Global Net Lease, Inc. Q3 FY2025 earnings call

Key Points

• Approximately 2 years since internalization, proud of achievements and enthusiastic about future. Set strategic goals to streamline portfolio, reduce leverage, lower cost of capital, exceeding objectives with measurable benefits including investment-grade credit rating from Fitch.
• Prudent disposition program: sold ~$3 billion of assets since Q3 2024, including ~$1.8 billion multi-tenant retail portfolio sale in June 2025, reducing net debt by ~$2 billion. Noncore single-tenant asset sales had a 7.7% cash cap rate.
• Refinanced revolving credit facility in August 2025, extending maturity to August 2030, reducing interest rate spread by 35 basis points.
• Portfolio at end of Q3 2025: over 850 properties, ~43 million rentable sq ft, 97% occupancy, weighted average remaining lease term 6.2 years, 60% investment-grade tenants. Leased over 1 million sq ft in Q3, strong office lease renewals (e.g., 10-year renewal with GE Aviation, 20-year with GSA), 100% rent collection in office portfolio, minimal lease rollover.

In the third quarter of 2025, Global Net Lease recorded revenue of $121 million and a net loss attributable to common stockholders of $71.1 million. AFFO was $53.2 million or $0.24 per share. The gross outstanding debt balance was $3 billion at the end of Q3 2025, a reduction of $2 billion from Q3 2024. The net debt to adjusted EBITDA ratio was 7.2x, with the guidance range for 2025 being 6.5x to 7.1x. Liquidity was approximately $1.1 billion, and the revolving credit facility capacity was $1.2 billion as of September 30, 2025.

Forward-Looking

• Raised AFFO per share guidance for 2025 to a new range of $0.95 to $0.97.
• Reaffirmed net debt to adjusted EBITDA range of 6.5x to 7.1x.

Risks

• Market risks related to cap rate expectations not aligning with cost of capital, seller expectations, and borrowing costs. Impact of interest rate changes on the cost of capital for the company.

Q: On the quarter. Michael, you mentioned acquisitions don't look attractive to you in today's environment. I'm just trying to understand what needs to happen for you to become an active buyer again? And if so, what would be sort of your funding plans for that?

A: We would look to finish our disposition program, which we are in the late innings of. We're monitoring the acquisition environment, but cap rate expectations from sellers don't match up to cost of capital. Our #1 goal is to continue debt reduction. The 12% accretion yield from stock buyback is impactful, and we'll drive greatest benefit for shareholders through debt reduction and share repurchase.

Q: Just a little bit of occupancy decline quarter-over-quarter. Anything specific there that you want to reference that might have driven that? Was it opportunistic? Was it part of the asset recycling? Anything specific?

A: It's opportunistic related to a tenant expiration in the U.K. portfolio. We're actively engaged on new leasing there, and we'll finish the year much closer to fully occupied than the 97% reported at quarter-end.

Q: This quarter, you had a good renewal leasing spread of 26.4%. Just wondering how achievable this is going forward, especially on your industrial lease expirations? And also, if you could disclose that figure, including new leases, that would be appreciated.

A: Q3 renewal spread was 26%, year-to-date 18.5%. Spreads are strong due to tenants valuing their critical real estate, asset management team engaging 2 years out from lease expiration. Renewal spreads can be higher as tenants catch up to market rates, both renewals and new leases add value to the portfolio