal and accounting costs, directors' fees and other expenses. .

Moving to the right side of the page, we have included a waterfall chart to bridge from the full quarter external G&A figures to the Q1 actual G&A expenses reported in the financials. Here you can see that the REIT saved approximately $1.5 million during this quarter.

From this point, we have bridged to a Q1 pro forma G&A as if we have been internalized for the entire quarter. As you can see, if we have been operating in this structure for the entire quarter, BNL would have saved approximately $3.7 million in total expenses as compared to the original external management structure.

These savings will only continue to improve as the company grows its asset base and benefits from further economies of scale. It is also important to note that the expense savings outlined here only relate to expenses that run through BNL's income statement.

The REIT has seen additional cash flow savings by no longer paying acquisition and disposition fees to a third-party manager when the company buys or sells a property. Under GAAP accounting rules, these costs were capitalized as part of the transaction, so they did not run through the income statement.

But the cash flow savings are an important -- are important from an operation standpoint. This is another significant source of savings for BNL over the long term. .

Finally, the transaction provides for continuity of management with the 71 team members joining BNL as employees for the long term. We carefully crafted the team to be prepared to manage the portfolio we have today and be ready to tackle tomorrow's growth. BNL now has fully dedicated employees that focus entirely on the management of the REIT.

Hopefully, this slide helps demonstrate why all parties involved in this complicated transaction believe it is highly beneficial for shareholders today and should continue to produce accretive benefits over the long-term as the company grows. .

This next slide was created for a different presentation, but we decided to include it to help explain a little bit more about the team that is now fully dedicated to serving BNL. It also helps demonstrate the depth of the organization that may not otherwise be appreciated.

One of the things that our executive team is most proud of is the tremendous talent we've been able to recruit to the company over the years.

We've utilized our network of -- our national network of contacts to hire professionals that we have had direct personal connections and prior working relationships with to ensure that we have a team that is built to succeed and integrates well with the existing culture of the organization.

We have certainly hired many talented and important team members outside of our network as well. This slide is meant to demonstrate some of the connections that have brought our company together. .

In addition, our senior leadership team has long-dated experience both working for the company and together as a group. This is very important during difficult times such as today as we can rely on our long-standing connections to help deal with complicated issues.

While the internalization is first and foremost a financial decision, the onboarding of an experienced team now fully dedicated to Broadstone Net Lease is another important attribute. .

With that, I will pass the presentation over to Ryan to give a portfolio update and more information on our financial and liquidity profile. I will then pick up the presentation after that and dive into more detailed matters from April and May.

Ryan?.

Thank you, Chris, and good afternoon, everyone. Before I begin, I'd like to thank all of you for joining us on today's call. I hope that all of you are safe while we continue to navigate through these challenging times. .

I'd also like to take a moment and recognize all of our employees for their excellent work during this difficult time. It is truly remarkable that over a weekend, roughly 8 weeks ago, we converted to an almost entirely remote work environment and have not missed a beat. .

Today, I will begin with a brief review of our first quarter operating results and important portfolio activity and finish with a review of our balance sheet and liquidity profile. From there, I will turn it back over to Chris for further discussion related to COVID-19 and some post quarter end matters. .

Looking at our first quarter, we reported strong quarterly results with AFFO of $41.1 million, representing an increase of $6.9 million or 20.2% compared to Q1 of 2019.

This is mainly driven by the contribution provided by the large industrial portfolio acquisition that we closed during the third quarter of 2019 combined with the effects of annual rent escalations on our same-property portfolio and the cost savings that we began recognizing during this quarter under our new internalized structure. .

On an AFFO per share basis, we were slightly down by $0.01 per share when compared to the same period last year. This decrease was primarily due to the short-term dilution caused by the immediate increase in BNL's weighted average shares outstanding resulting from the consideration paid in conjunction with the internalization this quarter.

Upon confirmation of the transaction in February, BNL began recognizing cash flow and AFFO benefits due to the immediate cost savings achieved by operating a REIT with an internalized management structure as compared to the recurring management fees and transaction-based fees incurred under its previous externally managed structure. .

Although the full dilutive effect of the shares outstanding was recognized at the time of the transaction, we expect the continued cost savings to be substantial and translate into accretive results on a per share basis over time as the cash flow and AFFO benefits continue to be recognized.

Further, we expect this accretion will continue to increase as we grow our portfolio and recognize additional economies of scale. .

Given the timing of COVID-19 outbreak and the related business disruption, there was very minimal impact on our first quarter results and portfolio metrics. As such, we've collected substantially all cash rent due from tenants for the month of March. .

After my prepared remarks are complete, I'll turn it back over to Chris for further discussion related to the impacts of COVID-19 on our tenant base and certain portfolio metrics to bring us down to date for April and, in some cases, the beginning of May. .

On this slide, we have highlighted our portfolio diversification with more granularity. As you are all aware, a diversified approach to building and managing the BNL portfolio has been the cornerstone of our strategy and will continue to be into the future.

Having a high degree of diversification by property type and industry and tenant provides a host of benefits, some of which Chris will touch on in more detail during his update regarding the COVID-19 pandemic.

These diversification benefits derisk our earnings profile and, in turn, provide strength and flexibility to our balance sheet and liquidity management. .

With that said, I will now shift our focus to BNL's balance sheet and current liquidity profile. As of Q1, our total capitalization stood at $4.7 billion, with market-based leverage at 45.7%. We continue to employ a mostly unsecured balance sheet with only $111 million of our $2.1 billion in total debt consisting of secured mortgage debt.

This provides us significant flexibility during periods of uncertainty. .

During the quarter, BNL's balance sheet activity mostly centered around the internalization transaction.

As consideration in the internalization, we issued a combination of common shares and OP Units, totaling approximately 2.1 million shares and OP Units, and paid $31 million in cash, translating into an aggregate consideration of approximately $209.5 million, plus the assumption of approximately $90.5 million in debt. .

Concurrent with closing, we refinanced $60 million of the assumed debt with a new term loan and repaid the remaining $30.5 million using borrowings from our revolving line of credit.

After quarter end, on May 5, we provided notice to our lenders of our intention to exercise the first of 2 6-month extension options available under the terms of our 2020 unsecured term loan agreement effective as of August 2, 2020.

Subject to customary conditions and in exchange for a 5 basis point fee, this will extend the maturity date of the loan to February 2021. .

During late March and early April, we took certain balance sheet measures to strengthen our liquidity position and preserve financial flexibility. These measures included proactively drawing $75 million on our revolving line of credit as well as reverting roughly $30 million of cash residing in 1031 exchange accounts to our operating account.

With the incremental borrowings and other liquidity-enhancing moves, BNL has enough cash on hand to cover operating expenses and interest payments on all of the REIT's debt for the next 4 quarters prior to collecting another dollar of rents after March. .

In a few moments, Chris will discuss the strong rent collection activity that we are seeing for April and May, further bolstering our liquidity position as we continue to operate through these uncertain times.

Our robust liquidity profile, coupled with our almost entirely unencumbered portfolio, with secured indebtedness at 2.76%, provides BNL with significant flexibility as we progress forward. .

Now turning our attention to BNL's leverage profile. Historically, we have been operating with leverage in the low 6x range on a net debt to adjusted EBITDA RE basis. During Q3 of last year, we closed a large industrial portfolio acquisition and temporarily raised our leverage profile above the 7x level.

As you will hear from Chris in a few moments, the additional scale and diversification that the portfolio added to BNL has proven beneficial during the recent economic stress exhibited by the current global pandemic.

On the heels of closing this acquisition, BNL implemented a deleveraging plan focused on maintaining our investment-grade credit rating and bringing our leverage back inside 7x. As discussed previously, our deleveraging plan included repaying debt with proceeds from both asset dispositions and new equity raise. .

At quarter end, only 1 quarter after closing the industrial transaction and implementing our deleveraging strategy, we were pacing well ahead of the plan with leverage coming in a touch over 7x. While in the process of executing our deleveraging plan, BNL made a significant strategic decision to internalize as announced in November of last year.

As Chris discussed during the Annual Meeting held last week and in his commentary earlier today, BNL completed the internalization transaction during Q1, immediately providing many benefits to the REIT, including a very meaningful cost savings that Chris outlined at the beginning of the presentation. .

The benefits of this transaction were also highlighted as a credit positive by Moody's in an issuer comment published when the transaction closed in February where, in addition to the cost savings that I had mentioned, Moody's noted that the transaction provides a more simplified structure, eliminating potential conflicts of interest with the manager and enhancing its transparency.

That said, you can see from this chart that BNL's leverage increased in conjunction with closing the internalization during Q1 to roughly 7.25x after giving pro forma effects to the full quarter of cost savings recognized by operating the REIT on an internalized basis. .

We believe the medium and long-term cost savings and credit positives of the internalization far outweigh the short-term and relatively modest increase in our leverage profile. We are also focused on evaluating potential near-term actions to provide for deleveraging the balance sheet inside the 7x level nearly observed at year-end.

Finally, in the absence of any other actions, the temporary suspension of BNL's dividend will naturally reduce leverage inside of 7x in the near term. .

In closing, while we are pleased with our Q1 results, and as you will hear in a moment from Chris, encouraged by our April rent collections, we continue to be cautious about the future impacts of this unprecedented pandemic and are constructively working with our tenants to protect long-term shareholder value.

Given our balance sheet strength and significant diversification within our portfolio, we believe that we are well positioned for a range of market environments ahead. .

With that, I'll turn it back over to Chris for a discussion related to the impacts of COVID-19 on our tenants, information on BNL's determined share value and other strategic matters. .

Thank you, Ryan. I'm now going to turn the presentation to updates on the second quarter portfolio performance. We believe the BNL portfolio has performed well given the current conditions across the country, with many states still on mandatory lockdowns or with significant restrictions on commerce.

The reason we believe we've enjoyed success to date is our highly diversified strategy and approach to portfolio construction. .

As Ryan discussed, the portfolio is very diversified across a variety of property types, geographies and tenant industries, all of which help lessen the impact that any one industry, tenant or asset has on our overall portfolio performance. Through last night, we have received more than 88% of April rents, which is a very strong result.

In addition, based upon ongoing discussions with tenants, we have line of sight to that figure climbing above 90% in the coming week. Our May rent collections sit at approximately 81.8%, which is also very strong given that most industry experts anticipate that May would bring worse results than April as the crisis is more fully realized.

For some perspective, it took us until April 27 to achieve -- to exceed 80% rent collected for that month. .

As you'll see on the following slides, this performance is very strong relative to our peer set and does give us optimism for the months to come. At the same time, our management team and Board are cautious as there remain many, many unknown variables that may play out in the coming months.

We do not know if and how a second wave of the virus will impact the country and potentially cause additional shelter-in-place restrictions. With respect to our tenants, many came into the crisis with reasonable liquidity and strong inventory backlogs that allowed them to continue to operate their business during this period of disruption. .

If the crisis continues, these conditions will likely change and potentially significantly impact their businesses. Finally, government stimulus plans are set to expire over the summer, and this may materially impact the American consumer and, correspondingly, our tenants.

All these risks and others give us pause and keep the team hyper-focused on the downside, risk mitigation and maintaining maximum flexibility. .

The charts at the bottom of the page provide summary data on the status of the rent relief requests received to date. Since the start of the crisis, we have received rent relief requests from approximately 36.3% of the portfolio as measured on an annualized base rent, or ABR basis.

Our cross-functional teams of property specialists carefully evaluate each of these requests and make recommendations to our executive team on appropriate next steps. Each tenant situation is unique and we are taking a disciplined, thoughtful and diligent approach to reviewing each request and discussions with the tenant.

To date, we have declined to provide relief on 14.3% of the requests on an ABR basis and granted some form of negotiated relief to 7.3% of the portfolio, also on an ABR basis. .

To date, these short-term deferrals equate to approximately $1.6 million of rent, with the majority of this being required to be paid back by year-end under the terms of the agreements. The remaining 14.7% of the requests are under negotiation or have gone inactive.

We have qualified inactive requests as one in which the tenant has not followed up on their initial request for some time and rent has continued to be paid as agreed. It is important to note that, to date, we have not agreed to any rent forgiveness or full abatement.

All of the agreements we have executed to date have generally been short-term partial deferrals of rent, mostly in the 3-month range. The deferred rent amounts are then required to be paid back in installments over a period of time.

In certain circumstances, and where appropriate, we have also discussed and negotiated with tenants the early exercise of a renewal option, the restructuring and extension of a lease or a blend-and-extend, as it's known in the real estate space, or other lease enhancements. .

a highly diversified portfolio across a number of different asset types, similar to that of BNL, a high concentration of investment-grade tenants, a high concentration of industrial or office assets and, finally, a high concentration of what is deemed to be essential retail assets, such as grocery, pharmacy or other retail tenants that have continued to operate and maybe even thrived during the pandemic.

Those that have experienced more difficulty during this time tend to have portfolios comprised of high concentrations of nonessential retail assets that rely on social gatherings to be successful. Examples include fitness facilities, movie theaters, casual dining and education facilities.

Ultimately, net lease is still viewed by most industry analysts and investors as a defensive investment and one that can perform well during difficult economic times. As the country begins to reopen, I'm hopeful that BNL and its peer set will begin to see improving portfolio performance. .

We have updated this table to show investors what industries our rent relief requests have arisen from over the past 7 or 8 weeks. As you would expect, the requests have been most heavy in the restaurant space as these properties rely on social gathering to generate the bulk of their business.

In addition, we have seen inbound requests from other consumer-facing industries either directly from the retail side or from companies that support some part of the retail value chain.

On the right-hand side of the page, we've attempted to summarize some of the key data points regarding our portfolio that we track in connection with evaluating rent relief requests and to answer some of the most common questions we have received from investors. .

The first key area are properties with social gathering exposure. BNL has approximately 17% of its portfolio in these types of assets. Most of the social gathering exposure is in the restaurant space, either quick service restaurants or casual dining.

Next, we have attempted to categorize our properties based upon essential versus nonessential classifications that are important for determining if a business is able to stay open or not during the crisis. The definitions certainly vary by state, but we estimate that almost 70% of our tenants' businesses fall into the essential category. .

Finally, we've worked to estimate what percentage of the portfolio is open or closed. This is based on research by the team and discussions with tenants about their current status. Again, this represents an estimated figure as tenants with large national footprints may not be disclosing the status of every site in their network.

Here, the team estimates that approximately 2/3 of the portfolio is opened and 1/3 is either closed or partially closed. These are point-in-time estimates with the results being updated daily. .

On Slide 14, we've cut the data a different way to show rent relief requests by asset or property type. Here you can clearly see that 75% of our restaurants have submitted a rent relief request. While each tenant is different, the requests have come more heavily from the casual dining side of the business.

Industry experts estimate that sales declined approximately 65% to 75% in the casual dining space as most of the business was conducted on-premise. Operators in the space have pivoted quickly, and online ordering with delivery or curbside pickup has been increasing rapidly on a week-over-week basis to help stem the losses. .

In the quick service space, sales declines have been more controlled with many operators experiencing 20% to 30% declines in sales since the crisis began.

These operators have been able to continue to utilize their drive-thru windows to maintain sales but have suffered from a reduction in their breakfast and coffee service given less people out on the roads each morning.

Rent relief requests have been more balanced across the remainder of our property types as evidenced by the thermometer charts on the bottom right side of the page. .

Finally, on Slide 15, we have plotted our rent relief requests on a geographic basis to help show where the bulk of the requests are coming from. We've also color coded the map to highlight which states have announced plans for or are in the process of reopening.

As you can see, a high concentration of our sites with rent relief requests are in states that are in process of reopening. This makes sense, given most of our properties are located in the Southeast, Texas and the Midwest, which has not seen as strong an impact from COVID-19 to date as compared to New York and other highly impacted markets. .

Moving on to this quarter's determined share value or DSV slide. I want to first remind investors of our standard valuation policy and procedures, which have been in place for many years. BNL's approach to studying our DSV is, first and foremost, a data-driven exercise in real estate valuations.

Our efforts include management-prepared valuations, third-party appraisals and oversight and valuation support from Cushman & Wakefield. When conducting property-level valuations, management and our third-party consultants and appraisers utilize available sales data, such as purchase price from transactions involving comparable assets. .

a lack of debt financing availability for commercial real estate; an inability for principals and third-party experts to visit sites and conduct appropriate levels of due diligence; and a lack of visibility into rents and rental income viability in the short term. .

That being said, all of these factors will lessen over time and the market will transact at higher volumes, which will assist us in assessing COVID's impact on our portfolio valuations.

I invite investors to review the Q1 2020 Form 10-Q and earnings release, which contains more detailed and important disclosures around COVID and its impact on determined share value. .

Many of you have closely followed the public net lease market for indications of value. The market has been extremely volatile, with daily prices often changing 10-plus percent up or down, depending on the day, and the market's current view of when the country will reopen for business.

It is worth noting that many of the public REITs were trading at substantial premiums above their NAVs prior to the crisis, some by as much as 40%. Much of the declines over the past 8 weeks have been giving some or all of those premiums back. And some REITs have also begun to trade below their NAV. .

As a private company, BNL has always strived to market shares as close to NAV as possible, with a consistent and data-driven process being employed each quarter. So what is included in this quarter's DSV? The downward marks on real estate assets were reflective of known tenant concerns and issues in Q1.

Most of the downward valuation adjustments were made related to the Art Van Furniture bankruptcy that was announced in early March. This flows through to the increase in retail cap rates reflected on the right-hand side of the page. The other asset classes did not experience meaningful cap rate changes based upon the available Q1 data. .

Finally, as interest rates plummeted during the quarter, BNL also saw a meaningful increase in the liability associated with its interest rate swaps that appear on our balance sheet each quarter. .

I'll close the valuation section by stating that the Board of Directors will continue to utilize all available valuation information when setting the DSV in the future periods as the impacts of COVID-19 pandemic on real estate asset values continues to unfold. .

At our Board meeting last week, the directors made the difficult decision to temporarily suspend their monthly distribution payments. This is not a decision that the Board or management took lightly as our history of consistent distribution payments and growth is one of the primary reasons that investors entrust capital to BNL.

At the same time, we all have deep conviction that this is the appropriate short-term step to protect and strengthen the company for the long term. We believe it is best for BNL to have maximum financial flexibility in the short-term and to be able to manage our leverage profile and liquidity as tightly as possible.

To achieve these objectives, the company needs to build cash on hand to ensure that we have as much optionality as possible to weather the storm.

The Board also reviewed investor liquidity inquiries and decided it was not the appropriate time to reopen the share redemption program as this is the most conservative approach to focus on maintaining maximum liquidity and financial flexibility.

Given the portfolio performance to date, we did -- we carefully considered simply reducing the distribution to a lower level. But after a careful review and deliberation, we decided to take this step out of an abundance of caution and a desire to operate with maximum flexibility.

We also did not want to whipsaw investors with multiple distribution changes if additional unanticipated events impact our performance. .

At the May 7 Board meeting, we devoted a substantial amount of time to discussing what impacts COVID-19 might have on the country during the second half of the year, particularly, the potential impacts from a second wave of the virus and rolling shelter-in-place orders going into effect throughout the fall, potentially.

In addition, we had a robust discussion around changes in consumer behavior after the restrictions are lifted and once the current government stimulus programs end this summer as there is no guarantee that these programs will be extended or a new stimulus will be put in place. .

All of these open questions and the lack of clarity in the future guided our thinking that BNL should operate with an abundance of caution at this time. Clearly, this is a matter of judgment, and the directors carefully considered the facts available to them and humbly acknowledge the many unknowns in our world today.

We understand that others may see the situation differently, but we feel that our approach is reasonable given the current circumstances. .

As a reminder, our directors and executive officers are collectively substantial shareholders in the company and a decision to temporarily suspend the dividend impacts the group as well. Across our 19 executive officers and directors, we hold approximately 8.5% of BNL's total equity on a shares in OP Unit-basis.

Our directors and executive officers have all made substantial personal investments in the company in addition to directors being paid principally in stock for their services. We only have one class of common shares and no preferred shares, so everyone is impacted the same by the decision.

Although it was a difficult and painful decision to make and one that entailed direct financial impacts on the people making the decision, we believe that this is the best course of action for BNL today in light of the current economic circumstances. .

I recognize that a temporary suspension of the distribution will not be welcome news to everyone on this call. I can assure you that this short-term decision will position BNL as strongly as possible coming out of the current crisis.

The Board will revisit the distribution and shareholder liquidity matters at its August 2020 meeting, and we will provide further updates to shareholders at that time. We intend to make all distributions necessary to maintain REIT status in 2020 and can consider special distributions later in the year to achieve this goal if necessary. .

I want to conclude today with a few words on key areas of focus for the team at BNL over the coming months. Virtually, the entire team is now involved in the asset management process and working to keep rent collections strong.

It is vitally important that we evaluate each rent relief request on a case-by-case basis and apply our best judgment when deciding when to offer relief. If we do agree to additional deferrals, we will continue to ensure that we limit the payback periods and look at ways to increase long-term shareholder value during the negotiations.

We want to maintain consistent and clear communication with all stakeholders and hope that today's presentation is a continuation of that theme. Today represents our third shareholder communication in as many months, and we are committed to ensuring investors remain abreast of all important corporate developments. .

Finally, we will closely monitor markets for signs of healing and opportunity. The Board and management are continuously engaging in strategic dialogue on the best next steps for BNL.

We are focused on all the important topics you would expect, including managing leverage, maximizing liquidity, considerations around the dividend, sources of additional capital, the capital markets, shareholder redemptions and liquidity needs, along with asset management practices and future acquisition strategies.

While there are no formal announcements on these topics today, we are active and planning for the future, and we'll be ready to communicate with shareholders when the time is right. The group leading BNL has always been cautious by nature, and we are proceeding in a calm and thoughtful manner as we plot the next steps for the REIT. .

This concludes the formal portion of our presentation and investor update. We will now move into the Q&A portion of our meeting. .

The team greatly appreciates all of the questions we have received in advance of this call, and we'll start with these first. .

As a reminder, we are conducting this presentation from our individual homes and working on Skype to facilitate so it may take us a few extra minutes to work through this piece of the meeting. Also, please note that the team is merging similar questions to promote greater efficiency.

Please understand if we do not read your question verbatim as it is likely highly similar to another question being put forth. .

With that, I will turn it to Dan Blasi to administer the questions for Ryan and me.

Dan?.

Thank you, Chris. First question, you've cited your strategy of growth through acquisitions.

In the current environment, do those opportunities exist? And when do you think you'll be able to return to growth via acquisition?.

Thanks, Dan. And just so folks know, we have grouped these questions because they do have some similar themes between them. So we're hitting them by section by section. At the moment, and as we just talked about, the acquisition market is generally on pause for BNL and for virtually the entire space.

There certainly will be some residual transactions closing in Q2 that may have been negotiated before COVID hit and will ultimately show up in Q2 results, but we expect that, that will be relatively small -- far and few between.

That being said, external growth by acquisitions is very important to all net lease businesses and certainly to BNL as well.

I think as we continue to move forward and think about how we grow the portfolio, first, the considerations that we need to address are really about the next source of capital for BNL, which is a lot of what I just talked about on the concluding slide or two, really making sure we have that pinned down first and then that also helps inform acquisitions volume and expectations around that.

I will tell you our real estate investment committee of the Board and management are meeting later this week to continue to review the acquisition landscape talk about transactions that we do see available at the moment and prepare our strategy further as we are anxious to continue to grow the REIT's asset base. .

Thanks, Chris.

Next question, with the continued increase in dispositions, has BNL changed its business model to rely more and more on the buying and selling of assets versus its traditional REIT business model?.

No, I'd have to say, Dan, that we are focused on our traditional model of buying well, planning to hold for the long-term and managing effectively and collecting rents.

The increase in dispositions that you see rolling through the financials in the end of Q -- of 2019, excuse me, in early 2020 were directly tied to our deleveraging strategy after the large industrial acquisition that Ryan spent time talking about.

So we were able to accelerate the disposition of noncore assets that, ultimately, we were then able to use a portion of the proceeds to pay down debt. We found the market very receptive from these sales. And so it was a good time to execute on that to help us deleverage and bring ourselves closer to our investment-grade credit rating guidelines. .

So ultimately, the model is not changing. It was a point in time in a series of strategic transactions that drove the increase in disposition activity. .

Thank you, Chris.

What is the status of the previously announced IPO? Is management considering resuming its private offerings or adopting new programs for redemption and dividend reinvestment?.

Yes. Very fair question. And I think a lot of it, again, goes back to some of my concluding remarks. And while I appreciate that they may sound a little bit cliched or unsatisfying, it is very much the truth that our management team and the Board are looking at all strategic options for BNL and its path forward.

We're in continuous discussions with our financial advisers to make sure we have the most up-to-date information on what's happening in the capital markets and other forms of capital raising and considering other decisions around the redemption programs and dividend reinvestment and whatnot. .

I'd point out, though -- and those discussions are robust and ongoing.

And as we've moved past the initial wave of the crisis and stabilized our process and worked through a lot of our rent relief requests, this work will obviously take on a more important and focal point for our management team as we've moved through Phase I and are sort of into Phase 2 of our COVID crisis and what are -- thinking about the different options available to us.

I also point out, though, we are only 8 weeks into this at the moment, roughly. And our Board and management team, again, which I highlighted in my closing remarks are diligent and thoughtful and cautious, and we want to continue to make sure we evolve and see all of the evolving landscape as clearly as we can and make the best long-term decisions.

We will absolutely communicate with investors when more details are available and when it's appropriate to do so. And we will review all the key topics again at our August Board meeting that impacts shareholders as well. .

Thanks, Chris.

Along those lines, why now -- and this is referring prior to the virus, did you make the decision to pursue an IPO? And how have the -- those conditions changed versus prior years?.

our portfolio composition compared to our peers; capital access and the ability to expand that; and then ultimately, to a lesser extent, the ability to offer investors more liquidity. .

weighted average remaining lease term, rent increases, diversification, significant industrial concentration, which is one of the most sought-after assets today, all line up very well with those in the public space. .

At the same time, we also have a long and established track record and a substantial base of assets. We are not what is often referred to in the space as a make REIT, a pool of assets that was quickly assembled with the intention of launching an IPO. And that's a very important factor.

But we also are unique in the sense that we have a strong growth profile and a smaller base of assets than our peers, which could ultimately lead to us continuing to acquire and scale and driving better AFFO per share growth rates than the rest of the space. And so that was one of the considerations we were thinking about. .

On the capital access front, I highlighted on our call last week, 3 different forms of capital that could be attractive to BNL in support of its long-term goals. One is the high-grade or investment-grade bond market. This market provides long duration unsecured debt with even greater flexibility than some of our instruments today do.

It's a robust and deep market and one that we would love to be able to issue in. .

Second would be the ability to be more strategic with our equity issuance, be able to issue in larger blocks to either fund strategic transactions or make significant acquisitions and keep our leverage profile more in check and manage through that.

And then, the other tool that would be at our disposal would be the ATM programs or at-the-market offering programs, which would allow us to match fund smaller acquisitions on a near daily basis, which is a very, very attractive tool to help manage our leverage profile and be in and out of the market on a near-daily basis.

One of the great things about this and the comparisons to peers and the greater capital access can lead to what's known as the virtuous cycle in our space. And this was also front in mind when we were considering the IPO earlier this year. One is, first, greater access to capital leads to ultimately, hopefully, lower cost of capital.

Then this also leads to wider investment spreads with that capital and then ultimately, higher per share growth rates on the AFFO front.

And then, again, if you're able to enter this virtuous cycle and continue to execute, you should find yourself with, again, access to even more attractively priced capital through the continuous loop that makes it very attractive to operate in this space.

Certainly, a lot of our peers operated there for a long time, and we would hope to be able to achieve that as well if we decided it was appropriate to launch the IPO. .

Thanks, Chris. You mentioned that the Board will revisit the suspension of the distribution in August.

Does that mean that the suspension is for May, June, July and August at a minimum?.

I would offer a minor clarification there. So April's dividend, which was previously declared as being paid this week on schedule on Friday. The dividend is suspended for the month of May, June and July. And under a normal cadence, August dividend would be declared at our August Board meeting and paid in September.

So we're not just spending for 4 months. It's simply the coming 3 months. And then ultimately, when our Board gets together in early August, I don't remember the exact date, we'll obviously pick up the topic again there. .

We'll certainly be talking to the Board a lot in between there as well, but that would be the formal decision point. .

Thank you, Chris.

How does Broadstone's payout ratio compare to taxable REIT income? Will the distribution eventually be made up or only up to the REIT minimum requirements?.

I'm going to pass that one to Ryan, if that's all right. .

Sure. Thanks, Chris. In terms of how Broadstone's payout ratio compares to taxable REIT income, I guess I'd start off by saying, historically, our payout ratio has been roughly 90% of AFFO. AFFO, obviously exceeds taxable income. One of the significant adjustments between the 2 is depreciation and amortization as well as some other things.

So naturally, along the way we have historically distributed in excess of what would be required along the way. .

In terms of the second part of the question, I think Chris had mentioned earlier that the Board of Directors will continue to evaluate the distribution as we continue to move forward in sort of this temporary suspension thereof. They'll continue to look at that on a quarterly basis and determine what the next step with it is.

From there, I guess what I would say, though, is in terms of overall REIT minimum requirements that are necessary to comply with REIT status and such, to the extent that we fall short towards the end of the year in terms of what we've already distributed out or will be distributing out versus the actual minimum requirement, we'll continue to monitor that period by period.

And to the extent a catch-up distribution is necessary, we will certainly look to do so to maintain REIT status. .

Thanks, Ryan.

With the decline in interest rates, we've been -- have we been able to benefit from restructuring our debt?.

Sure. Chris, I'll take that one. .

Yes. .

So as we think about decrease in interest rates, I think there are a few important factors here. A lot of what we see is news around decrease or increase or interest rate movement in general with respect to risk-free rates or base rates, right? Whether they be treasury rates or LIBOR rates and so on.

Obviously, since this crisis has occurred, we've seen a fairly significant downward trajectory with respect to base rates, with treasuries pulling in quite a bit. .

As I look at it, I think if we measure the beginning of this being somewhere in the late February, beginning of March time frame on a global basis, you saw rates sort of in that -- senior treasuries in the roughly north of 150 basis points, and they've compressed into the 70s at this point.

That said, the second factor to this is really the overall credit spread. So as we look at credit spreads in the investment-grade space, along with, say, net lease specifically, we've seen a significant widening out of those investment-grade credit spreads, in some cases, north of 300 basis points during the same time period.

So although the headline rates are obviously decreasing on an all-in basis when you add the spread to it, it's really been a net widening out of interest rates.

So ultimately, we haven't done anything other than what I outlined in my commentary with respect to balance sheet management or changing anything with respect to our debt profile during the quarter. .

What I would say though is that we have benefited from some of the lower base rate movement through our floating rate debt component of the balance sheet at this point. .

Thank you, Ryan. And the next question also relates to interest rates.

Why has the value of your interest rate swaps increased from a net liability of $21 million to a net liability of $80 million?.

Sure. So a lot of the same discussion points that I just outlined in the last question sort of play through to this. So we move period to period, and there's a fair value done of those interest rate swaps or just in general our fixed rate debt.

Those same dynamics effectively play out and move the valuation around whether rates increase or decrease or spreads widen or tighten. Those all have an impact on it, and what you're seeing there is effectively the movement from quarter-to-quarter. .

Thank you.

How much availability does BNL have on its credit facility?.

I'll take that one again, Dan. In terms of availability on the credit facility, as I outlined in some of the commentary, leading up to quarter end as well as through the beginning of April, we took a significant amount of our revolving line capacity and turned it from available capacity into cash on the balance sheet.

So I had referenced $75 million of effectively available capacity that we turned into cash on the balance sheet.

Above that, we lost a little bit of room based on where our current covenant structure existed and such that we had about a little north of $25 million of room after that borrowing as additional available borrowings under the current credit facility. .

Thanks again, Ryan.

Next question, how did Broadstone determine the approximately $300 million payout to the former management group?.

Sure, Dan. I'll jump in there. I would take us back to some of our presentations from last fall. And really, the process was a diligent and detailed one led by a special committee of the Board, which was comprised of only independent and disinterested directors.

So all of our independent directors were active, but there was a special committee put in place to undertake and review this transaction.

Ultimately, the special committee believed many of the same thing -- absolutely the same things that we highlighted in our presentation today as to what the positive benefits for shareholders were and how, in addition to the internalization and all the simplifying corporate structures and things that we talked about, the substantial cash savings and alignment of the -- alignment work were really important.

And so the negotiation and the work around the $300 million figure was a negotiated transaction. The special committee -- had investment bankers from Moelis & Company to act as their financial adviser and Alston & Bird to represent them on the legal side.

And they carefully studied the cash flow and AFFO savings anticipated from the transaction, plus the future growth prospects in the company and, ultimately, the other strategic benefits that came through internalization when making the decision to move forward and agree to the $300 million price that was listed there. .

I also think it's very important, though, that -- it's worth noting that our ownership group at Broadstone Real Estate, which was comprised of Amy Tait, Stone Point Capital and a collection of the employees -- or all the employees, I should say, all very much believed in the transaction and believed in the long-term future of the company as well.

And you can see that through the high levels of stock that everybody took in the transaction. Both Amy and her family -- and Amy remains on the Board and remains as Chairman, took 100% of their consideration in shares and units. The Stone Point Capital team did the same, and management took very heavy concentrations as well in stock.

And so ultimately, while it was a complicated process, we and the special committee were very much locked in arms on both the benefits to shareholders and our future view of BNL's prospects going forward. And so hopefully, we created some tremendous alignment through that. .

Thanks, Chris. BNL recognized approximately $340 million of goodwill.

What did this relate to? And how is it calculated?.

Sure. I'll take that one, Chris. That's a great question. This is actually the first time that we're seeing goodwill show up in the financial statements of BNL. So ultimately, the $340 million of goodwill was a result of the internalization transaction.

Mechanically speaking, goodwill represents effectively the excess of the purchase price over the acquired assets and liabilities. So in this case, it's really a present value of the future cash flow savings that were -- are expected under the internalization transaction. So good question.

Definitely the first time we're seeing it come up, and it will continue to be around as we go forward. .

Thank you, Ryan. Next question. The communication refers to an earnout liability recognition of over $40 million.

In the face of the economic uncertainty, is it possible to achieve an earnout?.

Sure. I can take that again. So as Chris mentioned, there's an earnout in place in conjunction with the internalization transaction. If you look towards the 10-Q filing and whatnot, we have laid out quite a bit of detail around it. Ultimately, the answer is yes.

We have multiple tranches associated with the earnout that span over a long time period, up to, say, 5 years. There are 2 tranches that total $25 million that are available for potential earning in 2020 to 2021. And then 2 additional tranches on top of that, that total $50 million that span over performance periods of 2021 through 2024.

So as we think about a lot of the uncertainty and sort of negative headline news that we're talking about today, a lot of that, in our view, is clearly near-term in nature versus spanning over a long period of time. .

Thank you, Ryan.

Is BNL still on target to realize approximately $25 million in savings for the first year of the internalization? And what will the savings be in Q2?.

I can grab that one, Dan. Thanks. So I think some of this is explained on the early slides in the presentation where we gave the walk from the internal and external structures, and I'd encourage folks to take a look at that because I think it's very informative.

I think the -- ultimately, the $25 million savings figure was both a result of expectations of savings that would run through the balance sheet. So kind of what we showed on that earlier slide with the changes in the G&A profile and the replacement of management fees and ultimately lower internalized G&A costs coming on there.

And on Q1 basis, we estimated that savings to be -- if we had been operating on an internalized basis for the full quarter in the $3.7 million range, I think that's a pretty fair estimate for Q2 given limited transaction activity, again, plus or minus for small unexpected items. .

The remainder of the $25 million savings was obviously tied to transaction activity and not paying acquisition, disposition fees and things of that nature. Ultimately, the back half of the year is a TBD, with acquisitions and disposition volumes still to be determined by a host of factors. So we will have to wait and see how that progresses.

But even with the uncertainty around the volume -- transaction volumes for the balance of the year, I think it's really an important positive and we will focus on that. We're really still enjoying substantial savings during the year.

They'll continue to grow over time and as we continue to leverage our base and the company is still benefiting from all the strategic optionality created by having an internalized management team. So more to come on that front.

But we should have a pretty clear view of where Q2 can line up and then, ultimately, we'll continue to report to you on that as the year progresses. .

Thank you, Chris.

Have any tenants, in addition to Art Van Furniture, filed for bankruptcy or indicated an intent to file?.

Yes. So we had 1 additional tenant, Dan, a small industrial tenant that filed for bankruptcy in April. It's not a top 20 tenant.

Ultimately, the business operations for that tenant to continue, it's -- maybe probably a more elegant way to say this was a prepackaged bankruptcy, where all of the creditors agreed to the terms of the bankruptcy before the company actually filed and entered the process.

So it should be a relatively short process based upon what we understand, and we anticipate receiving rent collections during the proceedings and then after as the company emerges from bankruptcy as well. .

Thank you, Chris. STORE has re-leased its Art Van properties at approximately 70% of base rent with possession occurring on May 8 and rent beginning in July.

What is the status and expected time line of the Art Van stores that Broadstone Net Lease owns?.

Yes, Dan. That is correct. I've seen those press releases and headlines. We've been part of the ongoing negotiations. And to the best of my knowledge, we've had similar discussions with the same tenant that STORE has appeared to execute the re-lease with.

Ultimately, we didn't feel and don't feel at the time that the potential tenants offer was really the appropriate outcome for BNL. .

What drove that decision and why we chose not to move forward with that tenant at this time is that the tenant had a fairly strong financial ask of BNL to help finance their inventory purchase from the Art Van estate. And we're looking for other support for working capital needs.

Although I don't know this to be sure, I assume that the same-store pass was made of STORE, but I'm not privy to those discussions. So ultimately, we were not looking to negotiate or execute upon that deal. .

I will note that the bankruptcy process continues. It appears, from our discussions with bankruptcy counsel that going out of business or liquidation sales will commence in early June or, frankly, as soon as it's safe to practically open the sites.

It is worth noting that BNL should have priority claims for rent for a period during the bankruptcy as it continues to play out and they operate our sites and we've been storing furniture for them and then ultimately selling it. And from there, our team continues to negotiate with a number of interested parties for our sites, either to lease or sell.

We've seen good interest in a variety of them. .

I would anticipate these conversations accelerate as the world opens up further and tenants have a better view or line of sight into when they can actually operate the stores after the bankruptcy's proceeding there are closed. So that's where we are today. .

Thank you, Chris.

Next question, how many of BNL's properties are currently not open as a result of the COVID-19 pandemic?.

Yes. We talked about this in the slides, so I'll move through it pretty quickly. But we estimate about 2/3 are open and 1/3 are closed or partially closed. We would also estimate that 70% are deemed essential, whereas 30% of the businesses are deemed nonessential.

Obviously, this is a moving target by the day, and we continue to follow it very closely based on all the state regulations. But folks can point to Page 13 of the presentation for more detail there. .

Thank you, Chris.

When BNL has agreed to rent deferrals, what terms and provisions has the company agreed to?.

Yes. So I would define this as, first and foremost, we're looking to maintain muscle memory with our tenants. If we agree to some form of deferment, I think we should pay some -- they should pay some amount of rent each month, and that's been in each one of our agreements.

In terms of what we've actually deferred, it has been between 25% and 75% of monthly rent for approximately 1 quarter. We've been expecting to be repaid primarily by the end of the year, and that's been the general term.

And then as I alluded to earlier, we continue to examine other ways to add value with other leases -- lease enhancements as well, and so that puts an outline. .

Thanks again, Chris.

In cases where we do decline rent relief requests, are the tenants continuing to pay?.

So that's a good question. In many cases, those who have been declined have continued to pay rent, but it's certainly not all. As you can tell from our numbers, we have a portion that is unresolved, which includes some unpaid rents.

Some of the discussions also involve what we would describe as an understanding note to the tenant by which we tell them that we have looked at their financial situation, and we feel like they should pay rent in the short-term and that we want to maintain close contact with them as the months continue to unfold, such that we don't miss the proverbial forest for the trees and I turn them away, miss a significant risk that appears in their business.

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So a complicated question, but generally, most are paying rents when we have asked them to continue to do so. .

Next question, how many tenants have received PPP loans? And are they required to pay BNL with those funds?.

Yes. I'll take it, Dan. A handful of our tenants have reported receiving PPP loans, and some have actually withdrawn the rent release request as a result of receiving these loans, which is great.

We definitely make all tenants aware of it when we're in discussions, and they've reached out to us and to help them understand the applicability to their business. And any agreement we sign that the tenant -- does require the tenant to use PPP loans to be applied towards rent if they are received and they receive a loan. .

Thanks, Chris. You've done a nice job presenting rent relief requests by property type.

Can you provide percent of approved requests by property type as well?.

Thank you. Absolutely, we can consider including this in our next report to investors. It probably becomes a little bit more meaningful once we've finalized all the requests and worked through all those.

But at a high level, those that we've signed up generally are smaller franchisees in the casual dining and quick-service space and then a few warehouses, industrial assets that serve the retail value chain. So our housing and distributing products that end up in retail stores have been the ones that jump to mind as our most common executions to date.

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Thank you, Chris. What is the median rent coverage ratio for our tenants? Many of the other triple net lease REITs report on this number. .

Sure. I checked with the credit team this morning just to make sure we are caught up on this one. We track it for our retail and restaurant tenants, which are most applicable from a 4-wall coverage or EBITDAR coverage. Our Q1 average rent coverage ratio was 3.0 for the portfolio for assets appraised. .

Thank you, Chris. What is -- management's calculation of NAV, DSV and cap rates do not factor in the impact of the COVID-19 pandemic, even though it's apparent that many industries have been negatively impacted by the pandemic.

Why hasn't the impact of the pandemic been factored in yet?.

Yes. So I think this goes back to our discussions and slides on the determined share value. I very much agree that many industries have been negatively impacted by the pandemic. And what I'd point out is, our methodology and valuations are very data-driven and consistently applied.

And they focus heavily on sales comparables and sales comparables for assets that are similar to what we own. And we research those every single quarter.

And ultimately, the Q1 sales data is really not reflective of the impacts of COVID simply because most of the transactions that are closed in Q1 were the result of negotiations that happened in year-end or early 2020 and the marketplace had not digested the information associated with COVID yet.

A transaction market for the moment is certainly on pause with the lack of debt financing, inability to visit sites and visibility towards rental payments in the short term.

But it definitely will rebound in future quarters, and we will look to incorporate changes in pricing to our assets as we continue to see more data available through subsequent transactions. So ultimately, wanted to be consistent for our investors, thoughtful and incorporate the best available information we had.

And unfortunately, that is just not reflected in where the sales comparables were in Q1. Real estate tends to be -- private real estate tends to be a slow laggard in terms of reporting, given the long lead times to negotiate and close transactions. .

Thank you, Chris. Many companies are considering actions to reduce operating expenses, including reducing G&A through, among other actions, reducing third party fees, director fees and payroll.

What actions has BNL taken to reduce operating expenses?.

Ryan, do you want to take that one?.

I'll jump in here. Yes. And give you a break. Yes, absolutely, good point and should have highlighted this a little bit before. So I'm glad it was brought up. In terms of how we're thinking about operating expenses, today, obviously, a little bit different than before.

Before the -- before this current global pandemic and COVID-19, we internalize, as we've talked about at length during this call, it really changed our overall cost structure from one that was primarily focused on fees that are paid to the external manager to internal costs. .

Those costs include payroll-related costs, travel and entertainment and various other things. So we obviously have a decrease in those costs as compared to our old structure and then have continued to monitor them as we headed into this sort of uncertain time.

Some things that have sort of naturally occurred, right, in terms of G&A, is that there's clearly no travel happening right now. We've frozen our marketing budget. .

In terms of office administration costs, they're clearly down. All sorts of normal cost that we incur for third parties and consultant usage and things of that nature are naturally down. We also aren't currently hiring.

With that said, though, I'd say that in terms of our employee base and whatnot, we aren't looking at any furloughs at this time or anything of that nature. .

The team has been carefully redeployed in cases where they have some idle capacity, such as the acquisitions at the moment, has been heavily focused on working through tenant-related matters and engaging in dialogue with some of the same individuals that they originally did deals with. .

So from a bigger picture perspective, we obviously want to have a full team in place. It's carefully constructed over the last 5 years, as I think Chris has mentioned before. And coming into the crisis, we want to be able to exit the crisis on a relatively solid basis to be able to go ahead and pursue growth again. .

I think another area that we're focused on is not just necessarily our cost structure, which is about 8% or so of revenue, we're also focused on all of the dials, right? And I think that was sort of inherent in a lot of the discussion today.

And as we think about the dials and where we can turn that and what has the most meaningful impacts, the one area that we're obviously heavily focused on is rent collection.

To put it in some context, rent collection is one of the most impactful things we can obviously do, right? 1% of additional rent collection is really equivalent to about 20% reduction in overhead costs.

So overall, I think that's a little bit of a flavor, probably went on a little bit too long with it, but we clearly have had a lot of thoughts about this and clearly discussed it last week with the Board and is fresh of mind for me. Chris, I don't know if there's anything you would add to that. .

No, you said it beautifully. I think it's right. We're being cautious on all the right fronts. And the team is busy and productive, and they're doing great things. And we need their services now, and we will want their services going forward.

And so because we have a large scale and a relatively low overhead, we're watching expenses very closely on all the appropriate fronts and, ultimately, feel like we're going to be in a good spot with this. .

Thank you, Chris and Ryan.

Was BNL eligible for any of the government stimulus funds or the Fed's liquidity programs?.

Yes. That's a good one, Dan. And we've heard that from a few different folks, similar questions. We did not meet the requirements of the PPP program based upon our liquidity profile and the fact that we were seeing good rent collections.

Some of the provisions there -- well, excuse me, some companies receiving that stimulus are required to evident -- to offer evidence in the test of their liquidity needs. And the expectation is that the stimulus would be used for a last resort. Given that we have revolver capacity and a lot of cash on hand, it was not something that made sense for us.

And ultimately, I think you've seen a lot of larger public companies -- not peers, I should say, but public companies and other industries returning proceeds that they had drawn from the program in earlier days. .

One of the things on the other Fed liquidity programs that the person who asked this question focused on is one that we follow closely. Nothing has been applicable to us yet.

I do spend a lot of time joining our Washington Advocacy Group, NAREIT, the National Association of Real Estate Investment Trusts, and they have done an excellent job keeping the industry abreast on how these programs are impacting us, changes at Treasury, changes with REIT status and REIT requirements and all that kind of stuff.

And so that's a position where I've spent a lot of my time -- not a lot, but at least a reasonable amount of my time focusing on and using that resource to help us make sure we're well tuned into anything that might be a fit for us going forward, so... .

Thank you, Chris. And thank you all for your time and questions today. Almost 400 shareholders and interested parties joined today's call. And as you can imagine, we have received significantly more questions than we have time to address on this call on a 1-by-1 basis. We do have a log of all those calls.

And if we didn't have an opportunity to get to your specific question today, a member of our IR team will follow up with you. I'll turn it over to Chris in case he has any final comments. .

Thanks, Dan. Yes, it's definitely -- we've kept you a lot longer than we planned to and appreciate the tremendous interest. I -- the 400 shareholders is very, very interesting and wonderful to see we had such good turnout for us. I hope that you found all of the information very, very informative.

The team worked very hard on it to give you as clear a picture and view as we possibly could as to where BNL sits at the moment. .

And as Dan alluded to, we will continue to focus on transparent and consistent communication with you as the process moves forward and we continue to advance in this. Dan Blasi and Nicole Calcagni from our Investor Relations teams are available to assist you and they'll follow up if there's any questions that we didn't specifically address. .

And I'll just close by saying I'm deeply grateful and thankful for all of the ongoing support for Broadstone Net Lease. We wish you all very well and look forward to speaking with you soon, and have a great afternoon. Bye now..