Global Net Lease(US:GNL)2023-05-10 12:11Portfolio Overview - As of March 31, 2023, the company owned 317 properties with a total of 39.6 million rentable square feet, which were 98.0% leased[225]. - 61% of the company's properties were located in the U.S. and Canada, while 39% were in Europe[225]. - The portfolio consisted of 55% industrial/distribution properties, 40% office properties, and 5% retail properties[225]. - The average remaining lease term for the portfolio was 7.8 years as of March 31, 2023[225]. - The company focuses on acquiring and managing a globally diversified portfolio of commercial real estate properties, primarily through sale-leaseback transactions[224]. Financial Performance - Net loss attributable to common stockholders was $6.0 million for Q1 2023, compared to a net income of $5.5 million in Q1 2022[236]. - Revenue from tenants decreased to $94.3 million in Q1 2023 from $97.1 million in Q1 2022, primarily due to foreign exchange rate changes[237]. - On a constant currency basis, revenues for Q1 2023 would have increased by $3.2 million to $97.5 million[238]. - Property operating expenses rose to $8.1 million in Q1 2023 from $7.5 million in Q1 2022, mainly due to timing of reimbursable costs[239]. - General and administrative expenses increased to $5.7 million in Q1 2023 from $3.9 million in Q1 2022, largely due to higher legal costs related to a proxy contest[244]. - Equity-based compensation expense was $2.9 million in Q1 2023, up from $2.7 million in Q1 2022, due to additional amortization of restricted shares and RSUs[245]. - Funds from Operations (FFO) attributable to common stockholders for Q1 2023 was $31,040,000, a decrease of 31.9% from $45,602,000 in Q1 2022[306]. - Core FFO attributable to common stockholders for Q1 2023 was $31,139,000, down 31.8% from $45,610,000 in Q1 2022[306]. - Adjusted Funds from Operations (AFFO) attributable to common stockholders for Q1 2023 was $39,806,000, a decrease of 10.4% from $44,331,000 in Q1 2022[306]. Cash Flow and Debt Management - Net cash provided by operating activities was $63.0 million in Q1 2023, compared to $61.8 million in Q1 2022, driven by rental income and adjustments for non-cash items[255][256]. - Cash used in investing activities totaled $88.8 million in Q1 2023, primarily for property acquisitions of $81.4 million and capital expenditures of $7.4 million[257]. - Net cash provided by financing activities was $39.5 million in Q1 2023, resulting from net proceeds of $91.0 million from borrowings under the Revolving Credit Facility[258]. - Total debt outstanding remained stable at $2.5 billion as of March 31, 2023, with a weighted-average interest rate of 4.4%[270]. - As of March 31, 2023, 67.0% of total debt was fixed-rate or swapped to fixed-rate, with a weighted average interest rate of 3.9%[271]. - The debt leverage ratio was 58.3%, up from 56.6% as of December 31, 2022, primarily due to additional borrowings under the Revolving Credit Facility[272]. - Outstanding borrowings under the Revolving Credit Facility increased to $767.9 million as of March 31, 2023, from $670.0 million as of December 31, 2022[278]. Lease and Rental Information - The company executed seven lease renewals in Q1 2023, including a lease with Rheinmetall for approximately 0.7 million square feet, generating $6.8 million per year in net new rent[235]. - Approximately 94.9% of leases contain rent escalation provisions, averaging a cumulative increase of 1.2% per year, mitigating inflation impacts[316]. - The revenue from tenants includes base rent and reimbursements for property operating expenses, primarily insurance costs and real estate taxes[237]. - The total net new straight-line rent from the Rheinmetall lease over the new weighted-average remaining lease term is projected to be $39.6 million[235]. Foreign Currency Exposure - The company is exposed to foreign currency fluctuations and utilizes derivatives to manage this risk[313]. - Average exchange rates for GBP and EUR decreased by 9.4% and 4.4%, respectively, compared to the same period last year[238]. - The company's financial performance reflects the impact of foreign exchange rates on revenue from tenants[237]. Dividend Policy - The company paid dividends at an annual rate of $1.60 per share or $0.40 per share on a quarterly basis during the three months ended March 31, 2023[309]. - The company’s ability to pay dividends is subject to restrictions under its Credit Facility, limiting distributions to 100% of Adjusted FFO for any four consecutive fiscal quarters[311]. - Total dividends and distributions for the three months ended March 31, 2023, amounted to $46,857,000, fully covered by cash flows from operations[312].