GNL - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to the Global Net Lease Fourth Quarter and Full Year 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Jordyn Schoenfeld, Associate at Global Net Lease. Please go ahead.

Jordyn Schoenfeld

Thank you. thank Full joining Year and Fourth for everyone, and Quarter XXXX morning, you us for GNL's Good Earnings Call.

on and Chief today Chief me the Michael is Joining Weil, Executive Officer; Officer. Chris Financial GNL's Masterson, call GNL's

actual earnings The that the of Private to following made fourth end results XXXX. review of Securities meaning cautionary could and XXXX of the the Act our information forward-looking today. from statements release Reform statement materially the factors forward-looking forward-looking our Please during contains cause for within various Litigation section differ quarter at statements call

As GNL forward-looking obligation statements, or our stated these required to as in law. by SEC disclaims any except revise filings, update or intent

reported believe performance. measures are as of these Also, the as in XX-K with our call, February XX, during on year report discuss use, our for our of that EBITDA, Descriptions certain and in XXXX, release today's Form reconciliations the will GAAP be filed we company's can ended detailed to and evaluating we financial which non-GAAP XX, on and adjusted was such non-GAAP annual December we financial in those AFFO results in which measures useful accordance measures financial XXXX. earnings

the Mike? over I'll now turn Executive Weil. Chief call to Officer, Michael our

Edward Weil

objectives of remarkable financial Good at the Jordyn. the and GNL, for year marked the the a outlined us morning, all merger year. by time was of of Thanks, and achievement internalization XXXX thank joining you at for start today. and the of the all we

the revised term year. lease This million. to high-end these surpassed of ratio million, of from X.Xx to at million year the The $XXX in by used net end to at $XXX by adjusted high X.Xx EBITDA cash reinforcing our range occupied remaining for transactions with rate year exciting believe outstanding exceeding to most of X.X% overall year portfolio at of million weighted commitment highlights a and debt the X.X and original cap the $XXX full the enhance to reduce debt total delivering One guidance the guidance, a our million growth, completing $XXX GNL long-term and projection exceeded from shareholders. to value during meeting end dispositions on these of the strategic average assets were the We our of $XXX was proceeds net position quality of the our lowering start sales of our years.

in our delivering was volume the execution. the initiatives. result as AFFO annual significant of $X.XX, synergies. as per of range unlock of and XXXX highlighting recurring third a remaining necessity savings target and quarter This XXXX REIT, and the of value underscores with the exceeding $XX of ability to of of in to efforts totaled retail our $X.XX, million Despite our of our $XX strategy the our base cost including strength $XX accomplishment integration million initial million An additional from annual internalization strategic merger strength disciplined rent, selling share our within dispositions, original guidance $X.XX highlight of

of growth for management enhances achievement the portfolio, only to resilience the our in-house asset not our strength also the rates focus end the occupancy area from continue demand. raised XX% This of new of us of efficiency Another as renewals. attractive occupancy, to particularly we fourth reflecting sustained team. revenue We increasing positioning the leasing activity XXXX was XX% end of through quarter meet of solidifies base, but XXXX, and in as tenant XXXX as of and portfolio our quarter first the of

higher than positive with On that the attractive renewal spreads X.X were expiring leasing achieved spreads square million feet leasing front, X.X% we rents. nearly encompassing the

fourth lease the completed of of weighted in of average that weighted quarter this a X.X that X.X during renewals have leases were have lease were a term years, period XXXX completed term years. while average New

in renewal Notably, maturities. XX derisking refinancing the emphasizes and and proactively spread, facility. resulting dispositions the new that single-tenant and managing segment near-term by strategy X.X% renewals, by renewal in scheduled sheet balance our all leases to or Last, a completed multi-tenant XXXX XX new segment successfully debt revolving was our completed credit renewals, to spread. of leases on debt paid a highlighted off X.X% We the through mature financial XXXX our

We facility We issuance have and to the original through the $XXX until have an we'll or credit reduced ABS balance, bond address from $XXX debt revolving no several balance XXXX, options August and maturities have that transaction including offering. maturity million. believe unsecured to debt at million proactively our strategic XXXX refinancing

excited we about momentum continues and the our of announced We're transaction in is long-term believe the XXXX. best recently that shareholders GNL in interest achieved we

properties reduction as in disciplined We to initiative and fuel X.Xx would lower The of months ability our rating, Holdings sell growth. at cap of expected is $X.X flexibility to and substantial which long-term credit value. transaction is strategic be X.Xx. a billion EBITDA, of a most an would to capital approach deliver a to our accelerating clear focus expect range secure and on of we post-transaction, entered cost and on long-term efforts RCG RCG net benefits a the XX agreement the to for to QX will enhance cap in in improvement Ventures a meaningful range disposition of cash NOI trailing from rate wide to We we financial decrease debt adjusted represent X.X%. 'XX. multi-tenant investment-grade the to in This to the have our is expect provide significant result transaction of would debt believe This into approximately step a XXX our noncore cash rate binding based prudent which

interest the to agreed credit net to proceeds lease our financial leaving expect enhancing to multi-tenant The buyer facility, and undrawn peers X outstanding it lower expected mortgage largely the multiple to resulting revolving our gap increase the use leverage of generate potential we is the The repay loans, institutional assume flexibility. investors. most from balance net on with expansion, additional the close valuation and and

The without lease G&A would the operational into transform transaction expenditures net RCG properties. single-tenant and company with complexities, pure-play, retail GNL capital expenses a associated multi-tenant

refer it WALT that and expect information. financial extending XX% for will key X.X $X.X by investor to filed to by portfolio years. G&A additional our We enhance million boosting presentation and reducing we occupancy annually, recently to Please metrics

long-term we As mentioned, this its believe benefits the some exceeds we're important because of step far near-term taking effects.

believe dividend in reset plans flow. from aligns We reducing strategy our stock our to $XX to incremental with earnings, of quarterly share, the leverage impact be $X.XXX common to beginning declared April in reduce the generate per Board share of would transaction well and the increasing that Given [ ] expected per the dividend $X.XX liquidity, cash long-term will of million dividend with as XXXX. it

has $XXX in common RCG repurchase authorizing outstanding repurchase company also the addition a to million Board the stock. to approved also pleased program share of up We're that opportunistically transaction, to its announce the to

be at levels. given that enabled As flexibility I transaction consider to would impractical leverage an has while creating our a pace, option sale, the mentioned, us repurchases, an to previous deleverage accelerated without share possible this

accretive Our currently assets the stock real GNL Board the and available believes of estate the opportunity more for to buyback market. compared Directors in presents a compelling

billion lease during $X.X RCG the under remaining retaining portfolio. nearly billion XXXX, this appropriate while and both $X to we by approximately noncore of Through which of with scale addition average weighted that term at expect and PSA the cash rate to dispositions X.X% end of the in In February occupied under estate years. properties Including XXXX, XXXX to we $X operate assets still totals XXXX LOI, real includes our cap several transactions of closed billion dispositions a and assets. transaction, sell on anticipate X.X XX, pipeline, single-tenant year completing pipeline, are a efficiently in

our to and over fourth the weighted properties the of XX At of million X.X years. spanning X,XXX lease over Turning square portfolio. remaining rentable we quarter, average feet term a end owned

No top to geography, is types, high-risk than exposure and only and straight-line tenants monitor of and all our XX% X.X% impressive rent. carefully to industries limit total total more their straight-line contribute of business underwriting. portfolio asset operations our tenants basis. testament collectively tenant for rent, on our in to ability credit We tenants single continued portfolio's XX diversification and Our a regular accounts a

of XX%, rent everyone multi-tenant increase look an found have excludes respectively, base or earned Geographically, rental upon higher features of CPI-linked our expect and investment-grade tenants which that investor of website. earnings, the experienced can historically in portfolio the XX% an portfolio shift a is quality of Europe, our segment presentation we on impact implied which to annual the North investment-grade tenant to contractual in completing The of industry-leading rating. receiving features a in our XX% each average with stable of increases. to and high rental which with portfolio the QX portfolio, The be significantly XX% XX% sale. encourage of of our I details X.X%, portfolio XXXX an straight-line leases at and XX.X% America,

the execution. have to reflecting financial of performance disciplined set strong a on for year pleased all objectives delivered We're we XXXX, and

long-term us a forward sharpen walk focus results lease more Looking portfolio ahead, growth to In unlocking levers through GNL's ahead. our step to multi-tenant opportunities to I'll particular, financial the our matters sheet turn over Chris lie Chris? the key and in company. the enabling while call to that balance net pure-play drive about the future of we're excited represent a as sale detail. and would pivotal

Christopher Masterson

non-GAAP be our Mike. a as our is Thanks, income can on found always, net website. posted of which to release, Please earnings in that, GAAP reconciliation note measures

of strategy in that cash unwavering adjusted start million XXXX. Children disposition Through positively past to EBITDA had not $XX.X to tenant in fourth or collected of For million $X.XX a attributable the share fourth impacting net funds persistent part of in of fourth quarter our collected past compared and to to basis $XXX.X a asset the completed quarter $XX.X we respectively, in or $X.X in the office in million office per AFFO of paid loss as we quarter. leading due exposure $XXX.X America, share and team, the America common of and $XX.X Shortly X XXXX XXXX, recorded million XXXX the we accounting XXXX. million of fourth for of quarter the successfully $XX.X rent, AFFO our of million, Children stockholders year, the switch was to the years, dedication AFFO new in includes of negotiations per revenue million reduce and quarter to from fourth the properties. rent XXXX. to of $X.XX a quarter compared the the after of

balance balance quarter. at debt The down at the fourth million end the from the Looking sheet. gross of $X.X our the of $XXX.X outstanding quarter end billion XXXX, was third by of

billion multicurrency debt senior mortgage Our billion in $X.X debt. facility credit $X gross revolving and of notes, on of outstanding the $X.X is billion comprised

of from XX% As up to of or of quarter debt as the debt rates fixed XXXX, of end the fixed, is reflecting fixed to XXXX, our tied of swapped debt fourth XX, is that rates. XX% December

our to at coverage Our our adjusted billion. end was X.Xx. the debt XXXX, of and EBITDA X.X%, net on weighted average was $X.X net ratio interest of At X.Xx the rate based fourth stood quarter ratio debt interest

debt was at net the our reminder, a XXXX. start adjusted EBITDA of X.Xx As to

credit of XX, liquidity capacity XXXX, we million $XXX December facility. $XXX.X of million revolving have of As on our approximately and

we outstanding approximately on fourth million stock had a for common million Additionally, of approximately the average XXX.X shares quarter XXXX. basis weighted XXX.X and outstanding of shares

contingent per We debt AFFO is We initial range EBITDA adjusted which guidance, to to the of are portfolio. $X.XX project share on introduce of of $X.XX a pleased X.Xx. net multi-tenant to X.Xx an our guidance sale and range to XXXX

quarterly Board now to our closing dividend with back for the April to share turn Additionally, stock of common the per some call XXXX. share to dividend Mike $X.XXX expect we $X.XX, be I'll the beginning expected from remarks. as mentioned, per will Mike in reduce declared

Edward Weil

net executed million million, achieving out disposition our with debt our for start period reduced GNL, laid high target at million sales, year goal $XX we our cost million Chris. we synergy end a by of We $XX exceeded and surpassed objectives the the by successfully $XXX our in the XXXX Fiscal as year. $XXX was original productive key above $XX further estimate. million closed Thanks, of financial highly

by X.X% the XX% and end resilience complemented strong we the maintained increasing throughout Demonstrating as quality portfolio, XXXX to of year-end, of year, our occupancy across spread of renewal momentum first of quarter from a positive XX% the by the of the leasing portfolio.

successfully balance our Lastly, the manage issuance, $XXX with near-term original the since refinancing maturity million proactively reducing options. debt multiple flexibility strengthening we maturities, XXXX by

we foundation, multi-tenant sale to significantly path us would to growth. transformative potentially an a capital portfolio reducing of that deleveraging will and allowing financial strengthening milestone financial while plan cost our believe ourselves of GNL, clear a a and the accelerate secure The and step mark would for borrowing investment-grade costs leverage position lower rating, sustained credit enhancing our our By for flexibility.

the this lease Beyond simplify and with aligning vision financial a becoming owner pure-play would benefits, transaction our portfolio, refine and proposed strategic net operator. our it of

decision financial and not move, metrics, to a company the strengthen stability our thrive GNL over strategy sheet perspective integral reset the but overall and is deliberate term. the to strategic commitment portfolio our what underscores bolster term. and The long that a increased growth view we shareholders. forward-looking prioritizes tactical is and value sustainable over This transaction expect We comprehensive would transaction as flexibility. merely for to delivering balance It our GNL's long this for best and one, a would is

to open please line Operator, the you questions. answer after any available may We're the call. have questions for

Operator

Capital first from Our Upal Instructions] Rana Markets. is with KeyBanc [Operator question

Upal Rana

Congrats Is other any deal. be the just on curious it pricing Or portfolio. color, helpful. the I'm would shake where to on expected you the of out? this

Christopher Masterson

Sure.

different -- that that I'm looked we portfolio portfolio. was think underwriting We is it approached this accomplished factor. they deleveraging. had to I of asset of what There's for And a way the of their price and to finished we're and just talked so thought the But not in felt a focus America engaged deleveraging the -- shopping that We really assets. singular Bank but about is it strategy. multiyear really centers. -- saying the property things, factor, a with important accelerates execute, the a for ability about lot side single-tenant on best table not I this remember, brought am importantly, way us G&A XXX the benefits, way the important X of things saying only RCG and buyer, that only but deleveraging the not has many from this great we

against. it's a call lot transaction So to There price. we'll we aren't that feel good in billion a it, a $X.X of, the market evaluate

a their going is were satisfied. to appreciated shareholders. We term ability and great for speed, underwrite, long transaction very timing, our we their So this their to be

the made go we decision So to ahead.

Upal Rana

reservations was about making about Great. correct? you deal, closing And finish just Okay. That then and but the helpful. the RCG, already, it have on them talked bit potentially them no -- a to you on line little

Christopher Masterson

relationship how coupled nonrefundable I And with unknown they great don't. know motivated number side we're much little we of progress RCG $XX things, for And capable have certainly known And a than a we that know we We've have be but this. million no very them reservations, may years they a and professionals performing. we closing. first as making the of of the No, for smaller deposit. sophisticated frankly, backing. fact in the on very But bit a are,

Upal Rana

portfolio the is Okay. future you Great. would just which rightsizing office And dividend you especially the further makes more again, office once portfolio. addressed? again last me be then adding assume be, the Should could dividend sense, we in for there X the but dispositions, certainly are rightsized the

Christopher Masterson

prudent at have were Yes. to where to very looked looked to approach speculate we into 'XX. guidance but how the say, We in We strong issue gives reduction. at looked further one were. a for our is to for far that fulsome future, safety at the We everything. looked never want going appropriate took I this we of feel And ratio. reduction we We us an we and dividend, that we and payout at a the leverage pipeline, goals

where confident and are comfortable very we're So we today.

And over just to would I without add that of kind on answering.

RCG, this million sold And the can we that $XXX you of is deal If in close period. of have over about think NOI. with assets $X that when XXXX and about -- all just billion company will between

cut, certainly it's this be we're way I didn't the fact approach of on discuss it focused, dividend likes we based appropriate Nobody it will certainly Board from is a billion. the about kind where upon $X to it reasonable in and roughly didn't the closing. single-tenant casual billion that an $X dividend single approach of reset we So the now portfolio That's down assets, of with a casually. But any and understand. think and Board

So logic that I saying think I think we're the end of it's reduction by I'll just and for I well do frankly, forward. and analysts investors have And about. of a go that it appropriate, is us the think asked And number positioned do there. something

Upal Rana

Okay. it me. That's helpful. Great. That for was

Christopher Masterson

I'm just company. the just And million is flow, and this also to of $XX again, recurring that the strong about important fact free remember you Upal, going cash to for thing ask is which another

Operator

[Operator Eric Our next is BMO Markets. Instructions] Gordon Capital ] with question [

Unknown Analyst

question write-down if sale. was -- had that the today. at a it associated me expected $X.X a wrong, just versus there on Just portfolio with around the correct billion valued Was $X.X I'm proceeds of billion I remember I sale? I'm

you on I provide but curious color just if the helpful. may year delta could it, could anything that is? know there's So some there asset contribute you would to there be if last sales any was provide, else what that that

Edward Weil

to Chris, that? do take you want

Christopher Masterson

I'd it. like Mike, would take like you yes. to --

to on on where first, that we'll our transaction we asset We write-down. realized where be gain. values at when not RTL a So that in the books. have were a stood goes closes, billion, as and the did do actually this the books position a take we point, fully And gross they on to what over opposed GNL just that $X.X previously back came expect

Unknown Analyst

on XX definitely Okay. just lower from side, reduction XX That's would to the terms been And the thought the business line. have to CapEx annual net model. given helpful your would then little a bottom bit it have helpful. in is But lease

anything incremental would helpful. there just So be

Edward Weil

Yes. net be proactive landlord, there's net Like net. and mix just just for. works a a triple that there's REIT, budget that about double of And as we done lease to certain every need

Unknown Analyst

in how most a acquisitions? today about What of delever, is we pecking potential what continuing think -- #X priority your and then terms proceeds terms in repurchase, use a the And is order? of Okay. to should share of

Edward Weil

is stock the stock you, I will, approved will it the $XXX because and reduction hesitation, definitively, Ori overall and used But buyback of acquisitions we on with our essentially stock in buyback, of leverage course, things, use scheme Board can't the be our and very facility without majority excited a for the leverage tell proceeds to X. prioritize I I least #X, strategically. are important. of credit seeing opportunistically million and Chris buyback about taken reduction. balance will

$XXX over of transaction, RCG CMBS. million assuming little they're The a

going our it's it's leverage important, So And just going to as company. our to of liquidity change just profile. also profile the change

to So X in I what's and X that And the I see interesting ago, are to a acquisitions acquisition same cap I rates of that the debt. have would opportunities frankly, from see would very ago. us. probably with underwhelmed the an said years years much existed But market I'm time little cost forward look I standpoint. don't

a being we're really this of at participate benefit. in position going market to we'll don't that. in And a near think for So term. the present and to is be seeing because acquiring worth timing the company where the interesting accretion, that are of opportunities advantage the be able and markets very I acquisition out to near actually and for positioned that good But is term that's we're time a reshape take when fortunate us

Unknown Analyst

much. very Thank leave it will I there. you

Edward Weil

Thanks, Eric.

Operator

JMP. from question will Germain Citizens Mitch Our final with come

Mitch Germain

least to morning. the want Can Michael have what's And kidding. you -- or question, probably Michael, again. much, did ask little, Good -- next, you right? please you. give -- obviously, to pursue. are is the you word sector? something U.S. say rest you've in while so a $X don't to prevent the acquisitions you any an the barriers billion-ish, got potentially Thank some going get covenants doing to just I'm at -- or mentioned right, take. outside that Are office something there any similar there because debt transaction Are of you've you office exit barriers So certainly from that

Edward Weil

known the go. should time work there's and all, no first we've ready for RCG other time, to today. Well, then to felt rest. so we of get right a each point very to obviously, announced long nonrefundable. We're it the hard a And where We deal turned we had to that deposit be Mitch,

that point to transaction X want tranches. closing the RCG out in I is

the first the March, the The towards quarter, end the X of the at June. end next first of of end

cetera. busy loan So to transfers, be very that we're going along, is making everything sure moving et assumptions,

industrial to out, like our post-closing Prior, of is going XX%. GNL, would single-tenant come lease only that transaction, RCG distribution. straight-line from to net of rent and I point XX% retail, the was

So which industrial very I is will and predominantly we think valuable distribution, a be mix. retail,

at. will already to continue that We opportunistic look we'll spoken and about dispositions have

do We is long-term shown categorized have And that we we good that market strategic think really that what very have that doing or be tenants we we've certain we others the great to I noncore we assets. leases which office categorized well, will continue are might feel properties disposition with noncore look as about. our feel of

And we've into some for put additional full dispositions. account we've XXXX. out guidance asset taken So non-core year

in shown is getting deal our sub We market, the just the up, them something million. synergies. enjoy So we've this we're to designated. that looking going in We're knock think to I We're -- do $XX quickly. set can are clearly the of pins execution, we pretty I well. that achieved down. million We're going to Xx going like $XX deleveraging, execute We again, just think exceeded the XXXX we do forward to

talked about it. and You have I

to were we deal, to X I If for announced we what RCG XXXX we guidance. years X.X the think hadn't probably achieve announced

to hard, see really still lot but that worked 'XX. We we're team. great [indiscernible] excited there's So a

Mitch Germain

$X.X the the on have sales guidance give your take, assumed in there presentation, investor anything over you else other deck, Or that in your any top billion, that? slide that on is is of there is what's So or today?

Edward Weil

that have in slide, the If I We it -- to talk Mitch. later executing And it's pipeline. disposition -- deck our is want a talks the about can that reference successfully I plan about today. slide

Mitch Germain

billion Because It's $X.X contemplation. is almost guidance that's bulk the I under all I'm PSA, billion. done LOI. closed what Yes. got now under that of would that, right? of also, and guess recognize does on I and stuff $X is curious, I top the No, anything by it's recognize end assume second some -- right I assume of quarter. this will be the of it's

So that, we have X year. still months, a than after less

referenced So on the other thinking top now? on of the about what's be should dispositions -- right slide we

Edward Weil

think to that dispositions. The additional on we're that for EBITDA the rely 'XX opportunistic takes as and guidance you far what debt for share AFFO out as put year per I the into account XXXX. should net we at looking full

Mitch Germain

what many how you -- kind to want I'm how that think mentioned the you Can about talk little less this of I mean, or the RCG. recognize out, relationship America you curious, may bidding but some helpful. a But know with was I process I just share, mean, of I process? Okay. what played more -- be That's out. Bank I parties? bit just helping you careful

Edward Weil

portfolio to into There factors full breaking of I the at ability execute, bidders up were I'll several into there So evaluation. But were and was run and buyer the going portfolio, the best process. we that timing be. disclosed the when a we what because how of careful came only to lot the America bidders. clearly to were we've There that multiparty that's interest account did talk that were to decisioning RCG's process. They Bank full a to took It portfolio. portfolio, looking were this bidders publicly. am of were number a in the their be engage for But went

Mitch Germain

Great. Last me. for one

million. circling back to Just that $X.X

and the Chris? it's from run So should in rents operating that's sitting one-timer, remove a just right rate, that We right, now?

Christopher Masterson

Correct.

Operator

for over There time. like floor at questions hand to to further any are remarks. no back this management the closing I'd

Edward Weil

Great. Well, thanks, everybody.

us think Net always, As what giving discuss important Lease. time to for you news Global appreciate we we really some is

to And this to We the to questions. that us continue be great off continue XXXX. update and will you talking XXXX is kick forward and way on we a to We available. has progress success. finish to anybody up look for And

So thanks again.

Operator

This today's conference. concludes

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

Global Net Lease (GNL) 28 Feb 252024 Q4 Earnings call transcript