Global Net Lease(US:GNL)2020-11-05 20:30Financial Data and Key Metrics Changes - For Q3 2020, adjusted EBITDA was $63.6 million, up from $58.3 million in Q3 2019 [20] - Revenue increased by 6.1% to $82.7 million from $77.9 million, with a net loss attributable to common stockholders of $0.5 million [20] - AFFO per share rose 4.5% to $0.46 from $0.44 in the previous quarter [14] Business Line Data and Key Metrics Changes - The portfolio is nearly fully occupied at 99.6% leased, with a weighted average remaining lease term of 8.7 years, up from 8 years a year ago [15] - The property mix is currently 48% office, 47% industrial and distribution, and 5% retail, compared to 52% office, 43% industrial and distribution, and 5% retail a year ago [16] - Over 65% of straight-line rent comes from investment grade or implied investment grade tenants [17] Market Data and Key Metrics Changes - Rent collection was strong, with over 97% of original cash rent collected, including 99% from top 20 tenants [8][10] - In the U.S., 96% of cash rent was collected, while 99% was collected from UK-based assets and other European tenants [10] Company Strategy and Development Direction - The company is focused on industrial and distribution assets, with a robust acquisition pipeline totaling over $325 million [12][27] - The strategy includes opportunistic selling of retail holdings, with a focus on long-term core holdings [56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience during the pandemic, with a strong emphasis on credit quality and asset selection [9][26] - The company is positioned for long-term growth, with no near-term debt maturities and ample liquidity to pursue accretive opportunities [27] Other Important Information - The company distributed $35.8 million in common dividends to shareholders in the quarter, or $0.40 per share [20] - The net debt to enterprise value ratio was 51.8%, with net debt of $1.8 billion at a weighted average interest rate of 3.1% [21][23] Q&A Session Summary Question: Impact of COVID-19 on European assets - Management noted that there have not been significant changes in the portfolio despite the uptick in COVID-19 cases in Europe [31] Question: Johnson Controls acquisition sourcing and future deals - The acquisition was sourced through normal channels, and management is seeing more deals in Europe and a robust pipeline in the U.S. [32] Question: Common denominator for tenants with rent deferral issues - Management indicated that there has not been a specific area of concern among tenants regarding rent deferrals [34] Question: General and Administrative expenses - G&A expenses were higher in Q3 due to legal costs related to COVID-19, but are expected to normalize [35] Question: Dividend payout ratio and future plans - Management is comfortable with the current dividend payout ratio and has no plans to raise the dividend at this time [37] Question: Cap rates for acquisition opportunities - Management indicated that cap rates for acquisitions are generally in the range of 6.5% to 7.5% [42] Question: European lockdowns and investment opportunities - Management believes that while the process may slow down, it will not significantly impact deal volumes [44] Question: Changes in underwriting for office acquisitions - Management has maintained a focus on mission-critical office properties and will continue to apply stringent criteria for future acquisitions [52]