Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q1 2023 Earnings Presentation
25 slides from Global Net Lease's earnings presentation, May 10, 2023
Slide 1: Global Net Lease First Quarter 2023 Investor Presentation
Global Net Lease Pictured – McLaren Campus in Woking, U.K. First Quarter 2023 Investor Presentation
Slide 2: First Quarter 2023 Company Highlights
FIRST QUARTER 2023 COMPANY HIGHLIGHTS Best-in-Class, Mission Critical, Net Lease Focused Portfolio: Featuring high portfolio occupancy of 98% and complete Original Cash 1 Rent collection(1) for the tenth consecutive quarter, highlighting strong overall operating performance Differentiated Strategy w
Slide 3: First Quarter 2023 Portfolio Highlights
FIRST QUARTER 2023 PORTFOLIO HIGHLIGHTS Portfolio Overview Q1’23 Properties 317 Square Feet (millions) 39.6 Tenants 140 Industries 52 Countries and Territories 11 Leased 98.0% Weighted Average Remaining Lease Term(1) 7.8 years % of SLR derived from Investment Grade Tenants(2)(3) 59.6% % of leases wi
Slide 4: Geographically Well-Balanced & High Investment Grade Tenancy Supports Continued Portfolio Growth
GEOGRAPHICALLY WELL-BALANCED & HIGH INVESTMENT GRADE TENANCY SUPPORTS CONTINUED PORTFOLIO GROWTH Credit Rating(1)(2) Geography(1) Not Rated 4% United Kingdom 22% Investment Grade Non-Investment 60% Grade Rated 36% Netherlands 4% United States & Canada 61% Finland 4% Germany 3% France 2% Channel Isla
Slide 5: Attractive Portfolio in Line with Investment Grade Rated Peers
ATTRACTIVE PORTFOLIO IN LINE WITH INVESTMENT GRADE RATED PEERS GNL’s portfolio features leases to primarily Investment Grade rated tenants with contractual rental increases and is diversified across select North American and European countries, resulting in favorable comparisons to GNL’s investment
Slide 6: Best-in-Class Top Ten Tenant Base
BEST-IN-CLASS TOP TEN TENANT BASE Top Ten Tenants % of Tenant Credit Rating Country Property Type SLR(1) Caa1(Moody’s) U.K. Industrial 5% / B- (Fitch) U.S. / Baa2** Distribution 4% Canada U.S. / Industrial / Baa1 4% Italy Distribution Aaa** U.S. Office 3% B1* U.K. Office 3% Industrial / Baa2* U.S. 3
Slide 7: Focus on World-Class Tenants in Quality Sovereign Debt Rated Countries
FOCUS ON WORLD-CLASS TENANTS IN QUALITY SOVEREIGN DEBT RATED COUNTRIES Best-in-class portfolio leased to primarily Investment Grade(1) rated tenants across North America and Europe Only Focused on Markets with Quality Sovereign Debt Ratings (S&P) The U.S. Finland Luxembourg Germany Canada U.K. Franc
Slide 8: Comprehensive Hedging Program
COMPREHENSIVE HEDGING PROGRAM GNL believes that its comprehensive hedging program performed exceptionally well in 2022 and thus far in 2023, reducing adverse impacts from a volatile currency and interest rate environment and resulting in $9.2 million and $0.9 million of realized gains on derivative
Slide 9: Differentiated Investment Process
DIFFERENTIATED INVESTMENT PROCESS GNL’s diligent underwriting process and on-going tenant monitoring results in a portfolio of creditworthy tenants who perform under their long-term lease commitments Structuring & Pricing • Long term net leases with contractual rental increases(1) • Disciplined cont
Slide 10: Diligent Acquisition Program
DILIGENT ACQUISITION PROGRAM Management continues to diligently evaluate domestic and international sale-leaseback transactions to generate attractive risk-adjusted returns Acquisition Credit Property Purchase Price Wtg. Avg. Wtg. Avg. Lease Acquisition Name Status Rating Type (in mm)(1) Cap Rate(2)
Slide 11: Proactive Renewal and Expansion Leasing Activity
PROACTIVE RENEWAL AND EXPANSION LEASING ACTIVITY In Q1’23, GNL completed seven lease renewals for approximately 678,500 SF that resulted in nearly $40 million of net new SLR and a new weighted average Remaining Lease Term of 7.0 years 2023 Lease Extensions + Expansions Lease Expiration Schedule(1) (
Slide 12: Global Geographic Balance
GLOBAL GEOGRAPHIC BALANCE U.S. and Canada Europe Number of Assets: 236 Number of Assets: 81 Weighted Average Remaining Lease Term: 8.2 years(1) Weighted Average Remaining Lease Term: 7.5 years(1) % of GNL SLR: 61.0%(2) % of GNL SLR: 39.0%(2) Note: Metrics as of March 31, 2023, unless otherwise noted
Slide 13: Continued Portfolio Focus on Diversified Industrial and Distribution Assets
CONTINUED PORTFOLIO FOCUS ON DIVERSIFIED INDUSTRIAL AND DISTRIBUTION ASSETS Continued Focus Towards Industrial and Distribution Properties and Balanced Geographic Diversification March 31, 2022 March 31, 2023 Property Type Concentration(1) Retail 3% Retail 5% Office 42% Office 40% Industrial & Indus
Slide 14: First Quarter 2023 Performance Highlights
FIRST QUARTER 2023 PERFORMANCE HIGHLIGHTS Key Operating Highlights • In Q1’23, GNL closed on an eight-property portfolio leased to Boots UK Limited, a subsidiary of Walgreens Boots Alliance who has a Moody’s credit rating of Baa2, for $75.5 million and at a 10.6% Weighted Average Cap Rate with a wei
Slide 15: First Quarter 2023 Key Metrics
FIRST QUARTER 2023 KEY METRICS Debt Metrics Debt by Currency Metric Q1’23 CAD 1% Net Debt to Enterprise Value(1) 60.3% GBP Net Debt to Adjusted EBITDA (Q1’23 annualized)(2) 8.3x 18% Interest Coverage Ratio(3) 2.9x Weighted Average Interest Rate(4) 4.4% EUR 22% USD 59% Weighted Average Debt Maturity(
Slide 16: Fully Aligned Management Structure
FULLY ALIGNED MANAGEMENT STRUCTURE Fully integrated external management team creates a highly scalable platform with a proven, global sale-leaseback origination network James L. Nelson Chris Masterson Chief Executive Officer and President Chief Financial Officer, Treasurer and Secretary • Joined GNL
Slide 17: Forward Looking Statements
FORWARD LOOKING STATEMENTS The statements in this presentation that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. In addition, words such as “may,” “wi
Slide 18: Risk Factors
RISK FACTORS The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements. • We may be unable to acquire properties on advantageous terms or our propert
Slide 19: Risk Factors (Continued)
RISK FACTORS (CONTINUED) • Our tenants may not be diversified including by industry type or geographic location. • In owning properties we may experience, among other things, unforeseen costs associated with complying with laws and regulations and other costs, potential difficulties selling properti
Slide 20: Disclaimers
DISCLAIMERS • This presentation includes estimated projections of future operating results. These projections were not prepared in accordance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation
Slide 21: Definitions
DEFINITIONS • Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an appro
Slide 22: Definitions (Continued)
DEFINITIONS (CONTINUED) • In calculating Core FFO, we start with FFO, then we exclude certain non-core items such as acquisition, transaction and other costs, as well as certain other costs that are considered to be non-core, such as debt extinguishment costs, fire loss and other costs related to da
Slide 23: Definitions (Continued)
DEFINITIONS (CONTINUED) • As a result, we believe that the use of FFO, Core FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance including relative to our peers and a more informed and appropriate basis on which to make decis
Slide 24: Non-GAAP Reconciliations
NON – GAAP RECONCILIATIONS Three Months Ended (Amounts in thousands) March 31, 2023 March 31, 2022 EBITDA: Net (loss) income $ (890) $ 10,541 Depreciation and amortization 37,029 39,889 Interest expense 26,965 24,123 Income tax expense 2,707 3,095 EBITDA(1) 65,811 77,648 Impairment charges – 230 Equ
Slide 25: Non-GAAP Reconciliations
NON – GAAP RECONCILIATIONS (Amounts in thousands) Revenue from tenants – Quarter Ended March 31, 2023 $ 94,332_ Foreign currency translation impact (using average foreign currency exchange rates for the first quarter of 2022) 3,176_ Revenue from Tenants (year over year constant currency adjusted): $