Skip to content
    GNL
    Earnings call· Jun 2026(Q2 FY26)

    Global Net Lease Q2 FY26 earnings call GNL

    Aug 6, 2026 Source

    Executive summary

    Global Net Lease Q2 FY26 — Modiv Acquisition and Office De-risking Drive Strong Performance

    Global Net Lease delivered a quarter of disciplined execution, highlighted by the anticipated Modiv acquisition which is expected to be 4% accretive to AFFO per share and enhance the portfolio's industrial exposure. The company continued its capital recycling strategy, monetizing non-core office assets at attractive cap rates while selectively acquiring high-quality industrial properties. Management remains focused on deleveraging, strategic acquisitions, and opportunistic share repurchases to drive long-term shareholder value.

    Highlights

    5

    • Modiv acquisition expected to be approximately 4% accretive to AFFO per share.

    • Closed and pending dispositions totaled $263 million through July 31, 2026, with $145 million closed at a weighted average cash cap rate of 7.6%.

    • Portfolio occupancy remained steady at 97%, with office occupancy increasing to 99%.

    • 63% of tenants carry an investment-grade or implied investment-grade rating, up from 60% in Q2 2025.

    • Achieved renewal spreads of approximately 5.6% above expiring rents on over 357,000 square feet.

    Concerns

    2

    • The pending Modiv transaction limited the company's ability to repurchase shares this quarter, with 1.2 million shares repurchased for $11.1 million compared to $169.7 million total since program inception.

    • Reported a net loss attributable to common stockholders of $7.5 million for the second quarter of 2026.

    Guidance & targets

    3
    CategoryTargetConfidence
    Full-year AFFO per share
    $0.82 to $0.85
    high materiality
    High
    Full-year Gross transaction volume
    $700 million to $800 million
    medium materiality
    High
    Net debt to adjusted EBITDA ratio
    6.5x to 6.9x
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Office
    Office occupancy increased due to the disposition of a vacant office property in Q1 2026, eliminating negative NOI drag. The office portfolio continues to perform well with full rent collection and a high concentration of investment-grade tenants.
    Occupancy: 99%Occupancy (Q2 FY25): 95%Rent collection: 100%Investment-grade tenants: Highest proportion within portfolioExposure (post-dispositions): ~21% of straight-line rent
    		————
    Industrial
    The Modiv acquisition is expected to significantly increase industrial exposure, aligning with the company's strategy to enhance portfolio quality and resilience.
    Exposure (post-Modiv acquisition): ~50% of total straight-line rent
    		————

    Operational metrics

    19
    AFFO
    $45.7 million
    Q2 FY26
    AFFO per share
    $0.22Up from $0.21 in Q1 FY26
    Q2 FY26
    Gross outstanding debt balance
    $2.5 billionDown $621 million from Q2 FY25
    Q2 FY26
    Multi-currency revolving credit facility outstanding
    $473 million
    Q2 FY26
    Weighted average interest rate
    4.1%Down from 4.3% in Q2 FY25
    Q2 FY26

    92% of debt is tied to fixed rates or swapped to fixed rates.

    Interest coverage ratio
    3.2x
    Q2 FY26
    Recurring capital expenditures
    $3.4 millionDown from $19.6 million in H1 FY25
    H1 FY26
    Liquidity
    $919 millionUp from $790 million in Q2 FY25
    Q2 FY26
    Revolving credit facility capacity
    $1.3 billionUp from $1.2 billion in Q2 FY25
    Q2 FY26
    Common stock outstanding
    211 million
    Q2 FY26

    Approximately 211 million shares outstanding on a weighted average basis for Q2 FY26.

    Shares repurchased (program inception)
    20.9 million
    Inception through July 31, 2026
    Shares repurchased
    1.2 million
    Q2 FY26
    Portfolio properties
    798
    Q2 FY26
    Portfolio rentable square feet
    40 million
    Q2 FY26
    Weighted average remaining lease term (WALT)
    5.7 years
    Q2 FY26
    Investment-grade tenants
    63%Up from 60% in Q2 FY25
    Q2 FY26

    The CEO mentioned 64% in Q&A, but prepared remarks stated 63% with more detail.

    Average annual contractual rental increase
    1.4%
    Annual

    Excludes 20.3% of the portfolio with CPI-linked leases.

    CEO GNL shares ownership
    2.9 million
    Post-separation

    Includes 2.2 million GNL shares received from Bellevue Capital Partnership.

    Publicly traded tenants/guarantors
    48%
    Q2 FY26

    Represents percentage of portfolio straight-line rent.

    Industry KPIs

    7
    MetricValueDetails
    Occupancy rate97%%
    Disposition volume$145 millionUSD
    Investment volume closed$14 millionUSD
    Net debt adjusted EBITDA6.6xx
    Leasing bookings volume signed357,000sq ft
    Ffo core ffo normalized ffo per share$0.22USD
    Lease renewal spread re leasing recapture5.6%%

    Orderbook & backlog

    2
    Disposition pipeline (closed and pending)$263 millionJuly 31, 2026

    Includes $145 million of closed dispositions.

    Identified dispositions closing$64 millionQ2 FY26

    Expected to close in 2027.

    Deals & partnerships

    5
    Modiv Inc.Proposed acquisition of Modiv's high-quality industrial portfolio.

    Modiv shareholder voting is underway, with a special meeting and shareholder vote on August 10, 2026.

    Undisclosed buyerSale of 133,000-square-foot KPN office property in the Netherlands.$18 million

    Property is under a signed purchase and sale agreement. GNL expects to collect full contractual rental income until closing. Non-refundable deposit received.

    Undisclosed buyerSale of 33,000-square-foot office property leased to the U.S. General Services Administration.$13 million

    Sale completed following a 20-year lease extension.

    Undisclosed buyerSale of 369,000-square-foot office property leased to GE Aviation.$48 million

    Sale completed following a 10-year lease extension.

    Federal ExpressAcquisition of an approximately 100,000-square-foot single-tenant industrial property in Mississippi.$14 millionLeased through 2031

    Discussions are underway with FedEx regarding a long-term lease extension.

    Risks & headwinds

    2
    Limited share repurchase activityQ2 FY26

    1.2 million shares repurchased for $11.1 million in Q2 FY26

    Mitigation: The pending Modiv transaction limited the ability to repurchase shares. Management views buybacks as a valuable tool and will continue to balance them with deleveraging and acquisitions.

    Ongoing office exposure reductionOngoing beyond CY26

    Targeting ~21% of straight-line rent post-dispositions

    Mitigation: Actively taking properties to market with qualified brokers, but avoiding 'fire-sale' conditions to maximize value. Focus on efficient and beneficial exits, including sales aligned with lease expirations.

    What to watch in Q3 FY26

    5

    Modiv acquisition closing and integration

    Next quarter
    CurrentShareholder voting underway, expected close mid-August 2026
    TargetSuccessful closing and initial integration progress

    Why it matters

    The Modiv acquisition is a key strategic move expected to be accretive to AFFO and significantly enhance the portfolio's industrial exposure.

    Modiv shareholder voting is currently underway, and we anticipate closing the Modiv transaction in mid-August 2026, shortly after their special meeting and shareholder vote on August 10, 2026.

    Q&A highlights

    5

    Will future office sales primarily align with lease expirations, or will the company continue to sell assets more immediately?

    The company will pursue both strategies: selling assets with longer-term lease structures to developers for redevelopment opportunities, maximizing rental income until closing, and also continuing to actively sell other office assets to reduce exposure efficiently, without waiting for perfect exit conditions.

    “It's going to continue to be both, Mitch. We see some great opportunities. A lot of the assets that we have on the longer-term sale structure, where we're going to receive 100% of the rent that is due to us, those assets are typically going to be acquired by developers for redevelopment opportunity.”

    asked by Mitch Germain · answered by Edward Weil

    2 min read6 chapters

    Detailed Narrative

    01

    Modiv Acquisition Progress and Strategic Rationale

    The proposed acquisition of Modiv is progressing, with shareholder voting underway and closing anticipated in mid-August 2026. This transaction is expected to extend GNL's portfolio weighted average remaining lease term to 6.6 years and increase industrial exposure to approximately 50% of total straight-line rent. Management projects the acquisition to be approximately 4% accretive to AFFO per share while remaining leverage-neutral, strengthening cash flow durability and balance sheet flexibility.

    02

    Accelerated Capital Recycling and Office De-risking

    GNL's disciplined capital recycling strategy gained momentum, with $263 million in closed and pending dispositions through July 31, 2026. This includes $145 million of closed dispositions at a weighted average cash cap rate of 7.6%, with 78% being office assets. Notable sales include a KPN office property for $18 million (closing Dec 2026), a GSA office for $13 million at a 7.2% cap rate, and a GE Aviation office for $48 million at a 7.2% cap rate. The company aims to reduce office exposure to approximately 21% of straight-line rent upon completion of planned dispositions.

    03

    Strategic Acquisitions and Value Creation

    Consistent with its capital recycling approach, GNL acquired a 100,000-square-foot industrial property leased to FedEx in Mississippi for $14 million at an 8.2% going-in cash cap rate. This acquisition demonstrates the attractive spread between disposition and acquisition cap rates, highlighting the value creation potential of the strategy. Management intends to continue selectively investing in high-quality single-tenant industrial and retail assets to further strengthen the portfolio.

    04

    Portfolio Strength and Leasing Performance

    At the end of Q2 2026, GNL's portfolio comprised 798 properties totaling 40 million rentable square feet, maintaining 97% occupancy and a 5.7-year weighted average remaining lease term. Office occupancy improved to 99% from 95% in Q2 2025. The portfolio benefits from a stable tenant base, with 63% carrying investment-grade ratings and an average annual contractual rental increase of 1.4% (excluding CPI-linked leases). Strong leasing results included renewal spreads of 5.6% above expiring rents on over 357,000 square feet.

    05

    Balance Sheet Management and Liquidity

    The company reduced its gross outstanding debt balance to $2.5 billion, a $621 million reduction from Q2 2025, with 92% tied to fixed rates. The weighted average interest rate decreased to 4.1% from 4.3% in Q2 2025, and the interest coverage ratio stood at 3.2 times. Net debt to adjusted EBITDA improved to 6.6x from 7.2x in Q1 2026. GNL reported strong liquidity of $919 million and $1.3 billion capacity on its revolving credit facility, further bolstered by a significant reduction in recurring capital expenditures.

    06

    Share Repurchase Program and CEO Ownership

    Since its inception through July 31, 2026, GNL has repurchased 20.9 million shares for $169.7 million at a weighted average price of $8.11. While the Modiv transaction temporarily limited activity, 1.2 million shares were repurchased in Q2 2026 for $11.1 million. CEO Michael Weil's ownership will increase to approximately 2.9 million shares following the receipt of 2.2 million GNL shares from Bellevue Capital Partnership, underscoring his confidence in the company's future.

    AI-generated summary of the company’s earnings call. Not investment advice.