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Global Net Lease (NYSE: GNL) reported first-quarter 2026 results and outlined a strategic shift toward growth through industrial acquisitions and office dispositions, highlighted by its planned all-stock acquisition of Modiv Industrial.
Chief Executive Officer Michael Weil said the Modiv transaction reflects the company’s approach discussed on its prior earnings call: recycling capital into higher-quality industrial and retail assets while reducing office exposure. Weil said Global Net Lease entered 2026 after a “transformational year” that reduced leverage, strengthened its credit profile and improved portfolio quality.
The planned acquisition is expected to close in the third quarter of 2026. Weil said the transaction is expected to be immediately accretive, adding approximately 4% to adjusted funds from operations (AFFO) per share, including cost synergies from eliminating duplicative general and administrative expenses.
The deal is structured as an all-stock acquisition with a fixed exchange ratio of 1.975. Weil said the structure is leverage neutral and requires no new external capital.
Weil said Modiv’s portfolio includes long-duration leases with a weighted average lease term of 15 years, 2.4% annual rent escalations, and a tenant base that includes leading global brands. Approximately 45% of Modiv’s annual base rent comes from investment-grade or implied investment-grade tenants, according to the company.
On a pro forma basis, Weil said the acquisition is expected to extend Global Net Lease’s weighted average lease term from 5.9 years to 6.7 years, increase industrial exposure from 47% to 50%, and reduce office concentration from 26% to 24%.
During the question-and-answer session, Weil said Global Net Lease expects to retain Modiv’s industrial assets but may sell a small number of assets outside the industrial sector “very quickly after closing,” including one larger asset that could have a “meaningful impact.”
Weil declined to discuss the cap rate for the Modiv acquisition, saying additional details would be included in Modiv’s proxy materials. He also said the Modiv portfolio presents opportunities in lease renewals, dispositions and future tenant relationships.
For the first quarter of 2026, Chief Financial Officer Chris Masterson said Global Net Lease recorded revenue of $109.3 million and a net loss attributable to common stockholders of $16 million. Adjusted funds from operations totaled $43.9 million, or $0.21 per share.
Masterson said annualized general and administrative expenses declined 25% year over year to $49 million from $65 million in the first quarter of 2025, driven by operational efficiencies. Capital expenditures fell to $1.6 million from $9.8 million a year earlier.
At quarter-end, Global Net Lease had $2.6 billion of gross outstanding debt, down $1.3 billion from the end of the first quarter of 2025. Masterson said the debt consisted of $1 billion in senior notes, $290 million drawn on its multicurrency revolving credit facility, and $1.3 billion of gross mortgage debt. As of March 31, 99% of the company’s debt was fixed-rate or swapped to fixed rates.
The company’s weighted average interest rate was 4.1%, down from 4.2% in the first quarter of 2025, and its interest coverage ratio was 3 times. Net debt to adjusted EBITDA was 7.2 times, compared with 6.7 times a year earlier. Masterson said the higher ratio reflected the timing of dispositions and that the company remains confident it will stay within its 2026 guidance range of 6.5 times to 6.9 times.
Global Net Lease ended the quarter with approximately $911 million of liquidity and $1.5 billion of capacity on its revolving credit facility, compared with $499 million of liquidity and $1.4 billion of revolver capacity a year earlier.
At the end of the first quarter, Global Net Lease owned 809 properties totaling 40 million rentable square feet. Weil said the portfolio was 97% occupied, up from 95% in the first quarter of 2025, with a weighted average remaining lease term of 5.9 years.
Office occupancy increased to 99% from 95% a year earlier, which Weil attributed primarily to the sale of a $45 million vacant office property. He said the sale eliminated more than $1 million of annualized negative net operating income drag. Weil also said the office portfolio had 100% rent collection and the highest proportion of investment-grade tenants within the company’s portfolio.
Global Net Lease said 64% of its tenants carry an investment-grade or implied investment-grade rating, up from 60% in the first quarter of 2025. No tenant accounts for more than 6% of total straight-line rent, and the top 10 tenants collectively represent 29% of total straight-line rent, with 80% of that group investment-grade.
The company executed leases on more than 141,000 square feet during the quarter and achieved renewal spreads of approximately 5.1% above expiring rents. Weil highlighted renewals with Dollar General, Tractor Supply and a 58,000-square-foot FedEx distribution facility renewed at an approximately 9% spread.
Weil said Global Net Lease remains focused on lowering office exposure through selective sales and redeploying proceeds into industrial and retail assets. The company is under contract to sell a 33,000-square-foot office building leased to the General Services Administration for $13 million at a 7.2% cash cap rate, with closing expected in the second quarter of 2026.
Global Net Lease is also under contract to acquire an approximately 100,000-square-foot single-tenant industrial asset occupied by a Fortune 50 investment-grade tenant for $14 million at an 8.2% cash cap rate. Weil said the asset has a 2031 lease maturity and that the company is discussing an early long-term extension with the tenant.
In response to analyst questions, Weil said the company sold a bank branch during the quarter at a 6.2% cap rate after receiving buyer interest. He also said the company completed the sale of a vacant West Coast office property at roughly its original purchase price, removing approximately $1 million of net operating income carry.
Weil said the company sees demand for some office properties, including in Europe and the U.K., where redevelopment into mixed-use residential is occurring. He said the company expects to provide additional updates on certain assets during 2026.
Global Net Lease reaffirmed full-year 2026 AFFO per share guidance of $0.80 to $0.84 and net debt to adjusted EBITDA guidance of 6.5 times to 6.9 times. Masterson said the guidance excludes the anticipated benefit of the Modiv transaction, which the company plans to address after closing.
The company also continues to repurchase stock. Since launching its share repurchase program in 2025 through May 1, 2026, Global Net Lease repurchased 19.7 million shares for $158.2 million at a weighted average price of $8.05. This included approximately 4.2 million shares repurchased in the first quarter for $38.4 million at an average price of $9.07.
Weil said the repurchase program remains one of several tools the company will evaluate, along with leverage reduction and acquisitions. He did not provide a forecast for future repurchase activity.
Weil also noted that board members Sue Perrotty and Governor Rendell intend to retire following the 2026 annual meeting of stockholders.
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