Global Net Lease, Inc. · NYSE:GNL
Global Net Lease — Investor Presentation (September 2023)
33 slides from Global Net Lease's investor presentation, Sep 18, 2023
Slide 1: Global Net Lease September 2023
Global Net Lease September 2023 Pictured – McLaren Campus in Woking, U.K.
Slide 2: Forward Looking Statements
1 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,” “
Slide 3: Projections and industry data disclaimers
2 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 presentation of finan
Slide 4: Merger & Internalization Update
3 MERGER & INTERNALIZATION UPDATE I
Slide 5: REIT Merger and Internalization Update
REIT MERGER AND INTERNALIZATION UPDATE 4 1. For more information, refer to the Company's filings with the Securities and Exchange Commission, including the updated risk factors on a Form 8-K filed on September 18, 2023. 2. The Q4’23 projected AFFO was calculated using projected cash revenues less pr
Slide 6: Strategic Rationale and Benefits of Merger and Internalization
5 STRATEGIC RATIONALE AND BENEFITS OF MERGER AND INTERNALIZATION Sector Leading Diversified Net Lease REIT • Considerably increased size, scale, and prominence of Global Net Lease, Inc. (“GNL”) with $9.5 billion of real estate assets on a combined company basis(1)(5) • GNL is the 3rd largest publicl
Slide 7: Internalization cost efficiency and peer comparison
6 • Approximately $54mm cost efficiency created from elimination of all management fees, supplementing accretion from Merger synergies • Significantly reduced operating expense to increase cash flow to fund debt repayment, acquisitions, and increase dividend coverage • Seamless transition of asset m
Slide 8: Estimated annual savings from internalization and merger synergies
7 Category Estimated Annual Savings Description Internalization Savings Approximately $54 million in annual cost savings realized at transaction close(2) • Elimination of asset management fees, property management fees, incentive fees, equity issuance fees, and reimbursable expenses net of internali
Slide 9: Global Net Lease Today
GNL GLOBAL NET LEASE I GLOBAL NET LEASE TODAY
Slide 10: Sector Leading Net Lease REIT
9 $46,664 $19,675 $9,932 $9,511 $8,810 $6,567 $4,954 $4,472 $4,220 $2,830 $1,637 $1,455 SECTOR LEADING NET LEASE REIT Source: Company filings, company websites, FactSet, S&P Global. Note: Balance sheets as of June 30, 2023 and giving effect to the merger for GNL, unless otherwise noted. 1. Based on
Slide 11: Attractive Yield with Embedded Potential Upside
10 15.2x 15.1x 14.6x 14.3x 13.8x 13.8x 13.3x 11.7x 11.7x 11.4x 10.1x 6.9x Average: 12.8x 85% 81% 81% 80% 79% 77% 76% 74% 74% Average: 75% 70% 68% 68% 13% 6% 5% 7% 7% 6% 6% 5% 7% 6% 5% 5% Expect GNL’s quarterly dividend policy to be set at $0.354 per share ($1.42 per share, annualized) Q4’23 AFFO exp
Slide 12: Well Positioned Portfolio with Strong Key Metrics
11 WELL POSITIONED PORTFOLIO WITH STRONG KEY METRICS Note: Portfolio metrics as of June 30, 2023, and giving effect to the merger for GNL, unless otherwise noted. 1. Please see Disclaimers at the front of this presentation for important information regarding as adjusted figures giving effect to the
Slide 13: Third Largest Net Lease REIT with a Global Presence
12 MIDWEST NC FL GA AL MS LA TX NM AZ CA NV UT OR WA ID MT WY CO ND SD NE KS OK AR MO IA MN WI MI IL IN OH KY TN SC NC WV VA PA NY VT NH ME MA NJ CT MD DE DC RI NB PACIFIC SOUTHWEST SOUTHWEST MID-ATLANTIC NEW PACIFIC BRUNSWICK NORTHWEST SOUTH EAST AK NORTHEAST THIRD LARGEST NET LEASE REIT WITH A GLO
Slide 14: Diversified and Stable Tenant Base
13 Single-Tenant Industrial / Distribution 31% Single-Tenant Retail 21% Single-Tenant Office 20% Multi-Tenant Retail 28% Total Portfolio Annualized SLR by Segment Industry Exposure(1)(3) Credit Rating Asset Diversification(3) (1)(2)(3) Note: Portfolio metrics as of June 30, 2023 and giving effect to
Slide 15: Diversified and Stable Tenant Base (Cont'd)
14 DIVERSIFIED AND STABLE TENANT BASE (CONT’D) Note: Ratings information is as of June 30, 2023 and giving effect to the merger for GNL, unless otherwise noted. *Represents Implied Rating. ** Represents Tenant Parent Rating even if not a guarantor on the lease. 1. Metric based on annualized SLR as o
Slide 16: Diversified and Stable Tenant Base (Cont'd) Top 10 Tenants
15 6% 10% 11% 12% 16% 17% 17% 17% 20% 23% 70% 81% 18% 19% 19% 20% 22% 25% 30% 32% 38% 51% 70% 74% DIVERSIFIED AND STABLE TENANT BASE (CONT’D) Top 10 Tenants Percentage of Total SLR(1)(2) Source: Company filings, company websites, FactSet, S&P Global. Note: Portfolios metrics as of June 30, 2023, and
Slide 17: 2023 Acquisition Activity
16 2023 ACQUISITION ACTIVITY Note: Ratings information is as of September 15, 2023. *Represents Moody’s Implied Rating. ** Represents Tenant Parent Rating even if not a guarantor on the lease. 1. Weighted Average Cap Rate is a rate of return on a real estate investment property based on the expected
Slide 18: Leasing momentum and lease renewals
17 GNL continued leasing momentum generated in Q1’23 and has completed over 158 lease renewals and tenant expansions through July 2023(1). GNL’s leasing activity totaled 3.4 million square feet and nearly $85.5 million of net new straight-line rent 2023(1) Lease Extensions+ Expansion Project Updates
Slide 19: GNL Capitalization and Balance Sheet Strategy
18 Plan to maintain conservative financial and credit policies and expect to further de-lever the balance sheet through operating expense savings, potential non-core asset sales, organic NOI growth, and dividend policy revision Operating expense savings from Merger and Internalization to reduce leve
Slide 20: GNL Governance Relative to Peers
19 GNL’s corporate governance is aligned with its industry peers GNL GOVERNANCE RELATIVE TO PEERS Source: Company filings, company websites, FactSet 1. Market data reflects REITs that have made public announcements of opting out of the Maryland Unsolicited Takeovers Act (“MUTA”). 2. Market data refl
Slide 21: Leadership Overview
20 LEADERSHIP OVERVIEW Management Board of Directors Michael Weil, Director Refer to “Management” section for Michael Weil’s biography Michael Weil, Co-Chief Executive Officer Previously served as Senior VP of sales and leasing for American Financial Realty Trust Served as president of the Board of
Slide 22: Financial Definitions: Non-GAAP Financial Measures
21 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, Ta
Slide 23: Financial Definitions: Caution on Use of Non-GAAP Measures
22 FINANCIAL DEFINITIONS Caution on Use of Non-GAAP Measures (cont’d) We consider FFO, Core FFO and AFFO useful indicators of our performance. Because FFO, Core FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gain or loss from sales of operat
Slide 24: Financial Definitions: Funds from Operations
23 FINANCIAL DEFINITIONS Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations (Cont’d) Funds From Operations (Cont’d) Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a measu
Slide 25: Financial Definitions: Core Funds From Operations
24 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 t
Slide 26: Financial Definitions: Adjusted Funds From Operations
25 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
Slide 27: Financial Definitions: Adjusted EBITDA, NOI, Cash NOI
26 FINANCIAL DEFINITIONS Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, Cash Net Operating Income, and Constant Currency. We believe that Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization adjusted for a
Slide 28: Financial Definitions: NOI and Cash NOI (Cont'd)
27 FINANCIAL DEFINITIONS Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, Cash Net Operating Income, and Constant Currency. (Cont’d) NOI is a non-GAAP financial measure equal to net income (loss), the most directly comparable GAAP financial measure, less
Slide 29: Financial Definitions: Cash Paid for Interest, Constant Currency
28 FINANCIAL DEFINITIONS Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, Cash Net Operating Income, and Constant Currency. (Cont’d) Cash Paid for Interest is calculated based on the interest expense less non-cash portion of interest expense and amortiza
Slide 30: Non-GAAP Reconciliations: Three Months Ended March 31, 2023
29 NON – GAAP RECONCILIATIONS (Amounts in thousands) Three Months Ended March 31, 2023 March 31, 2022 EBITDA: Net loss $ (890) $ 10,541 Depreciation and amortization 37,029 39,889 Interest expense 26,965 24,123 Income tax expense 2,707 3,095 EBITDA 65,811 77,648 Impairment charges – 230 Equity based
Slide 31: Non-GAAP Reconciliations: FFO and Core FFO
30 NON – GAAP RECONCILIATIONS (Amounts in thousands) Three Months Ended March 31, 2023 March 31, 2022 Funds from operations (FFO): Net (loss) income attributable to common stockholders (in accordance with GAAP) $ (5,989) $ 5,483 Impairment charges – 230 Depreciation and amortization 37,029 39,889 FF
Slide 32: Non-GAAP Reconciliations: Three Months Ended June 30, 2023
31 NON – GAAP RECONCILIATIONS (Amounts in thousands) Three Months Ended June 30, 2023 June 30, 2022 EBITDA: Net loss $ (26,258) $ (716) Depreciation and amortization 37,297 39,359 Interest expense 27,710 23,449 Income tax expense 3,508 2,515 EBITDA 42,257 64,607 Impairment charges – 16,031 Equity ba
Slide 33: Non-GAAP Reconciliations: Revenue from Tenants and FFO
32 NON – GAAP RECONCILIATIONS Revenue from tenants – Quarter Ended June 30, 2023 $ 95,839_ Foreign currency translation impact (using average foreign currency exchange rates for the second quarter of 2022) 168_ Revenue from Tenants (year over year constant currency adjusted): $ 96,007_ (Amounts in t
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