What is the long-term plan for the non-industrial assets acquired from Modiv, and are there any restrictions on selling them?

There are no restrictions on selling assets. While the Modiv acquisition is primarily for its industrial portfolio, some non-industrial assets are considered opportunistic sale candidates. The company will continue to sharpen its portfolio to focus on predominantly industrial, net lease single-tenant assets, using proceeds from non-core sales to pay down debt or reinvest. “There are no restrictions in our ability to sell assets. The industrial portfolio that we're acquiring from Modiv is the majority of their asset pool, so we're very excited to bring that into GNL on a long-term basis. There are a few assets that we feel are opportunistic sale candidates that I don't want to get into too much detail on right now, but like we've done in the past, we are going to continue to sharpen this portfolio so that it is predominantly industrial assets, net lease single-tenant.”

What is the company seeing in the transaction market regarding pricing, size, and quality, and is it interested in smaller acquisitions or patient for larger deals like Modiv?

The company is selective in acquisitions, focusing on quality, guarantee structure, and geographic market rather than chasing price. They are active in bidding but only for properties that meet their criteria, often seeing many deals but moving forward on a small percentage. While Modiv was a large opportunity, one-off acquisitions are also important for building the portfolio, with a focus on high-quality earnings and long-term tenant relationships. “I've always believed that one-off acquisitions are an important aspect of building a great portfolio. They are in the market, you have to evaluate them. There are a number of deals that we see that any number of reasons we are not interested in it. We may not like the guarantee structure, we may not like the asking cap rate, we may not like the geographic market, or we may not like the industry.”

Does the company anticipate continued accretive asset recycling, and what are the preferences for capital allocation (acquisitions vs. deleveraging vs. share repurchases)?

The company expects to continue accretive asset recycling by achieving strong sale prices and negotiating favorable acquisition prices. Capital allocation priorities are: first, continued deleveraging; second, disciplined underwriting for acquisitions to grow earnings and extend WALT; and third, opportunistic share repurchases, which remain a valuable tool, though the company would prefer the stock to appreciate organically. “Obviously, we continue to believe that one of the most important things we can do is execute on the continued deleveraging of the company. So that will be top of mind as we move forward. We also want to be in a position to grow earnings and to grow earnings and extend WALT, we need that disciplined underwriting on the acquisition front.”

GNL

Global Net Lease (GNL) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Real Estate· Aug 6, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Full-year AFFO per share	$0.82 to $0.85 high materiality	FY26	High
Full-year Gross transaction volume	$700 million to $800 million medium materiality	FY26	High
Net debt to adjusted EBITDA ratio	6.5x to 6.9x high materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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	—	—	—	—

Orderbook & backlog

Disposition pipeline (closed and pending) $263 million July 31, 2026

Includes $145 million of closed dispositions.

Identified dispositions closing $64 million Q2 FY26

Expected to close in 2027.

Deals & partnerships

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

Sale completed following a 10-year lease extension.

Federal Express Acquisition of an approximately 100,000-square-foot single-tenant industrial property in Mississippi. $14 million Leased through 2031

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

Risks & headwinds

Limited share repurchase activity Q2 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 reduction Ongoing 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

Modiv acquisition closing and integration

Next quarter

Current Shareholder voting underway, expected close mid-August 2026

Target Successful 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.

Find out whether GNL delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.