GNL - Earnings call transcript Q1 2022

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Operator

Good afternoon, and welcome to Global Net Lease First Quarter 2022 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to Louisa Quarto, Executive Vice President. Please go ahead.

Louisa Quarto

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

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

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

Jim Nelson

Louisa, for for on pleased strong joining credit improved call. GNL everyone pipelines share am is today's of a and I to recast to end. Thanks, quarter positioned and leasing corporate the building, that at XXXX our you thank us well we acquisitions and to on pricing subsequent facility the based are

is rent performing Our and high-quality occupancy XXX% well, of portfolio collection. mission-critical net XX.X% lease with

portfolio from in are assets, differentiated of concentration We our advancing domestic disposition strategic distribution leases industrial building Since and up of dependable beginning this ownership industrial asset successfully basis. while extending over and international distribution class and accretive acquisitions on by XX% increasing expanding assets, GNL's opportunities pipeline strategy of the GNL's XX% to and ongoing portfolio. the and have evaluating highly of an acquisitions, XXXX, to been a increasing XX%

was of increased by growth to continue $X.XX, We X% AFFO share. to common share and AFFO million. more year-over-year quarter $XX.X drive $X.XX $XX.X to than and paid NOI million, for to more first by than the per increased per we dividends cash stockholders X% as

portfolio of period rate, a certainty is fixed rates. added Our debt providing rising in XX.X%

impact GNL's results. also efficient program, on pound of quarter euro the hedging which in the first illustrated value the The the our minimized turbulence and of

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

the renewal new of X In term. home, the expansion total and we square first Bend, activity. XXX,XXX leases last XXX,XXX annualized renewals for of our activity executed are and am $XX $XX feet. years million We GNL. renewed particularly On leasing in full South new net and basis, weighted straight-line year-over-year straight-line annualized Indiana, million Lippert portfolio remaining $XX quarter lease to rent. X growth France a million passage quarter, These net feet Auchan rent. of the leases proud with net over signed square in term Turning tenant renewal straight-line million a term XXXX. totaling expansion expire average new on average over increase a rent and Closer signed contributed square feet with I X in of renewal new over to and XX over XX% and square to after successful and it lease a in for leases lease for X.X the expansions of leasing for for leases, and provides XX-year total we foot our a weighted the lease of remaining year. These despite a

X.X Our and XX% of are XXX-property annualized of $X.X billion, term representing Canada properties the of and weighted are U.K. XXX Europe, in years. lease average our a and rent the XX% remaining in XX respectively. U.S. Geographically, Western portfolio revenue, and has straight-line

the with of including Our XX% portfolio that on based adjusted tenants our XXX industry XX% straight-line XX% more on no feature portfolio on than increases, single is XX% rent, representing straight-line rental are are annual rent. price that and diversified annual Over industries, rate based well in based the index. whole XX consumer of with leases fixed

implied and from ago. $X.X dispositions focus our XX% portfolio. X% our we and Across XX% to retail industrial retail end were After assets to we XX% annual investment-grade XXXX, in the industrial and our the of of this with year worth tenants. and of success billion first comprised mentioned, credit, office we Contributing portfolio, to of year our over and the last tenant distribution, industrial acquisitions compared the or properties distribution, on expand As rent and X% At the continue almost XX% XX% beginning activity. years. continued a retail quarter, several industrial almost concentration acquisitions of investment-grade on office is are closing straight-line comes in

XXXX, properties term to remaining. acquisitions million, and Combined, acquisitions the X XX, industrial $XX.X pipeline April and U.S. cap office includes X lease of with of rate for and property these and a closed Our XX.X over $XXX.X X.X% million which LOIs. X million, subject weighted industrial have on average years forward $XX.X totals in for

we disposition opportunities Our also that domestic targets end, and superior our corporate Management returns. recast with points than stringent evaluate it international $X.XX quarter to diligently is credit X.X-year facility Subsequent facility meet facility to evaluating investment team XX our the risk-adjusted credit and additional requirements. sale a for a generate replaced. pricing new that acquisition and leaseback continues searching lower to basis has that strategic transactions improved revolving billion term is

we with a before recast follow office Our facility, XXXX pipeline partner mission-critical to reputation the have over the that, last industrial and positions sale-leaseback acquisitions Chris? leasing activity, strong for years along up as remarks. Chris for properties, earned beyond. some successful closing walk financial in premier the and with I GNL through turn and I'll With call results to more detail over few the

Chris Masterson

Jim. Thanks,

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

We million, also quarter million, $XX.X AFFO stockholders $X.XX $XX.X million, reported attributable to of and income and in $XX.X an the or for from $X.X net to up common first increase share. revenue million with respectively, million. per $X.XX were X.X% $XX.X FFO and

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

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

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

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

acquiring of pricing. With and increase more and our year we feature to balance the corporate the leverage with some over me includes earlier. minimum ratio, Let details replaced the of X-month billion, believe the facility distribution a facility share for a benchmark than the terms strategy administered facility X.X% industrial, credit to on rate by proactively in on expansion the that and pricing will an early The over The a be on N.A., currency-specific continuing advantage benchmark active syndication an high-quality the We $X options. the rate based KeyBanc, adjusts and X.X% size office market rate take our nearly Jim prior favorable of facility on extension and and currency-specific provides interest X, of mentioned facility strengthens and certainty transaction flexibility maximum of credit could the rate. sheet lock properties.

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

Jim Nelson

rent feet pleased first recast new and on million square quarter, after lease acquisition net we million of Thank you, the progress renewals including straight-line of to facility end X.X completed for quarter very I'm during flexibility $XX and secures credit portfolio. Chris. come. with our years The our the expansions accomplishments added advantageously that

that, transactions operator, that accretive will to can we open continue for positioned the are With further and enhance questions. well We on portfolio. to line our exclusive execute

Operator

Instructions] first with [Operator question Riley. Our Bryan Maher is B. from

Bryan Maher

the of questions appetite share all? trading, rates, we're at With where impacting for is in what capital that me. seeing for your your A for XXXX acquisitions interest couple market,

Jim Nelson

our have as optimistic that it properties Well, at prices. we're focusing And on you affects buying year-over-year and really continue being high-quality do say to we I appetite wouldn't think guys accretive seen. I cautiously

Bryan Maher

fit bucket, Europe? mentioned the about bit be on dispositions. would that geographies, of North or it's dispositions of you're that whether thinking you criteria color size a us the evaluating And kind you little in what for of America would give something Can maybe

Jim Nelson

Well, constantly the very contact we close portfolio tenants. our stay review in with and

up haven't we put anything for sale. So really

going years, property look publicly to think, we and was we it had offers to a without property single-tenant listing knew even I Germany, few a property. where sold And and you Bryan, from a we the look if multi-tenant very back difficult it sale. for in We turn the stated be out property just tenant But X haven't in years was into the something. few a moving you at

to really portfolio can. we shape So in be the and possibly proactive keep the that best we try

Bryan Maher

any Great. on And any you me. of going issues seeing Europe? X on European tenants Eastern in Are Western on your for geopolitical impact more the

Jim Nelson

had in the from war effect what's zone We've properties ill any within no not. on Europe. of Absolutely going our in

still properties. rent renewals XXX% about are Our them to expanding talking We're of and still paying tenants their rent.

but great, So don't Unfortunately, the we not shape Europe. Europe. in I think Eastern in properties Europe we're in Eastern really good own any situation is in

Our credit properties within in with all Europe good countries very Western are sovereign ratings.

Bryan Maher

And out the actually last early of office pickup due come going people on a to Are so of do and leases their in a you in hearing try we tenants you? same those been seeing space, rates to debate, Are years, are coming they looking kind many of in great REITs lock for seeking we've early? the of of But from before subject leasing have or activity and me, something you know office right? some of they the rates XX% amount even higher. to we're couple going Or when to from due renew will renew? that renewals I be in what the XXXX. greater that have track, fear has seen tenants

Jim Nelson

Well, know, lease on proactive you renewals. as very I'm are we sure

So of we well to advance will tenants reach in exploration. out

successful you've in we by and as what continue. and been we to lease seen pretty publicly stated, -- expect So renewals, that we've

Operator

Thomas Our is with Markets. from question Capital next Todd KeyBanc

Todd Thomas

seeing go I trends you're just if I where today? the you you're on price ahead, targeting? to properties And the industrial, look you wondering a office that opportunity the as investments bit. you're market could little you for comment between can in back wanted composition was most sort also, discuss seeing And to that of

Jim Nelson

as of in been first, answer the XXXX, Well, acquisitions part have since over space. of second question and XX% our to distribution stated, we of beginning industrial your the

of it's our we're sale and Fortunately, asked very number us other to the portfolios. tenants do sale properties our A a leasebacks have market, on positioned well and with and huge in market. leaseback

comfortable we're very where industrial continue going we're to on focusing very, we're distribution. and going and So with

me remind question, first again the sorry. of your part I'm Now

Todd Thomas

if you're at Just price trends, how yields? trending, cap are change rates all acquisition any seeing in

Jim Nelson

people think are with interest I the where respond starting rising to Well, rates cap are. rates to in

markets years, beginning of past As compression to see quite you firm bit cap starting know, rates those we've to couple seen up, and of but and over rise. a we're the prices

rates X by interest see to rates normally, but rising cap bit about right a actually think, that follow starting now. months, of we're I So the historically,

Todd Thomas

on talk think more today, of Can funding that? at cash a in of little investments share year, availability see have, about about you're dispositions, And how you Okay. the should you little the you're about you you And the line. maybe the we terms a of thinking then end cash, a how of bit little shaking also, more leverage the sort sources bit of balance various just can funding the year? throughout out of investments, where about capital you bit just can discuss sitting on that

Jim Nelson

and ahead Chris. Go take that,

Chris Masterson

I can Sure. in. jump

liquidity million place is cash the first at the start availability. to in So $XXX we of end and I quarter, about had between guess,

acquisitions. is source great obviously there a funding rate that for for us So

also over remainder of in expect quarter. $XX million dispositions, about close the We which we have this on to

those us of that's work sources, mean, with. X a for between capital So think I I to lot

of In the would with of And where be the because that that's we in are we of said, historically, EBITDA. higher. That kind terms we're range portfolio, I of running say, obviously, been In to our debt collection. adjusted to being that, the in the going cash Xs leverage, investment-grade to really is to we've the rent strength not general, be push the expect tenants, comfortable looking leverage in. the operating low really net now,

Operator

Germain Mitch JMP from Securities. is question next Our with

Mitch Germain

Talk ability maybe Obviously, were about debt talking environment volatile. a the refinance and even the issue -- little since to you've markets right debt are in got the here leverage. about now? about been of you condition debt to there? have that to maybe debt or What the me Chris, Europe lending

Chris Masterson

maturities is that Sure. which following in it that upcoming do year. we're Well, is some next have, evaluating that something year, in Europe the the matures, the especially so we constantly in U.K., mature

monitoring and out mean time we alternatives. right we've I we're I keep And options, been favorable making that So sure and mean and have the is our we still reaching looking when to our currencies. at that some I we on that can ability advantage consistently is in to taken of. tell have draw short take credit you, the also different do that in we've advantage. the term, And something facility would many going

evaluating outside. a options that lot of have we So we are

Mitch Germain

the net Okay. you higher right last imply just are the to would given low where Got be debt for Obviously, you. Xs. remainder comment that now, the you And that about talked will year? the EBITDA in dispositions than acquisitions of

Chris Masterson

imply is to agreement. say Right have now, or wouldn't nothing we in I what else that reported we have No, million that. $XX have and under dispositions

Operator

is next Villard from with Our Ladenburg Thalmann. question James

James Villard

answered. have questions my of most been Just,

of the color Just on more of X follow-up. Can kind pipeline, you on your some of some give acquisition kind names and your us thoughts them?

Jim Nelson

big Glasgow, it package see of a closed And very terms. building centers, their call X-property in Scottish which lease. did a attractive presentation, Minister’s -- bought Fragrances], the in X government the tenant is that we're at Scotland, to other And it's the a and We there's Well, [Ascent which it when from yesterday. long then other ones can which you our Ministers, waiting close? is closed, a there's on signed very close. it's Scottish investor and LOI Home actually one, It a

Operator

I the comments. session. like closing back would of to conference Jim over for question-and-answer reached have the end We our to turn

Jim Nelson

very thank Thank And you you, all call. happy hard work joined joining company. a operator. have us us solid, today's today. And consistent to everybody very good, that on I We want to for we're

weekend. much, very have a you thank good Bye-bye. and So

Operator

today's conclude conference. This does

disconnect you for this thank may participation. your time, and lines at your You

Global Net Lease (GNL) 5 May 222022 Q1 Earnings call transcript