GNL - Earnings call transcript Q3 2021

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Operator

Greetings, and welcome to the Global Net Lease Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. I would now like to turn the conference over to your host, Louisa Quarto, Executive Vice President. you. Thank

begin. may You

Louisa Quarto

of Good GNL's and call. third webcast Relations is operator. www.globalnetlease.com. joining This you us being section Investor the for quarter in website afternoon, you, at thank everyone, for call GNL's Thank XXXX earnings

filed call on are materialize, Officer; We of are to information Executive discuss the results Chris discussion more of contains Any during The statements including Form risks following and provided year Masterson, implied GNL's forward-looking Should Joining SEC XXXX, of uncertainties. for Jim factors materially the our risks these those the may as all other cause actual quarter's GNL's which subject filings, the Nelson, me to of to risk filings today Officer. call uncertainties statements, you after made Chief from a and one or the differences. differ detailed results Chief these February by that forward-looking for call. or on only more that the with of refer and date XX, XX, expressed conference or the forward-looking Financial XX-K XXXX this SEC all statements. could the ended December are this date

supplement, today's SEC during our over to call, the these to update release we forward-looking comparable investment any discuss to will filings, earnings I of performance. isolation accordance to or in in the our use evaluating now in our financial or refer A turn stated results be Also, release intent to at for a a will As throughout financial also in available we call www.globalnetlease.com. revise and is by required GAAP These statements, our substitute considered measures measure detailed GAAP. should are grade to a directly financial disclaims the GNL useful or which will website Nelson. be measures, Jim implied law. about Jim? obligation with Company's information call. our can posted for today's believe more what tenants, our reconciliation as except earnings non-GAAP not consider measures we be Please most CEO, term we which in prepared as these

James Nelson

and Thank progress joining am objectives. GNL pleased call. Louisa, long-term thanks steadily to you, on on quarter, had today's our making for report us very everyone to strong I a that

of Our high critical, quality, lease over and we portfolio mission XXX% collection. nearly performing occupancy expect is net as rent with XX.X%

accretive in portfolio We are differentiated industrial on increasing portfolio continuing leases. and extending close successfully our advancing and concentration international distribution to acquisitions, expanding assets strategy by and

by year-over-year $XX.X continue We for than third million. to growth to drive quarter the increased more NOI as cash XX%

have weighted Our weighted XX a years. rate at remains we cap acquisition on in over robust. lease XX, of average pipeline closed acquisitions a of remaining average XXXX Through million and X.XX% of term $XXX October almost

going acquisitions in are our earnings growth forward. are the our growth, with acquisitions have for of year. to rent well-positioned embedded Along we complete on cash and over With million pace we drive $XXX to the pipeline, flow we

improved to to paid sheet. $X.XX. from stockholders balance adjusted to continue and $X.XX We common X.Xx annualized strengthen were per at Dividends remain EBITDA to our per debt consistent net share Quarter-over-quarter AFFO share. X.Xx

sheet balance portfolio strong drive capabilities, GNL's to global unique excellent Our performance. and best-in-class continue

us Steel we and source negotiated on Guernsey closed, we some investment the to and opportunity in rated, nearly the the other attractive Trafalgar were dollars come third terms property the purchase to a based price for on expiring agreed closing. to of for we to tenants significant the contract extended provide X.X of on to office of XX-year a lease this properties tenant. Europe in years our $XX.X exchange to have years. to Pilot average implied of a few lease The UK in I of attractive Court rate leveraged remain as the millions When acquire near-term Prior fourth quarter with recent is property confident reasons grade on One that a this the to lease remaining representing our strong unlock take acquired invited weighted of industrial our the preliminary during color a strong lease base, an and and million extending tenant day platform major value on to due a terms. going-in is because reputation on from club quarter. early of from We across we want bid Trafalgar Court extension as was to XXX% and the rate for XX% X.XX% to ability acquisitions. Trafalgar space, including acquisitions in with acquisitions closing, transactions lease for to strategy our the at close significant and some asset management property extension the term building Court the gives our additional Point believe ability expiration We the of Walmart discussions the we secure the property. cap of moments X.X tenant, well

of investments in the on to of the through Italy of the markets Whirlpool, the we and our in choice. GNL Notable closing recent Johnson acquisition portfolio acquisitions. appropriately Walmart candidates then properties learning the the center and out acquired construction Learning of that leaseback acquisitions, continuing Center expertise which fourth the associates our we on in shown sale headquarters the Bentonville, we Walmart center local facility and unmatched their Controls visual Early structure, worldwide. The pleased closed add to a is the into cutting-edge and that Fortune a acquisitions company's onsite capabilities. part digital transformation. the with time Walmart, ongoing new development has one for to we play we new company have training and list McLaren and XXX their again, happy time We quarter, to as are and in serves U.S. is have say, where Arkansas, when leveraging partner training our tenant primary deal finance on Walmart as comes audio acquired continually roster Needless developing the role to digital demonstrated our and campus. number are European very relationships in and team and to it built of

Combined with X% properties XX over XXXX a have rate cap million pipeline U.S. weighted remaining. forward lease anticipate term acquisitions eight for acquisitions at industrial the exceed and we the of Our acquisitions million. closed the $XXX $XX year-to-date, over average years total includes we to Netherlands activity with and of almost in

and Geographically, mission our our reduce Our fully after our portfolio Leasing Thanks focus assuming very billion the leases On represent lease of the for property portfolio project the lease one acquisition are base team meet team. Lease am and to XX% in our our XXXX, XX.X% acquisitions to targets I XX% the evaluating nearly are and underwriting. to stringent searching a and have majority have exposure have is until average, remain of quarter. lease straight-line lease the a LOI of vast we nature almost of rent. weighted square revenue of the definitive our strategic in added is we at our five extensions leads $XX.X expire opportunities lease to Year-to-date, occupied portfolio. total at agreement stability pleased and X.X also properties completed of and requirement. properties term Europe, LOI. with and critical term tenant management our explorations. million annualized don't average GNL's million UK the lease Western end asset XXX able rent executed and of the and of the extensions of U.S. X.X the many for X.X% XXX potential disposition our years annualized end way and feet Canada nine year, of respectively. of expansion The of totals remaining new activity representing extensions strong for one investment the additional XX $X.X been years for and that

portfolio XXX portfolio and annual XX% straight-line on the with is representing based more XX single than tenants Our industries rent. industry well-diversified with of no whole

over increase industrial more and acquisitions as annual to office industrial credit, XX% XX% comes high a and success GNL to the our tenants. I'll our year implied on over X% strong benefit distribution, third portfolio. walk on retail the quarter, closing our of with of before With were quality to Chris pipeline our acquisitions end the or rent compared At made industrial over portfolio from grade remarks. the investment results the of is ago. and the industrial the and for some of distribution, tenant XX% XX% we've call see year-to-date. significant dispositions XX% positioned continue well Contributing that, XXXX in grade I to to years. Chris? also on investment retail close the the a detail our Across We retail to focus properties last office we assets follow-up of full-year concentration several acquisitions X% and straight-line through turn and is financial continue

Christopher Masterson

Jim. Thanks,

of the adjusted quarter third recorded we the from million XXXX. third EBITDA million XXXX, of $XX.X in quarter up For $XX.X

were stockholders with increase We to million million quarter net fee, million of and third $X.XX up million also $XX.X share $X.X to $X.XX per to the XXXX. third in in XX.X% lease termination a million. and AFFO inclusive attributable or per million FFO of and $XX.X $XX compared for $X.XX $X.X of and revenue common $XX.X $X.XX reported from the income respectively share quarter

GAAP found our non-GAAP of the reconciliation earnings net release. income to be measures the always, As can in

net balance billion quarter weighted of with average $X.X a sheet, X.X%. ended rate we interest the of the On at debt

was million The end approximately company swaps. ratio $XXX.X XXXX of of on million a The coverage The well $XXX notes, average our net was of the on credit gross of debt in X.X and senior the million outstanding XX% X.Xx adjusted components at was loan debt debt rate which $XXX.X with of end interest to This is the inclusive interest years. debt. the facility, quarter. maturity rate, weighted X.Xx. in-place ratio include the has cushioned revolving debt fixed $X.X Our mortgage debt floating the term billion multi-currency at third EBITDA of quarter rate

the million common of quarter in As $XXX.X XX, million. dividends The in or $XX.X per liquidity to shareholders $X.XX XXXX, company share. September approximately distributed was

for enterprise With call value closing closing XX, shares to debt common some shares. for shares, share $XX to that, net $XX.XX Series enterprise the remarks. preferred on turn the B and value Jim of of I'll for XX% preferred price with for based was $X.X Our billion back A September $XX.XX Series XXXX an

James Nelson

collection, continued cash met levels year. Broadly, pre-pandemic first very this with I'm throughout compared grow quarter across and have Chris. you, XXXX. rent performance EBITDA NOI Thank including we the company, pleased of the exceeded to GNL to how adjusted our has when figures and

reputation GNL's importantly, for European partner during More U.S. same the sale-leaseback has as strategic transactions a time. grown among premiere exponentially companies and

execute are out well-positioned can that enhance operator, accretive, for I into momentum to and strong our that open to We on With exclusive the look continue questions. creative this and XXXX. carrying further year forward line to closing portfolio. we transactions that,

Operator

Thank line from the [Operator you. Mailman At time, conducting Capital question-and-answer first KeyBanc this Instructions] a session. comes Please your question. with be of proceed Our with Craig Markets. we'll question

Craig Mailman

got it. just I'm I commentary it tenants? to Hey trying the lot of guys numbers – kind cap. I'm saying the for yield X% little a put to a a lease back around premium curious, that done, kind around you you got guys an of just you uncertainty guys. afternoon. you much just Trafalgar. kept to Jim, by over some want the that around go drove getting put think Good some bit How guys to trying you of you think around of context your value

James Nelson

somewhere Well, the around XX% premium, more to less, local XX% a or a be my little we've markets, the guess but experts at a spoken little premium. from a would somewhere in least around

Craig Mailman

is how you kind are way that And you to extract there are going to to pull proceeds or – value? out on guys Okay. of a planning refinancing that

James Nelson

mortgage existing that refinancing in be a an on two. we the Well, will short-term which when has it, so we next year over property on took left or the sometime

Craig Mailman

dispositions. Okay. then strategic I evaluating wanted go And back your to to commentary also

were guys go give you had guys luck in you good to mean, the XXXX will of the portfolio, you can in able there where many of to rid are some with as I asset some kind other of acquisitions? – how a extract assets get portfolio us timing you – look you the sense and value. I As the to think other you Germany finance look through

James Nelson

question. That's a Craig. Thanks, Yes. good

this we about and as half talked we've are years. we where and we our over selectively a in, know, number we offers good reviewing last selling you of the the have years, assets As cut the come – are we retail by off times retail have over few exposure them

So we will a are few properties that. here doing and there continue And there.

holders long-term good of we are work see real property. also sell estate, benefit our when in to are proactive that but We again, it we a would

right and So any we are haven't properties looking few we in now, on decisions at made Europe definitive the a them U.S. but yet.

Craig Mailman

the that just last down the And kind and of assets It about the sense on one on X.XX remaining get it's the industrial between and full-year industrial acquisitions break is assets? Okay. down, assuming that for then it a it pulling maybe blended office sounds are one of me. just yield X.XX. out yield coming like I'm the total

James Nelson

little a down it bit. bring will It Yes.

the weighted is cap with QX the average X.X%, the pipeline, pipeline. rate think I XXXX

down think rating if McLaren overall credit into to like, Trafalgar range. I the think going improved, their I we it's saw think the for and really and probably bit X.X% So average Court. little overall you were pull I year, look – that at the a advantaged then with the, we But has it

those, two all rate very going on for of have a So in rate cap strong cap properties average year. between the to we're the the weighted going

year pleased So how with is the really we're looking.

Craig Mailman

And had in happened mentioned rating McLaren's improved. motion that any lease or resetting about the credit now there any you thing update that's there? that Is

James Nelson

periodically, change it making yet. now. right a yet Not no. not No, we're review We but

Craig Mailman

guys. Thanks Great.

Christopher Masterson

Craig. Thanks, right. All

Operator

next proceed you. Our Please from [Operator question Instructions] B. the Bryan with Riley with Maher your comes line question. Securities. of Thank

Bryan Maher

on points from degradation XX you Good did from? anything away take like color afternoon. the that but give Not [indiscernible] occupancy, XX.X% to your stunning come a basis where can us little

James Nelson

give to some that? want Bryan on color you Chris,

Christopher Masterson

Yes. Sure.

actually had were of was So That They tenants, to Trinity to two one our and on properties that. I'll consolidate one. jump in Health. they looking related to

part terminated they by of lease leases, the of the as did but actually So years. one XX other additional they extend that transaction, an

losing one while So lease, have... we

Bryan Maher

for property the would prospects or what releasing be it? And that selling

Christopher Masterson

So are to and at point, on release actively we that this that. working looking property

Bryan Maher

acquisitions, to And of give color the on your then Jim pipeline maybe specifically, little us how X-Pack? don't this, could a Great. Thetford pronounce I you Corporation know

James Nelson

know, focus is remains also execute fantastic a building are talked industrial Yes. QX. a And It's in quality we good a great focus just good this the look close and It's properties, except our out, like the it's about and an you Guernsey, in and But put in for Leasing high everything in deal lot, property pipeline are still industrial at we we left Trafalgar the with that which nice X-Pack. tenants, much will [Walmart which that an on super in closed is wasn't. on that. properties, on X-Pack, distribution. when we Center], building industrial industrial, things find pretty distribution QX even industrial, a industrial really quite But company, as we've rest of them really if expecting to the because, you the on our Court and deck though is

Bryan Maher

Great.

XXXX, to million So expected of on assuming to at stunning close another going acquisitions that and you get that's what's really kind $XXX respectable you rates. of cap be year for

for prospects per about do for I'm not a seeing to till or now how get a see later? relative momentum as clearly you feel don't guidance se XXXX strong you're but maybe the So for rate enter number XXXX, to that we or cap we looking what a continuing

James Nelson

in and still a mean team stuff stuff look that remember lot we to Well, when so looking stuff a – U.S., me, wide properties our lot get acquisition properties. of of locations. fortunately, I a we of to it's talked a of see at get relationship-based. in in see a the lot We're acquisitions lot of at the variety And we've about are I Europe shows multiple our

us properties. quality that So relationships continue the years to we've bring the built over

strongly about very So I future. feel the

high doing we've billion years. last started the $X assets. and been I running quality four can added company, of think Since continue Chris I very what we over worth for doing this we've

that to think the continue GNL. I into about very for hold I'm future. can we what So has future the positive doing

Bryan Maher

acquisition, expect phenomenal take as would a unusual. next And see characterize away GNL's anything some more two? is little certainly think McLaren asset, to Should which to most but stuff the in not people it from a in I the we year or unusual future

James Nelson

prices but than little Yes. of it I certainly bit have it situation. properties don't use, the good know at Bryan, But would buy a that the is right if term different quality that most flexibility transactions the again, shows we've in we done. to I was the unusual

So I to say it. knows. no like the I going McLaren, not say anything that's because certainly ability we similar arises But who again. that to if would something to opportunity we're do never on another have would never to execute

Bryan Maher

Okay. Thanks Jim.

James Nelson

Sure, Bryan. Take care.

Operator

Thank you.

Securities. line comes the Our Barry question from with next Oxford Please with your of question. proceed Colliers

Barry Oxford

Great. the compared Thanks. in quite the we the you or rate of much compression U.S. Europe experiencing U.S.? maybe to we environment experienced guys still cap more? still or over over the as rate in a the here bit cap they little that about Could talk Are not or kind have are

James Nelson

– don't economies much. it's opened I slower don't a little ours. as I than bit think quite Their think honestly,

and of with opportunities up a compressed in mean, that opens cap a we've it off they're So there. but interest time, us. then think Europe, lot undeniable, And rates Europe, and low changed in that I leveled U.S. know, had really for rate had value here of rates don't you Europe it's sort leveling some quite sort cap period as there is it's five in years. they've for last over in rapid compression But like there long four the of return still very they quickly, or the in off is I

Barry Oxford

with have lack earnings it's So look, U.S., not not mind, quite cap tagged and of why simple… you've accelerate in some some of sale for in here that of assets Or, a that off differential? that you the rate for get word, better and kind that the

James Nelson

but all say looking of that dispositions the didn't that held we're I for our now. Barry, were there in Well, right that's potential looking, dispositions potential at, said Europe we're are in I sale U.S., nothing

Barry Oxford

Okay. Right.

James Nelson

in for opportunities. the we there sell, that. do at looking option best do can shareholders. best the we thing will some look be then We if the portfolio are our certainly for And be would properties to What are

Barry Oxford

guys. Thanks Perfect.

James Nelson

Take right. Barry. care, All

Operator

Thank you. to and Mr. the this turn session. comments. for gentlemen, question-and-answer Ladies concludes final floor our back any I'll Nelson

James Nelson

you, I thank operator. for Thank today's everybody to us call. want joining on

As Chris and intend and success of certainly on. the on you tell, to had the proud can are track GNL we've we growth that that continue at I we are probably very and the

you in. Take again calling Bye-bye. thank all So care. for

Operator

you. concludes Thank This today's conference.

You your your you Thank disconnect this may participation. time. at lines for

Global Net Lease (GNL) 4 Nov 212021 Q3 Earnings call transcript