Stock in the News: Global Net Lease (NYSE: GNL)

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On Thursday, Shares of Global Net Lease (NYSE: GNL) showed the bearish trend with a lower momentum of -0.42% to $18.99. The company traded total volume of 1,076,749 shares as contrast to its average volume of 697.88K shares. The company has a market value of $1.58B and about 82.96M shares outstanding.

Global Net Lease, Inc. (GNL), a real estate investment trust focused on the acquisition and management of industrial and office properties leased long-term to high quality corporate tenants in select markets in the United States and Europe, declared recently its financial and operating results for the quarter and year ended December 31, 2018.

 Fourth Quarter 2018 Highlights

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  • Revenue increased 6.9% to $71.20M from $66.60M in fourth quarter 2017
  • Net loss attributable to common stockholders was $6.70M and net loss attributable to common stockholders per share was $0.09
  • Core Funds from Operations (“Core FFO”) increased 8.3% on a year-over-year basis to $36.90M or $0.50 per share
  • Adjusted EBITDA increased 5.1% year-over-year to $53.40M
  • Adjusted Funds from Operations (“AFFO”) improved 5.6% to $37.10M, as contrast to $35.20M in the prior year fourth quarter
  • The Company believes it has a contract in principal with our former European service provider regarding an anticipated resolution of our outstanding litigation for $7.40M, resulting in a one-time, non-recurring reserve that affects net income and FFO but has no impact to the Company’s AFFO
  • Closed on the acquisition of six properties for about $212.0M. The attained properties offered nominal rental income for the period as the closings occurred on or after November 14th, with four of the six properties closed in the second half of December
  • Closed on a 10-year $98.50M multi-property mortgage loan, with a fixed interest rate of 4.9% and a 2028 maturity
  • Raised gross equity proceeds of $80.80M
  • Paid common stock dividends for the quarter of $39.10M. Weighted average shares outstanding for the respective periods were 74,001,263 and 67,286,822

Full Year 2018 Highlights

  • Revenue increased 8.8% year-over-year to $282.20M
  • Net income attributable to common stockholders was $1.10M, which includes a one-time $7.40M reserve for an anticipated resolution with our former European service provider, representing a decrease of $0.29 cents per share. Core FFO increased 10.8%, or $0.13 per share on a year-over-year basis
  • Adjusted EBITDA increased 8.9% or $17.50M to $214.80M on a year-over-year basis
  • AFFO improved 4.7% to $147.30M, inclusive of a $3.00M lease termination fee as contrast to $140.70M in the prior year. Portfolio 99.2% leased with an 8.3 year weighted average remaining lease term at year end. 78.3% of tenants rated as investment grade or implied investment grade.
  • Closed on the acquisition of 23 properties totaling 5.00M square feet for a contract sales price of about $478.00M
  • Closed on an eight-property $33.00M CMBS loan with a 10-year term.
  • Closed an upsizing of its unsecured credit facility of $132.00M for the multi-currency revolving credit facility portion of the facility and €51.80M for the senior unsecured term loan facility portion
  • Secured new UK five year £230.00M multi-property financing 
  • Raised gross equity proceeds of $179.30M. Debt maturity is 4.2 years as contrast to 3.7 years at the end of the fourth quarter 2017. Weighted average shares outstanding for the respective periods were 69,663,208 and 66,877,620.

Acquisition Highlights

During the fourth quarter, the Company closed on the acquisition of six net leased assets totaling about 1.30M square feet for a contract sales price of about $212.0M. The facilities are all located within the U.S., specifically, Michigan, Massachusetts, Alabama, Pennsylvania and Kansas. The assets were purchased at a weighted average going-in capitalization rate of 6.67%, equating to a weighted average capitalization rate of 7.23%, with a weighted average remaining lease term of 12.3 years.

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Full Year Acquisition Highlights

During the year, the Company closed on acquisitions of 23 net leased assets totaling about 5.00M square feet, for a contract sales price of about $478.00M. All of the attained properties are located within the continental U.S. The properties were purchased at a weighted average going-in capitalization rate of 7.21%, equating to a weighted average capitalization rate of 7.70, with a weighted average remaining lease term of 11.6 years.

Capital Structure and Liquidity Resources

As of December 31, 2018, the Company had $100.30M of cash and cash equivalents. The Company’s net debt to enterprise value was 53.3% with an enterprise value of $3.20B based on the December 31, 2018 closing share price of $17.62 for common shares and $24.68 for the Series A preferred stock, with net debt of $1.70B, counting $1.10B of mortgage debt. The net debt to enterprise value would improve to 50.8% if the calculation was based on closing share prices from February 22nd of $19.67 for common stock and $25.17 for Series A preferred stock.

The Company offered net profit margin of 0.10% while its gross profit margin was 79.80%. ROE was recorded as 0.00% while beta factor was 0.70. The stock, as of recent close, has shown the weekly upbeat performance of 0.90% which was maintained at 7.78% in this year.

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