Broadstone Net Lease has announced it will add three new build-to-suit development projects to its already robust pipeline, signaling a strategic strengthening of both its portfolio and the growing interest in build-to-suit projects. The aggregate estimated investment for these latest developments is approximately $61.4 million, with all three projects currently under construction and scheduled for delivery in the third quarter of 2026.
The transaction comprises two industrial distribution warehouses and a grocery retail site. Specifically, a new industrial facility in the Dallas metropolitan area will serve Palmer Distribution Services, while an industrial warehouse in California’s Central Valley will be built for AGCO Corporation. Broadstone will also develop a new grocery store in the Dallas area for Sprouts Farmers Market.
Broadstone has secured the necessary land for each project and construction is already underway.
CEO John Moragne underscored the momentum behind the company's build-to-suit strategy, highlighting the expansion of relationships with both new and existing development partners as a sign of the company’s ability to source opportunities directly, rather than relying solely on the traditional acquisitions market.
The build-to-suit approach—where assets are specifically designed for tenants and are paired with long-term lease commitments—remains a hallmark of stability for the net lease sector. The new deals will span 12 to 15 years and include annual rent escalations ranging from 0.9% to 3.5%, providing protection against inflation and ensuring a predictable, durable cash flow. For investors and sector observers, these lease structures reinforce the sector’s appeal as a hedge during periods of macroeconomic uncertainty.
This announcement is not just a reflection of Broadstone’s growth; it’s indicative of the evolving playbook for net lease REITs. Even as capital costs rise, well-capitalized firms with a demonstrated ability to secure and deliver custom-built facilities that are increasingly favored, particularly when they can lock in tenant relationships and create yields in the mid-to-high 7% range.
Broadstone’s total in-process development pipeline now encompasses eight projects with a combined estimated investment of over $370 million, further illustrating the scaling opportunity available for firms willing to invest boldly in build-to-suit developments.
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