Global Net Lease Announces $321 Million of Completed Dispositions Through Second Quarter of 2024

Rhea-AI Summary

Global Net Lease (GNL) announced the completion of $321 million in asset dispositions by the second quarter of 2024 as part of its strategic plan. This includes $62 million from vacant assets, positively impacting net operating income. The total disposition pipeline amounts to $695 million at a 7.2% cash cap rate over a 4.4-year weighted average lease term. CEO Michael Weil emphasized that the strategy exceeds 2024 guidance, aiming to reduce leverage and support long-term growth. Proceeds from these sales will focus on debt reduction, clearing $155 million of outstanding debt and resulting in no debt maturities through July 2025. GNL has provided a detailed slide on these developments in a Current Report on Form 8-K filed with the SEC.

Positive

• $321 million in completed asset dispositions by Q2 2024.
• $62 million in vacant asset sales, improving net operating income.
• Total disposition pipeline of $695 million at a 7.2% cash cap rate.
• Exceeded 2024 guidance with strategic disposition plan.
• Proceeds aimed at reducing leverage and fostering long-term growth.
• Cleared $155 million in outstanding debt, with no maturities until July 2025.

Negative

• None.

Insights

Financial Analyst

Global Net Lease, Inc. (GNL) has announced a significant achievement in its 2024 strategic disposition plan, with $321 million of completed dispositions. This move aims to lower the company's leverage and enhance long-term growth. Notably, the sale of $62 million in vacant assets will help eliminate negative impacts on net operating income, signaling prudent asset management.

From a financial perspective, using proceeds to reduce outstanding debt aligns with GNL's goal of improving its financial health. The company has addressed all $155 million of debt maturing in 2024, ensuring no maturities until July 2025. This will likely translate into better liquidity and potentially more favorable terms if further refinancing is needed. Additionally, the achieved 7.2% cash cap rate on the dispositions, compared to standard cap rates in the net lease sector, indicates a favorable transaction environment.

For the short term, this strategy brings immediate relief from debt pressures, while long-term benefits include a stronger balance sheet and improved financial ratios. Retail investors can take note of how these actions are likely to bolster GNL's financial position, possibly resulting in more stable or gradually increasing dividends.

Market Research Analyst

GNL's dispositions totaling $695 million reflect a strategic approach to portfolio management, aimed at streamlining operations and focusing on high-performing assets. The weighted average lease term of 4.4 years for the disposed assets indicates a strategic reallocation rather than a fire-sale situation, which is positive.

By aligning GNL's financial metrics more closely with industry peers, the company is positioning itself for a potentially higher market valuation and increased investor confidence. This move can be seen as an effort to align with industry best practices, making GNL more competitive in the net lease space.

For retail investors, this strategic disposition represents a deliberate move to enhance overall portfolio quality and operational efficiency. Understanding the broader market impact, this could also hint at future growth opportunities as GNL repositions itself within the sector.

Including Pipeline, Dispositions Total $695 Million at a 7.2% Cash Cap Rate on 4.4 Years of Weighted Average Lease Term¹

NEW YORK, July 09, 2024 (GLOBE NEWSWIRE) -- Global Net Lease, Inc. (NYSE: GNL) (“GNL” or the “Company”) today announced continued progress on its 2024 strategic disposition plan.

“We are efficiently executing our strategic disposition plan, resulting in over $321 million of completed dispositions through Q2 2024, including $62 million of vacant assets that will eliminate negative impact on our net operating income,” said Michael Weil, CEO of GNL. “The progress on GNL’s disposition strategy has exceeded our 2024 guidance, reflecting our ongoing commitment to provide value to our shareholders by lowering leverage and creating long-term growth. We intend to use the net proceeds from these dispositions to further reduce outstanding debt and bring our Net Debt to Adjusted EBITDA more in line with our net-leased peers.”

GNL has successfully addressed the remaining $155 million² of outstanding debt previously scheduled to mature in 2024, resulting in zero debt maturities through July 2025.

GNL has furnished a slide detailing the progress of its 2024 strategic disposition plan with a Current Report on Form 8-K with the Securities and Exchange Commission on the date hereof.

About Global Net Lease, Inc.

Global Net Lease, Inc. is a publicly traded real estate investment trust listed on the NYSE, which focuses on acquiring and managing a global portfolio of income producing net lease assets across the United States, and Western and Northern Europe. Additional information about GNL can be found on its website at www.globalnetlease.com.

Important Notice

The statements in this press release that are not historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. The words such as "may," "will," "seeks," "anticipates," "believes," "expects," "estimates," "projects," “potential,” “predicts,” "plans," "intends," “would,” “could,” "should" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the risks associated with realization of the anticipated benefits of the merger with The Necessity Retail REIT, Inc. and the internalization of the Company’s property management and advisory functions; that any potential future acquisition or disposition by the Company is subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all. Some of the risks and uncertainties, although not all risks and uncertainties, that could cause the Company’s actual results to differ materially from those presented in its forward-looking statements are set forth in the Risk Factors and “Quantitative and Qualitative Disclosures about Market Risk” sections in the Company’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and all of its other filings with the U.S. Securities and Exchange Commission, as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

Contacts:
Investor Relations
Email: investorrelations@globalnetlease.com
Phone: (332) 265-2020

Footnotes:
¹ Disposition data as of July 5, 2024, includes transactions that are either closed or under agreement or letter of intent, and assumes purchase agreements and letters of intent lead to closing based on their contemplated terms, which cannot be assured.
² The $155 million of outstanding debt as of May 1, 2024 was addressed through GNL's disposition strategy or placed onto GNL’s Corporate Credit Facility.

FAQ

What is the total value of asset dispositions completed by Global Net Lease in 2024?

Global Net Lease completed $321 million in asset dispositions by the second quarter of 2024.

What impact do the vacant asset sales have on GNL's net operating income?

The $62 million of vacant asset sales will eliminate the negative impact on GNL's net operating income.

What is the total value of Global Net Lease's disposition pipeline?

Global Net Lease's disposition pipeline totals $695 million.

What is the cash cap rate for GNL's disposition pipeline?

The cash cap rate for GNL's disposition pipeline is 7.2%.

How will GNL use the proceeds from its asset dispositions?

GNL plans to use the proceeds to reduce outstanding debt and bring its Net Debt to Adjusted EBITDA more in line with its net-leased peers.

What is the status of GNL's debt maturities through July 2025?

GNL has cleared $155 million of outstanding debt with no maturities through July 2025.

Where can I find more details about GNL's 2024 strategic disposition plan?

More details are available in a slide furnished with a Current Report on Form 8-K filed with the SEC.