Global Net Lease (GNL) 4 Aug 222022 Q2 Earnings call transcript

Greetings and welcome to the Global Net Lease’s Second Quarter 2022 Earnings Call. [Operator Instructions] As a reminder this conference is being recorded. I would now like to turn the conference over to your host, Louisa Quarto, Executive Vice President. Thank you.

You may begin.

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

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

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

joining thank Thanks, to Louisa, on everyone today's us and call. you for

mission-critical Our occupancy Lease consecutive cash to for complete XX% collection rent quarter. with perform of seventh and well the quality high continues Net portfolio

and that quarter, lower our facility pricing facility with improved completed the the that executing yield. growth our building appreciation and assets, replaced, year term, the second facility strategy very concentration a Since We are a advancing in XX billion leases domestic distribution expanding basis increasing we XXXX a of has strategy in and dividend revolving shareholders a points the accretive portfolio of our can continue corporate to of international Early recast extending differentiated by pipeline and and successfully beginning industrial industrial class believe over capital XX% asset XX% of and portfolio it been in this helping X.X than coming of to current GNL's $X.XX GNL's well-positioned a our our is credit acquisitions class best for credit is compelling new We increasing that years. ensure portfolio. the have ownership in meaningful we assets, distribution acquisitions. of provides

paid year-over-year per Importantly, share In $XX share of common XX% rates. AFFO $X.XX. stockholders the rising dividends in second $X.XX rate, is period a to the providing quarter. by of grew with AFFO of meaningful per million to certainty our second in debt X% quarter, X.X% the fixed of and We quarter-over-quarter

of were protection our insulated place, have fluctuations AFFO nearly million. in shareholders minimize we portfolio. to the in the impact The permitted of ongoing hedging and second on Pound value us results in this comprehensive quarter program our decreased X.X to also by that focus on creating currency value from and continued the the which Euro illustrate turbulence GNL's for our With would

projects Year-to-date unique in balance paid over sheet leasing GNL's of XXXX Dakota our completed estate this GSA performance. our momentum capabilities, not lease continue second two and Our assets continued. for lease and two New and class foot and quarter, feet, have strong In properties efforts, leasing Rapid real the support $XXX XX,XXX XX% that of weighted $XX line this in expiring the best Included positive straight X% we average XXX,XXX new in X.X our FedEx until year a to as renewal square The eight global lease our XX in remaining the in leases with renewals that only almost million leases line do later. expansion square a to lease and annualized activity over rent leasing feet. net totaling Thanks tenant as term. new million was Texas, million and year, with expire for of facility rent. renewal portfolio City, straight has totaled York square or South leasing

annualized remaining respectively. of properties line Europe, Canada, U.S. established XX% have portfolio rent the and order Geographically to years At billion, in of with XX continue in weighted explorations tenants $X.X UK We and straight well on term years. in lease has and leases extend representing quarter X.X over the the whenever building possible. average in engage Western are are property a to our XXX the revenue and relationships advance our the we XX% end our XXX the of of

the XX.X% Our are tenants with based rent. based more rental line line leases. feature Based portfolio XX.X% increase our index the straight rent portfolio of are diversified annual annual on whole XX leases XXX representing rent based is and X.X% that cash and industry industries with consumer no on other of fixed from XX% due escalators time price Almost on rate. XX% measures. over approximately are straight approximately increases of which lease well the is than single these on

XX% the to at and industrial we and we the of portfolio. of and or the purchase second properties grade the industrial Contributing of to our XX.X of rate distribution, the from years. X% line dispositions grade office office last the our and several because an [AaX] in tenants. one over As of tenant remaining. retail composed and annual X.X% the to investment implied concentration the XX% property XXXX. second building $XX.X and in In continue term average weighted Scottish leased is portfolio were the office of completed quarter of located two compared and lease that credit, rent end are strategically quarter These and the properties the mentioned, of properties to a focus were is investment distribution, of acquisitions non-core total office a success industrial comes quarter, At cap The Across over acquired industrial our industrial acquisition at years our expand straight end X% on retail second million. properties and we assets for ministers XX% the located XX% U.S. retail XX% credit. industrial at price

Our on property investment focused years total we cap on and acquisition of have $XXX strategy in to acquired agreed we in industrial We XX.X approximately of price, million UK industrial Europe. already with in million terms remaining. XX net The during rate bring totaled and comprised lease of with a these triple the XX clear. single remain purchase dispositions have over over the of for distribution properties America pipeline that is our is And one second properties million and quarter, of properties year. weighted acquiring value would two to differentiated the sold and tenant, additional properties the sell in average term North X% have property. Combined they

class. will We by our on continue dependable to distribution highly grow the and portfolio asset focusing industrial

renewals expansions the critical the weighted and mission years. lease eight derived that exceeds average speak the where we successful investment is grade from nature XX% remaining of lease where own of the and properties to Our tenants, over term rent

the progress follow We look future to rest are I financial before call the I'll more year. up closing results building through the the Chris our turn with on well-positioned some over remarks. and With in to to that Chris? for walk the detail throughout forward of I

Jim. Thanks,

common million $X.XX we FFO share. for loss with For quarter or the and were stockholders and $XX.X second $XX respectively, $XX.X second for million. per of $X.X AFFO quarter and XXXX a net attributable the revenue million $X.XX million to recorded

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

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

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

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

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

our to growth, accomplishments questions. acquisitions during our the Thank to we leasing to line strategy activity. and facility you, we that continue the The are Chris. earnings in and second I'm quarter our recast well-positioned With portfolio secures on with come. advantageously very execute our for can and flexibility class credit best for operator, open including our acquisition pleased we completed, years and grow progress

comes this of Our At with with from question. B. line answer Securities. Please proceed a be you. first question and session. Riley [Operator time, Thank question Instructions] your Maher the conducting Bryan we'll

Brian. you? morning Good are How

the Good component don't I all miss Chris European the Good. elaborate did of maybe and for if can comments. on know those afternoon. assets. hedging Thanks I

kind does you between? that's revenues of explain If bit that that'd think the and off for that hedging were the AFFO? the you somewhere is total where revenues little And that great. both be hedging better could a I impacts in quarter. Are the we our in

Sure.

mentioned derivatives the the That the on So call saw we of revenue. positively we the on really forwards the gains line. settled the actual that AFFO. some in the during had That's we helps had does that offset realized on gains quarter. the million decrease of hedging through comes And impact positive X.X that That that FX impact.

Okay.

do don't it we revenue, it we So line? on see the AFFO in see

Corrected. It does flow through AFFO.

Great, then anything every you dynamics the market sellers. the to four sure that acquisition the widen in over on Are spread and see bid buyers seems between the next changes thanks. bid day outlook your to seeing the quarters? Jim, the two outlook. And I'm ask you acquisition

Brian. question perfect the That's

I quarter, extremely occurs careful of we now last the call, last which because in changing interest our on said were interest remember funds rates right the rising you rate If rising cap in usually environments. deploying being And environment. during rates,

lately, our before, ask really, much a maybe So at up cap better what annual deal at much and is are we're in an we've increase at X%, we're for flow seeing bid we're benefit. been what those both rate also basis. a annual X.X% basically, the rents. really looking We're is looking whereas is picked on And looking better our looking

to for lease we're the accretive. of makes really GAAP at the X.X% more from the basis X.X% looking Now much rent a which on it anywhere on period

to our think is I off. pay So caution starting

we're based about on the the I bring and will very we're seeing we're working optimistic think that rest what the on. deals of year

the think in rates properties that answer I of and seeing we're number encouraged by actually question. rising your So I'm right extremely the cap should now. that

And for just that. lastly, for then me on thanks Yes, dispositions.

your in or and UK Is comments on and property one And the sold what you all can is for under one think for I you had said mentioned $XX prepared you that million UK, that three? you agreement in the that [indiscernible]. more the that two number. the

And offers moving knew going much XXXX. a property out which tenant on That's is is large the past, together. and all we've had Chris. we in a done same leaving the very because property property on to this the it know before Germany of we a here. you be few offers. tenant of them It's in We've we thing being bunch years a remember, unsolicited -- number where had we ago, Correct, proactive of what was pretty sold a if we're in that a

we're which into So to that it will time doing focus the our that like on seemed we redeploy continued it, appropriate and industrial sell distribution and capital properties.

much. very you Thank Perfect.

Thank you, Brian.

you. Thank

Our next of with question comes Villard Please Ladenburg question. from line your James proceed with Thalmann.

assets? you Are as ask European U.S. I any mean, bid seen few one your in on I -- ups versus a just versus just follow Yes, difference comments. guess in the USA, the

I the rates opinion. in are mean, cap said nicely I obviously, rising the U.S. our as

I they're better continue to So we'll much current And at the out ahead, time. there that. think looking deals see

think of the sellers, property, distressed we we I see because distressed distressed distressed rate necessarily properties. because sellers, environment. not may there But don't rising may buy be interest

prepared the been rates to take In yet. last half, year, a stuff of seeing seen very on the much and again, for good But I we're in been purchasing So we've haven't that. cap Europe. advantage change we've Europe. year

we So that continue find opportunistically we buy as will the will right believe we properties. in and Europe

any as your one acquisitions? Yes. I mean just ability as more on volatility any close in currency I rates impact guess to just And the on and this on well that. is year interest having

as hasn't Well, yet. it of

this property large property, that expect did year. the wasn't Europe still hasn't it we Rates But makes certain it the property. extremely UK, haven't all attractive. to. far don't bought Well, negatively. And at very in Scottish Europe anything acquisitions it low. Ministers so one in affected us And a We we buy in but are

on follow best up European and the ones. So continue deals potential we will to close

under color. have front it's looking we guess, have close information. great of a updated finish mean, you deals in to in you as I could And you some rational just there a you? gave than the year? other year, that's this that think that Yes, do Is I pipeline expectation you more signed any LOI you acquisition

of look the But that fourth deal say our you I a can get extremely and now. robust better know, we give a can historically have quarter. don't right flow lot is you guidance. I properties as But historically we answer. think, And in Well, closed

As a flow now. deal I said we earlier very, have right very strong

optimistic very this about year. we're So

That's it. you. Thank helpful. Okay. appreciate I

you. Thank Sure. Sure.

comes with with a [Operator you. Please line Securities. Thank question JMP Germain Our next from question. Mitch Instructions] of your proceed

afternoon Good Mitch.

caps length do or of CPI? any afternoon. leases have them Good pure [indiscernible] Yes your , CPI the

Chris you to that. to want respond

Sure.

them cap, do caps. But X%. of to be do a vary have do about Some if Typically, have they would it from least lease. they

with to pushback anything Any of any you're for term, doing the on with changing Great. CPI or lease doing regards renewals is even that these that you're or lease acquisitions structure to days? regards evolving lease

the Well Mitch rate I everybody's current to that aware important note of it's think of I mean, inflation.

that annual to negotiate inflation us lot going higher because makes probably few for increase easier live it is does that what So at a least with to a a higher realized everybody we're years.

it's actually, has it been for as far So as negotiating to a things actually buy us. positive

me. for What's for plan debt question the Last the maturities?

Sure.

to guess, maturing year. about we I this So only have start, XX million

about sorry that. [indiscernible]

Right.

So into now, coming bulk closer year. next a and Definitive is a you move UK decision. we of right item that that answer for final options updated keep this. lot that's And to something looking evaluating loan the the currently we're different but we'll as making up that's on we've been big

do evaluating exactly are you to? in continue you want The that you to you'll how or Europe, debt likelihood is keep still

and right, as maturities, the closer natural in remain credit at, Euro bonds, lot to in we optionality. debt debt different that's the we Euros we I have have, hedge. or mortgage it facility. pound because the as a pounds, we debt looking But be of will the looked get Chris, we're Well, all at remain mean, these options will

refinance to it. that exploring best currently point debt the what where will way ready we're to we do the So be at

Thank you. Fantastic. Right.

Sure. Thank you.

the that Thank Mr. and you. back session. question Ladies concludes final I'll comments. and for Nelson any gentlemen, answer our floor to turn

everybody support the answered get we I those operator. really I of some every We for want it Net what this great your some joining questions hope up calls. again today's that for continue you of and on hard We of questions day good thank thank us Global Yes, you you which is. had Lease. thank And work to have. make to listening the to company

that with operator, everybody. close can call. we the So you, Thank

Thank you. This today's concludes conference.

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