Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Q3 2023 Earnings Presentation
33 slides from Global Net Lease's earnings presentation, Nov 8, 2023
Slide 1: Global Net Lease Third Quarter 2023 Investor Presentation
Global Net Lease Pictured – McLaren Campus in Woking, U.K. Third Quarter 2023 Investor Presentation
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation does not constitute an offer to sell or a solicitation of an offer to purchase any securities of Global Net Lease, Inc. (“We” or the “Company”). Any offer or sale of securities will be made only by means of a prospectus and related documentation meeting t
Slide 3: Projections
PROJECTIONS This presentation also includes estimated projections of future operating results. These projections are 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 presentatio
Slide 4: Global Net Lease
GLOBAL NET LEASE Third largest publicly traded global net lease REIT with $9.2 billion of gross asset value(1) and the flexibility to invest in multiple markets and segments given its global presence and diversified portfolio Quality of Earnings Substantial Synergies Growth Prospects GNL’s diversifi
Slide 5: Third Quarter 2023 Financial Highlights
THIRD QUARTER 2023 FINANCIAL HIGHLIGHTS Third quarter financial results reflect 73 days of standalone pre-merger GNL and only 19 days of post-merger, internalized GNL and RTL results Debt Capitalization ($mm) Q3’23 Earnings Summary ($mm) Q3’23 Total Secured Debt $2,730 Net Loss Attributable to Commo
Slide 6: Substantial Merger Synergies and Internalization Savings
SUBSTANTIAL MERGER SYNERGIES AND INTERNALIZATION SAVINGS As a direct result of the Merger, GNL recognized $56.2(5) million of annualized cost synergies exceeding the original $54 million that was estimated at transaction close Synergies Recognized in Q3 2023 (000’s) Category Estimated Annual Savings
Slide 7: GNL Capitalization and Balance Sheet Strategy
GNL CAPITALIZATION AND BALANCE SHEET STRATEGY Balance Sheet Highlights Net Debt to Adjusted Annualized EBITDA(1)(3)(5) ▪ Plan to maintain conservative financial and credit policies and expect to further de-lever the balance sheet through operating expense 8.3x savings, potential non-core asset sales
Slide 8: Portfolio Snapshot
PORTFOLIO SNAPSHOT Portfolio Overview Q3’23 Properties 1,304 Square Feet (millions) 66.8 % Leased 96% Weighted Average Remaining Lease Term (“WALT”)(1) 6.9 years % of SLR Derived from United States & Canada vs. Europe 81% | 19% Industries 96 Tenants 815 % of SLR derived from Investment Grade Tenants
Slide 9: Sector Leading Net Lease REIT
SECTOR LEADING NET LEASE REIT Third largest publicly-traded net lease REIT with a global presence(1) Gross Asset Value ($ in millions) REITs with Global Presence (2) $59,466 $22,455 $10,112 $9,188 $7,647 $5,947 $4,820 $4,632 $3,060 $1,888 $1,828 Source: Company filings, company websites, FactSet, S&
Slide 10: High-Quality Investment-Grade Tenants
HIGH-QUALITY INVESTMENT-GRADE TENANTS Top ten tenants represent 21.0% of SLR with no single tenant accounting for more than 3.1% Top Ten Tenants Tenant Credit Rating Country Property Type % of SLR(1) Implied: Baa2 U.S. Single-Tenant Retail 3.1% Actual: Baa2 U.S. / Canda Industrial & Distribution 2.7
Slide 11: Third-Largest Publicly Traded Net Lease REIT with a Global Presence
THIRD-LARGEST PUBLICLY TRADED NET LEASE REIT WITH A GLOBAL PRESENCE Geographic Presence FIN NEW PACIFIC BRUNSWICK NORTHWEST NB WA MIDWEST ME NETH NORTHEAST MT ND VT NH LUX OR MA UK MN NY ID SD WI RI MI GER WY NJ CT PA IA DE MID- CI NE OH NV IL IN MD UT WV VA DC ATLANTIC CA CO NC KS MO KY FR NC TN OK
Slide 12: Attractive Yield with Embedded Potential Upside
ATTRACTIVE YIELD WITH EMBEDDED POTENTIAL UPSIDE Attractive Upside ▪ GNL, now an internally managed REIT, is expected to trade to our peer average AFFO multiple given the quality of income and superior investment-grade worthy tenants in our portfolio(3)(4) ▪ GNL’s post-merger quarterly dividend polic
Slide 13: Attractive Lease Maturity Schedule
ATTRACTIVE LEASE MATURITY SCHEDULE Unique investment mix of strategically located suburban shopping centers and stable long-term single-tenant net-leased assets results in a favorable lease maturity schedule and a weighted average Remaining Lease Term of 6.9 years Multi-Tenant Retail Lease Maturity
Slide 14: Continued Leasing Momentum Driven by Strong Asset Management Capabilities
CONTINUED LEASING MOMENTUM DRIVEN BY STRONG ASSET MANAGEMENT CAPABILITIES Leasing momentum continues in Q3 2023 with 100 lease renewals and new leases, over 1.8 million square feet and nearly $17 million of net straight-line rent Q3 2023(1) Leasing and Renewal Activity Single-Tenant Portfolio Multi-
Slide 15: Well Positioned Portfolio with Key Metrics
WELL POSITIONED PORTFOLIO WITH KEY METRICS Industrial & Multi-Tenant Single-Tenant Single-Tenant Total Portfolio(1) Industrial Distribution + Retail + Retail + Office Number of 1,304 218 109 886 91 Properties Square Feet 66.8 33.6 16.4 7.9 8.9 (millions) SLR $728 $229 $199 $153 $146 ($ millions) % L
Slide 16: Diversified and Stable Tenant Base
DIVERSIFIED AND STABLE TENANT BASE Asset Diversification Credit Rating(1)(2) Total Portfolio Annualized SLR by Segment Not Rated 7% Single-Tenant Single-Tenant Retail Office 21% 20% Single-Tenant Non-Investment Investment Grade (2) $728.3 73% Grade 58% million 35% Multi-Tenant Industrial & Retail Di
Slide 17: Industrial & Distribution Overview
INDUSTRIAL & DISTRIBUTION OVERVIEW Segment Highlights Lease Maturity Schedule (% of Total SF) 32% 218 33.6M 8.0 Years Weighted Average Lease Term Total Portfolio(1) Properties Square Feet 31.1% 18% 100% 8.0 Years CPI Increases(1) Leased WALT 6.6% 7.2% 56% 93% 1.6% 2.6% 2.5% 1.5% 0.6% Average Annual
Slide 18: Multi-Tenant Retail Overview
MULTI-TENANT RETAIL OVERVIEW Segment Highlights Lease Maturity Schedule (% of Total SF) 5.1 Years Weighted Average Lease Term 27% 109 16.4M Total Portfolio(1) Properties Square Feet Anchor Tenants: In-Line Tenants: 5.4 Years 4.0 Years 8.8% $199M 92.9% 5.1 Years SLR Leased + Pipeline WALT 3.0% 3.5% 2
Slide 19: Multi-Tenant Retail Overview
MULTI-TENANT RETAIL OVERVIEW Power Centers Anchored Centers Grocery Centers Key Stats Key Stats Key Stats Number of Centers 56 Number of Centers 32 Number of Centers 21 Square Feet 9.9 million Square Feet 3.1 million Square Feet 3.4 million % of Multi-Tenant SLR 57% % of Multi-Tenant SLR 21% % of Mu
Slide 20: Single-Tenant Retail Overview
SINGLE-TENANT RETAIL OVERVIEW Segment Highlights Lease Maturity Schedule (% of Total SF) 21% 886 7.9M 8.4 Years Weighted Average Lease Term Total Portfolio(1) Properties Square Feet $153M 98% 8.4 Years 7.5% SLR Leased WALT 69% 85% 1.6% 1.3% 0.8% 1.0% 1.3% Average Annual 0.0% 0.1% IG Tenants(1) Rent
Slide 21: Single-Tenant Office Overview
SINGLE-TENANT OFFICE OVERVIEW Segment Highlights Lease Maturity Schedule (% of Total SF) 20% 91 8.9M 5.1 Years Weighted Average Lease Term Total Portfolio(1) Properties Square Feet $146M 94% 70.3% SLR Leased IG Tenants(1) 5.6% 1.6% 1.7% 1.6% 94% 70.7% 0.4% 1.3% 1.1% 1.1% Average Annual Rent Escalato
Slide 22: Q3 2023 Acquisition Activity
Q3 2023 ACQUISITION ACTIVITY GNL will continue to evaluate the market for accretive acquisitions, but believe current risk- adjusted returns need to improve for the Company to be more active; GNL has simultaneously been reviewing and monitoring its portfolio for strategic dispositions that can creat
Slide 23: GNL Governance Relative to Peers
GNL GOVERNANCE RELATIVE TO PEERS GNL’s corporate governance is aligned with its industry peers No Shareholder Rights Plan (No Poison Pill in force) Opted out of the Maryland Unsolicited Takeovers Act (“MUTA”)(1) Declassified Board
Slide 24: Leadership Overview
LEADERSHIP OVERVIEW Management Board of Directors Michael Weil, Co-Chief Executive Officer Independent Directors Previously served as CEO of The Necessity Retail REIT Member of the Board of Directors of Global Net Lease, Sue Perrotty, Non-Executive Chairperson of the Board of Directors Inc. sinc
Slide 25: Key Takeaways
KEY TAKEAWAYS GNL continues to be undervalued compared to other internally managed REITs and should trade more in line with other net lease REITs on an AFFO multiple basis Irreplaceable Real Estate Proven Asset Predictable Management Income Capabilities Global Strategically Embedded Presence Located
Slide 26: Financial Definitions
FINANCIAL DEFINITIONS Non-GAAP Financial Measures This section discusses non-GAAP financial measures we use to evaluate our performance, including Funds from Operations (“FFO”), Core Funds from Operations (“Core FFO”), Adjusted Funds from Operations (“AFFO”), Adjusted Earnings before Interest, Taxes
Slide 27: Financial Definitions
FINANCIAL DEFINITIONS Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations Funds From Operations Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a measure known as FFO, whic
Slide 28: Financial Definitions
FINANCIAL DEFINITIONS Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations (Cont’d) Core Funds From Operations In calculating Core FFO, we start with FFO, then we exclude certain non-core items such as merger, transaction and other costs, settlement costs related to o
Slide 29: Financial Definitions
FINANCIAL DEFINITIONS Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations (Cont’d) Adjusted Funds From Operations (cont’d) In calculating AFFO, we exclude certain expenses which under GAAP are characterized as operating expenses in determining operating net income. A
Slide 30: Financial Definitions
FINANCIAL DEFINITIONS Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, and Cash Net Operating Income. We believe that Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization adjusted for acquisition, transactio
Slide 31: Financial Definitions
FINANCIAL DEFINITIONS Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, and Cash Net Operating Income (Cont’d) Cash NOI is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define Cash NOI as net operating inco
Slide 32: Non-GAAP Reconciliations
NON – GAAP RECONCILIATIONS (Amounts in thousands) Three Months Ended 30-Sep-23 30-Sep-22 EBITDA: Net (loss) income $(136,184) $14,838 Depreciation and amortization 49,232 37,791 Interest expense 41,161 24,207 Income tax expense 2,801 3,052 EBITDA (42,990) 79,888 Impairment charges 65,706 796 Equity-
Slide 33: Non-GAAP Reconciliations
NON – GAAP RECONCILIATIONS (Amounts in thousands) Three Months Ended 30-Sep-23 30-Sep-22 Funds from operations (FFO): Net (loss) income attributable to common stockholders (in accordance with GAAP) $(142,488) $9,739 Impairment charges 65,706 796 Depreciation and amortization 49,232 37,791 Loss (gain