Global Net Lease(GNL) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q3 2023, the company recorded revenue of $118.2 million and a net loss attributable to common stockholders of$ 142.5 million [113] - Core FFO was $31.5 million or$ 0.24 per share, and AFFO was $46.9 million or$ 0.36 per share [113] - The company ended the quarter with net debt of $5.2 billion at a weighted average interest rate of 4.7% [21] - The weighted-average debt maturity at the end of Q3 2023 was 3.4 years [21] - The company reduced its quarterly dividend per share from$ 0.40 pre-merger to $0.354, reducing the amount of cash needed to fund the dividend by approximately$ 42 million on an annualized basis [112] Business Line Data and Key Metrics Changes - The single-tenant retail segment contributed $153 million to annualized straight-line rent, with 69% of tenants rated investment grade or implied investment grade [16] - The multi-tenant suburban retail segment contributed$ 199 million in annualized straight-line rent [16] - The industrial and distribution segment contributed $229 million to annualized straight-line rent, with 93% of leases including favorable rent escalations [40] - The executed leases at the end of Q3 2023 will raise occupancy in the multi-tenant portfolio to 92.9%, up from 89.5% at the end of Q2 2023 [9] Market Data and Key Metrics Changes - Geographically, 81% of straight-line rent is earned in North America, while 19% comes from Europe [15] - 61% of the straight-line rent in the portfolio comes from Sunbelt markets, which continue to grow [8] Company Strategy and Development Direction - The company aims to unlock significant value in the coming quarters and become the preeminent net lease company [23] - The merger and internalization have created the third largest publicly-traded net lease REIT based on gross asset value [14] - The company plans to focus on strategic dispositions to de-lever its balance sheet and use proceeds to pay down variable rate debt [43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future growth trajectory and the benefits of the internalized structure [47] - The company is on track to achieve$ 75 million of annualized cost savings from the merger and internalization [39] - Management noted that the current interest rate environment impacts the portion of debt that is not fixed or swapped [42] Other Important Information - The company expects to provide formal 2024 guidance around the time of the upcoming 10-K [20] - The company has a liquidity of $319.4 million, including$ 133.4 million in cash and cash equivalents [21] Q&A Session Summary Question: Will the company provide historical data for modeling purposes? - Management will get back regarding the availability of historical data for modeling [49] Question: What is the projected net debt to EBITDA ratio for Q4? - The projected net debt to EBITDA ratio is expected to be 7.6 times [30] Question: Can you provide insight on the asset sales and their timing? - The company confirmed that $185 million in asset sales has been completed year-to-date, with$ 50 million expected to close in 2024 [33][58] Question: How will the company achieve the anticipated synergies from the merger? - Management indicated that the $21 million in additional synergies will be realized over time, with expectations to have all synergies in place by Q3 2024 [64] Question: What is the outlook for occupancy rates in the multi-tenant segment? - Management aims to optimize occupancy rates between 94% and 96% for the multi-tenant segment [72]