Global Net Lease Reports Second Quarter 2020 Results

8/5/20

Global Net Lease, Inc. (NYSE: GNL), a real estate investment trust focused on the acquisition and management of primarily single-tenant industrial and office properties leased long-term to high quality corporate tenants in select markets in the United States, Europe and Canada, announced today its financial and operating results for the quarter ended June 30, 2020.

Second Quarter 2020 and Subsequent Events Highlights

  • Revenue increased 6.6% to $81.1 million from $76.1 million in second quarter 2019
  • Net income attributable to common stockholders was $1.0 million as compared to $12.6 million in second quarter 2019 due to a $7 million decrease in gains from real estate dispositions in 2019
  • Net operating income ("NOI") grew 6.1% to $73.3 million from $69.1 million in second quarter 2019
  • Core Funds from Operations ("Core FFO") was $35.4 million as compared to $38.4 million in second quarter 2019
  • Adjusted Funds from Operations ("AFFO") was $39.8 million as compared to $40.1 million in the prior year quarter
  • AFFO per share was $0.44 as compared to $0.47 in second quarter 2019 due to increased interest expense and share count
  • Distributed $35.8 million in common dividends to shareholders
  • Ample Liquidity with cash and cash equivalents of $331 million1
  • Collected 98% of second quarter cash rents as of July 31, 20202
  • Acquired eight industrial and office properties for $31 million3 at an 8.45% weighted-average capitalization rate4 with 18.1 years of weighted-average remaining lease term5
  • Total acquisitions for the six months ended June 30, 2020 approach $145 million
  • Portfolio 99.6% leased with 8.9 years of weighted average remaining lease term6, up from 8.0 years in prior year quarter
  • Increased industrial/distribution exposure by 6% year over year based on annualized straight-line rent
  • Total portfolio allocation is 48% office, 47% industrial/distribution and 5% retail at the end of the quarter compared to 53% office, 41% industrial/distribution and 6% retail based on annualized straight-line rent as of June 30, 2019
  • Closed refinancing with €70 million loan at an effective interest rate of 2.3% against seven properties in France, which, combined with previously completed refinancing of properties in Finland, Germany, the Netherlands, Luxembourg, and the U.K, constitute a complete refinancing of the Company's European assets
  • Subsequent to quarter end, closed on six loans for an aggregate of $88 million at a 3.45% interest rate, secured by six properties leased to the Whirlpool Corporation in the United States

"In the face of the unprecedented challenges presented by COVID, the GNL portfolio has continued to perform at the highest levels. Due to the strength of the underlying assets making up the portfolio, which features primarily investment grade tenants that are diversified across the United States and Europe, we collected 98% of the cash rent due in one of the toughest quarters in my career," commented James Nelson, Chief Executive Officer of GNL. He continued, "At the same time, we have remained disciplined around our long-range objectives. We completed several important financing transactions at historically low interest rates while closing on eight industrial and office acquisitions, further enhancing our balance sheet and portfolio."

Three Months Ended June 30,
20202019
Footnotes/Definitions
1Liquidity includes $14.2 million of availability under the credit facility and $316.8 million of cash and cash equivalents.
2 This information may not be indicative of any future period. The impact of the COVID-19 pandemic on the Company's rental revenue for the third quarter of 2020 and thereafter cannot be determined at present. The ultimate impact on our future results of operations and liquidity will depend on the overall length and severity of the COVID-19 pandemic, which management is unable to predict.
3 Represents the contract purchase price and excludes acquisition costs which are capitalized per GAAP.
4 Capitalization rate is a rate of return on a real estate investment property based on the expected, annualized straight-line rental income that the property will generate under its existing lease. Capitalization rate is calculated by dividing the average annualized straight-line rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) and the purchase price of the property. The weighted average capitalization rate is based upon square feet.
5 The weighted average remaining lease term in years is based upon square feet as of the date of acquisition.
6 Weighted-average remaining lease term in years is based on square feet as of June 30, 2020.
7 As used herein, "Investment Grade Rating" includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied Investment Grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant's obligation under the lease) or by using a proprietary Moody's analytical tool, which generates an implied rating by measuring a company's probability of default. Ratings information is as of June 30, 2020. Comprised of 35.7% leased to tenants with an actual investment grade rating and 29.3% leased to tenants with an Implied Investment Grade rating as of June 30, 2020.
8 Going-in capitalization rate is a rate of return on a real estate investment property based on the expected, cash rental income that the property will generate under its existing lease during the first year of the lease. Going-in capitalization rate is calculated by dividing the cash rental income the property will generate during the first year of the lease (before debt service and depreciation and after fixed costs and variable costs) and the purchase price of the property. The weighted average going-in capitalization rate is based upon square feet of the date of acquisition.
9 Comprised of the principal amount of GNL's debt totaling $2.1 billion less cash and cash equivalents totaling $316.8 million, as of June 30, 2020.
10 The interest coverage ratio is calculated by dividing adjusted EBITDA by cash paid for interest (interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net) for the quarter ended June 30, 2020. Adjusted EBITDA and cash paid for interest are Non-GAAP metrics and are reconciled below.


About Global Net Lease, Inc.

Global Net Lease, Inc. (NYSE: GNL) is a publicly traded real estate investment trust listed on the NYSE focused on acquiring a diversified global portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant, mission critical income producing net-leased assets across the United States, Western and Northern Europe. Additional information about GNL can be found on its website at www.globalnetlease.com.