Global Net Lease Lifts 2026 AFFO Outlook After Modiv Deal

Global Net Lease (NYSE: GNL) raised the low end of its 2026 adjusted funds from operations guidance after completing the Modiv Industrial acquisition and advancing a program of office property sales. The single-tenant net lease REIT now expects full-year AFFO of $0.83 to $0.85 per share, compared with its previous range of $0.82 to $0.85.

The company attributed the revision to greater visibility after three quarters, the closing of the Modiv transaction, share repurchases, office dispositions and operational performance across the portfolio. GNL maintained its forecast for net debt to adjusted EBITDA of 6.5 times to 6.9 times and revised expected gross transaction volume to $750 million to $800 million from $700 million to $800 million. The transaction forecast includes both acquisitions and dispositions.

For the third quarter ended September 30, GNL reported $112.9 million of revenue from tenants and a GAAP net loss attributable to common stockholders of $67.1 million, or $0.31 per share. The loss included $58.2 million of impairment charges. AFFO, a non-GAAP measure, was $48.3 million, or $0.22 per diluted share, while net operating income was $98.5 million and cash NOI was $98.6 million.

Modiv acquisition shifts portfolio toward industrial assets

GNL completed its $535 million acquisition of Modiv Industrial on August 12 at an approximate 7.6% cash capitalization rate. The transaction added 40 industrial properties with a 15-year weighted average remaining lease term and average annual rent increases of 2.4%.

The acquisition increased industrial and distribution properties to 51% of GNL’s annualized straight-line rent, up from the portfolio mix before the transaction, and extended the companywide weighted average lease term to 6.3 years from 5.7 years at the end of the second quarter. GNL said 45% of the acquired portfolio’s annual base rent was associated with tenants classified as investment grade, including both actual and implied ratings.

The all-stock transaction was structured to be leverage neutral and is expected by the company to be approximately 4% accretive to AFFO per share. A full quarter of earnings from the acquired properties will be reflected beginning in the fourth quarter. GNL also expects about $6 million in annual cost synergies from eliminating overlapping public-company, personnel and third-party expenses.

Because the acquisition closed in mid-August, GNL said its third-quarter net debt-to-adjusted EBITDA ratio was not meaningful: quarter-end debt included the full transaction, while adjusted EBITDA included only a partial quarter of earnings from Modiv. Management expects the fourth quarter to include a full quarter of contribution and continues to characterize the deal as leverage neutral.

Office sales remain central to capital recycling

Office properties represented 23% of portfolio straight-line rent at the end of the quarter, down from 27% at the beginning of 2026. Including dispositions under purchase and sale agreements or letters of intent as of October 30, the company estimated pro forma office exposure at approximately 18%.

GNL had completed $167 million of dispositions during 2026 and reported a total of approximately $391 million in completed sales and its disposition pipeline. About 68% of that total consisted of office assets. The pipeline included roughly $58 million under signed purchase and sale agreements and $166 million under letters of intent.

Occupied properties sold during the year had a 7.7% cash capitalization rate. The program also includes vacant assets that GNL expects will eliminate more than $2 million of NOI drag. Approximately $141 million of office properties are intended to be sold at lease expiration, allowing the company to collect the remaining contractual rent while seeking to avoid re-leasing costs, capital expenditures and vacancy exposure.

Management plans to continue marketing office properties and to redeploy proceeds into single-tenant industrial and retail assets. The company said it will seek to balance sale timing and pricing, including pursuing lease extensions before a sale where doing so could support value.

Liquidity and portfolio operations

GNL ended the quarter with $2.85 billion of total debt and $2.70 billion of net debt, down $164 million from the third quarter of 2025. Its weighted average interest rate was 4.1%, compared with 4.2% a year earlier, and 86% of debt was fixed-rate or swapped to fixed.

The company reported $863 million of liquidity, comprising $150.7 million of cash and cash equivalents and $712.6 million of availability under its revolving credit facility. GNL has no scheduled debt maturities before November 2027. Its nearest maturities are $94 million of mortgages in November 2027 and $500 million of senior notes in December 2027.

The portfolio comprised 835 properties totaling 43.5 million square feet and was 96% occupied. Industrial and distribution assets generated 51% of annualized straight-line rent, retail contributed 26%, and office accounted for 23%. About 63% of portfolio rent came from tenants classified as actual or implied investment grade, while 87% of leases contained contractual rent increases.

During the quarter, GNL completed 10 lease renewals covering about 840,000 square feet and $10.4 million of straight-line rent. The renewals had a weighted average term of 5.2 years and produced a 4.9% straight-line rent renewal spread.

GNL said reducing leverage remains a long-term priority and plans to direct disposition proceeds toward debt repayment while maintaining its investment-grade balance sheet. The company also intends to retain flexibility in its capital allocation decisions, which have included repurchasing 29.7 million shares for $246 million between January 2025 and October 30, 2026.

The outlook depends in part on completing planned property sales and realizing projected benefits from the Modiv acquisition. GNL cautioned that transactions under agreements or letters of intent may not close on the stated terms or at all, and that acquisitions, dispositions and financing activity remain subject to market conditions, capital availability and timing. Its guidance and acquisition projections also rely on assumptions that could cause actual results to differ materially.