Global Net Lease, Inc. (NYSE:GNL) Q3 2019 Earnings Conference Call - Final Transcript

Nov 08, 2019 • 11:00 am ET

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Global Net Lease, Inc. (NYSE:GNL) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
James L. Nelson

and entered into a new loan at favorable interest rates that helped extend our weighted average debt maturity and will help fuel our continued growth.

Total revenue for the third quarter was $77.9 million up 8.4% from $71.9 million in the prior year quarter. AFFO also increased to $40.2 million from $39.6 million in the third quarter of 2018 on the strength of our recent acquisitions. On a per share basis AFFO was $0.47 per share compared to $0.57 per share during the same quarter last year due to a large termination fee received in the third quarter of last year and also the increased shares outstanding compared to last year which were offered in order to fund our acquisition pipeline. Cash NOI for the quarter was $68.6 million compared to $65.8 million in the same quarter 2018. EBITDA was $58.7 million in this quarter compared to $48.5 million in the third quarter 2018. Overall our 264 property portfolio is nearly fully occupied at 99.6% leased. 196 properties are located in the U.S. and 68 are in the U.K. and Western Europe representing 59% and 41% of annualized rental revenue respectively roughly in line with our target to reach a geographic distribution of 60% U.S. 40% Europe. Our investment-grade or implied investment-grade tenants now make up over 71% of the portfolio. Please refer to our earnings release for more information about what we consider to be implied investment-grade tenants.

Our property mix is currently 52% Office 43% Industrial and Distribution and 5% Retail. The portfolio has a weighted average remaining lease term of eight years with no near-term expirations. During the quarter we acquired 9 net lease assets comprising of about 921000 square feet for a contract sales price of approximately $102 million. These assets are leased at an attractive going-in cap rate of 6.64% and a weighted average cap rate of 7.68% with a weighted average remaining lease term of 17.1 years. These acquisitions included 7 industrial properties an office building and a lab which are all located in the United States. We are very pleased to be acquiring long-term leases at favorable cap rates while improving the mix of assets in our portfolio. I'd like to take a minute to review some of the highlights from these acquisitions. The office and lab properties we acquired during the quarter are part of a 3 pack of properties leased to VIAVI Solutions in California. The tenant has an implied Baa2 credit rating and the lease continues for 13 years. These assets total approximately 137000 square feet and were acquired for a total contract sales price of $25.7 million. The industrial properties we acquired are leased to C.F. Sauer and SWECO and are located in Kentucky South Carolina California and Florida.

C.F. Sauer is a cooking products business that makes extracts and other food products. SWECO is the world leader in particle separation and size reduction solutions. These industrial assets total approximately 790000 square feet and were acquired for a total