Global Net Lease has announced a $1.8 billion deal to sell its portfolio of 100 non-core properties to a subsidiary of RCG Ventures Holdings. The portfolio, which is primarily made up of multi-tenant assets, will be sold at an 8.4% cash cap rate. The sale is a key part of GNL's ongoing strategy to focus on its core business of single-tenant net lease properties.
In addition to the portfolio sale, GNL is looking to reduce its debt. The company has set a goal of completing $3 billion in total property dispositions by the end of 2025. The REIT plans to use the proceeds from the sale to pay down its revolving credit facility. The company's board of directors has also authorized a $300 million share repurchase program.
The 100 properties being sold are considered non-core to GNL's overall portfolio. By divesting these assets, GNL hopes to streamline its operations and focus on its single-tenant net lease properties. The New York-based firm believes that this will help it to reduce its general and administrative expenses and capital expenditures. GNL is also aiming to improve its key portfolio metrics and increase its overall occupancy rate.
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In a statement, GNL CEO Michael Weil said that the sale of the non-core portfolio is a strategic move that will allow the company to better position itself for long-term success.
“We believe the proposed sale of our multi-tenant portfolio is a strategic and prudent transaction that will bolster our balance sheet and position GNL for continued success,” said Weil.
“The proposed transaction greatly decreases operational complexities, G&A expenses and capital expenditures associated with multi-tenant retail properties. The announcement marks a pivotal milestone in our strategic disposition initiative, offering a range of benefits with a clear emphasis on long-term value. The transaction reflects a disciplined and measured approach to accelerating debt reduction, driving a significant decrease in Net Debt to Adjusted EBITDA. We believe the resulting improvement in our capital structure strengthens our position to achieve an investment-grade credit rating, which may further reduce our cost of capital and enhance financial flexibility to support long-term growth.”
GNL is being advised by BofA Securities and BMO Capital Markets on the portfolio sale. The company is also receiving legal counsel from Paul, Weiss, Rifkind, Wharton & Garrison LLP.
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