Global Net Lease (GNL) Q3 2026 Earnings Call: AFFO Guidance Raised

Key Takeaways

• Global Net Lease reported Q3 2026 revenue of $112.9 million, AFFO of $48.3 million and AFFO per share of $0.22. Net loss attributable to common stockholders was $67.1 million.
• GNL raised the low end of its 2026 AFFO per share guidance to $0.83 from $0.82. The revised range is $0.83 to $0.85.
• The company completed and integrated the Modiv Industrial acquisition. Management said the portfolio is contributing positively and the expected G&A synergies were achieved without increasing third-quarter G&A expense.
• Through October 30, closed and pending dispositions totaled $391 million. Office assets represented approximately 68% of the volume, and management expects office exposure to decline to about 18% of straight-line rent after pending transactions close.
• GNL repurchased 29.7 million shares for $245.8 million from the program’s inception through October 30, at a weighted average price of $8.28 and an estimated AFFO yield of approximately 10% based on the midpoint of 2026 guidance.
• Gross debt declined by $178 million year over year to $2.9 billion. GNL had approximately $863 million of liquidity, while 86% of debt was fixed-rate or swapped to fixed-rate and no debt matures before Q4 2027.

Core Financial Data

Business and Operating Performance

GNL owned 835 properties totaling 44 million rentable square feet at the end of Q3 2026. Investment-grade or implied investment-grade tenants represented 63% of the portfolio, up from 60% a year earlier. No tenant accounted for more than 5% of straight-line rent.

The portfolio’s average contractual rent increase was 1.5%, excluding CPI-linked leases representing 17.9% of the portfolio. Using historical CPI data, management estimated total annual rent growth at closer to 2%. More than 70% of CPI-linked leases have uncapped escalators.

Renewal spreads averaged approximately 4.9% above expiring rents across more than 840,000 square feet. The weighted average term on these renewals was 5.2 years. GNL also secured a 10-year extension with Refresco and renewed four Dollar General locations at an approximately 8% spread.

The Modiv acquisition closed on August 12. GNL fully integrated the acquired 40-property portfolio and identified three to five noncore assets that could generate approximately $75 million to $100 million of gross proceeds. Management expects potential sales between the current period and mid-2027.

Through October 30, completed and pending dispositions totaled $391 million, including $167 million of completed sales at a 7.7% cash cap rate on occupied assets. GNL also had 15 gas, convenience-store and car-wash properties under contract for approximately $70 million at a 6.5% cash cap rate, with closing expected by year-end. Management said the remaining exposure to these categories would be about 2% of straight-line rent.

Management Guidance

Management said the Modiv transaction remains consistent with its expectation of leverage neutrality and approximately 4% AFFO per share accretion. Q4 results will include a full quarter of Modiv earnings, which management said should provide a more representative leverage measure.

Capital allocation will continue to balance debt reduction, share repurchases and selective acquisitions. Management said any acquisition must be accretive to AFFO per share, improve portfolio quality and remain consistent with GNL’s leverage objectives.

Risks and Areas to Watch

Higher long-term interest rates have pressured commercial real estate valuations and funding costs. Management also said acquisition cap rates have not adjusted sufficiently to the current debt-financing environment, limiting attractive investment spreads.

Office exposure remains a central portfolio risk. GNL reduced office assets to 23% of straight-line rent and expects the pending disposition pipeline to lower that figure to approximately 18%, although some transactions will extend into 2027. Management confirmed that higher impairment charges during the quarter were primarily associated with office properties expected to become vacant and be sold.

Reported leverage temporarily increased because quarter-end debt included the full Modiv transaction, while adjusted EBITDA reflected only a partial quarter of acquired earnings. Reducing leverage remains a long-term priority.

GNL has no debt maturities until Q4 2027. Management said it is preparing for refinancing opportunities but could temporarily place maturing debt on the revolving credit facility if capital-market terms are unattractive.

Analyst Q&A Highlights

• Office dispositions: Management attributed the faster pace of sales to tenant engagement, renewals and lease extensions completed over the previous three to four quarters. Vacant asset sales have reduced negative NOI drag by approximately $2 million.
• Capital allocation: GNL continues to compare share repurchases with debt repayment and acquisitions. Management emphasized that the approximately 10% AFFO yield on repurchased shares remains attractive but did not specify the future allocation mix.
• Buyback capacity: Approximately $55 million remained under the $300 million board-authorized repurchase program. Management said it would evaluate additional authorization or covenant discussions if necessary.
• Dividend: Management said the portfolio generates sufficient free cash flow to fund the dividend and expressed confidence in maintaining the current level, while noting that formal dividend decisions remain with the board.
• Portfolio strategy: GNL plans to continue reducing office exposure while building a portfolio focused primarily on industrial and single-tenant retail properties. Management intends to avoid development and repositioning projects in favor of established, income-producing assets.
• 2027 outlook: Management did not provide detailed 2027 guidance but said it was not expecting to forecast significant headwinds from the current disposition strategy.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good morning, and welcome to the Global Net Lease Third Quarter 2026 Earnings Call. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Jordyn Schoenfeld. Please go ahead.

Jordyn Schoenfeld

Thank you. Good morning, everyone, and thank you for joining us for GNL's third quarter 2026 earnings call. Joining me today on the call is Michael Weil, GNL's Chief Executive Officer, and Chris Masterson, GNL's Chief Financial Officer. The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please review the forward-looking and cautionary statements section at the end of our third quarter 2026 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today.

As stated in our SEC filings, GNL disclaims any intent or obligation to update or revise these forward-looking statements except as required by law. Also, during today's call, we will discuss certain non-GAAP financial measures which we believe can be useful in evaluating the company's financial performance. Descriptions of those non-GAAP financial measures that we use, such as AFFO and Adjusted EBITDA, and reconciliations of these measures to our results as reported in accordance with GAAP are detailed in our earnings release and supplemental materials.

I'll now turn the call over to our Chief Executive Officer, Michael Weil. Mike?

Edward Weil

Thanks, Jordyn. Good morning, and thank you all for joining us today. Our focus remains on the performance of our portfolio and executing on our stated priorities. We're pleased with the progress we've made through the first 3 quarters of 2026. This quarter alone, we've closed and fully integrated the Modiv Industrial acquisition, made further progress reducing our office exposure and directed capital toward attractive share repurchase opportunities at an approximate 10% AFFO yield. Reflecting this continued execution, we're raising the low end of our full year AFFO per share guidance range. That execution took place against a more challenging macroeconomic backdrop.

Uncertainty around the economic outlook, inflation and monetary policy, together with a sharp rise in the 10-year Treasury yield has placed pressure on valuations and the cost of capital for commercial real estate. In this environment, we remain focused on what we can control, strengthening our portfolio, maintaining financial flexibility and allocating capital with discipline. We believe our investment-grade balance sheet, strong liquidity and significant exposure to investment-grade tenants positions us well to advance our strategy without the need to raise additional debt or common equity, while our portfolio organically generates sufficient free cash flow to fund our dividend. We continue to work diligently on renewals and lease extensions while pursuing opportunistic dispositions within our office segment.

The Modiv acquisition, completed on August 12, marked a very significant step in our portfolio repositioning following an extensive disposition initiative that transformed our business. We've fully integrated the acquired properties into our operating platform, and the portfolio is performing well and contributing positively to our results. We've also achieved the anticipated G&A synergies, absorbing the acquired portfolio without increasing G&A expense in the third quarter through the elimination of duplicative public company personnel and third-party costs. We've identified 3 to 5 noncore assets within the acquired 40-property Modiv portfolio for potential disposition and are evaluating potential opportunities to monetize these assets at attractive valuations. We estimate these potential sales could generate approximately $75 million to $100 million in gross proceeds, supporting our broader capital allocation priorities, including reinvestment in high-quality industrial and retail properties and debt reduction.

Across the broader portfolio, we further advanced our capital recycling strategy through targeted dispositions with a continued focus on reducing office exposure. Through October 30, 2026, our closed and disposition pipeline totaled $391 million, including $167 million of completed sales at a cash cap rate of 7.7% on occupied assets. Office properties continue to represent the majority of our sale activity, accounting for approximately 68% of total closed and pending disposition volume. Upon completion of these pending transactions, we expect total office exposure to decline to approximately 18% of straight-line rent. Our approach to reducing office exposure remains disciplined with pricing and opportunities to maximize value driving the pace of these sales. We tailor our strategy to each asset, including extending lease terms ahead of a sale where feasible to enhance value and selectively selling the few vacant buildings in our portfolio to eliminate carrying costs and negative NOI drag. When possible, we also structure sales to close upon lease expiration, capturing remaining contractual rent while avoiding re-leasing costs, additional capital expenditures and vacancy risk.

Given current share price levels and the limited number of compelling acquisition opportunities we're seeing, issuing common equity is not attractive at this time. Our liquidity and ability to generate disposition proceeds means we don't need to rely on equity issuances anywhere near current price levels. Instead, we can selectively monetize assets and redeploy the net proceeds in an accretive manner. One example is the strong private buyer demand for gas and convenience and car wash assets, supported by the tax benefits of bonus depreciation, which helps sustain attractive sale pricing. We currently have 15 properties in these categories under contract for approximately $70 million at a cash cap rate of 6.5%. Our broader exposure in these categories represents approximately 3% of portfolio straight-line rent. While these assets continue to perform well, they also provide a meaningful potential source of attractively priced capital beyond the transactions currently under contract.

Selective sales would allow us to reinvest in high-quality industrial and retail properties while continuing to improve and reposition our portfolio. We'll continue to make smart strategic decisions that create long-term value for our shareholders. On the acquisition front, we remain disciplined in evaluating opportunities to reinvest in high-quality single-tenant industrial and retail properties. Accretion to AFFO per share is a prerequisite for any acquisition we pursue alongside enhancing portfolio quality and remaining consistent with our leverage objectives. We prioritize creditworthy tenants, embedded contractual rent growth and long-term leases that enhance the durability of our cash flows. Our focus is on established income-producing assets, avoiding the additional uncertainty associated with repositioning properties or undertaking long-term development projects. Higher funding costs have compressed investment spreads, and we have not yet seen acquisition cap rates adjust to levels we believe adequately reflect the current debt financing environment.

During the quarter, we evaluated several acquisition opportunities but chose to pass where the spread between the going-in yield and the cost of debt was insufficient to justify the investment. We believe continued progress on dispositions will generate additional capital to pursue acquisitions that meet our criteria as real estate pricing adjusts with each opportunity evaluated against share repurchases and debt reduction. Since the inception of our share repurchase program through October 30, 2026, we've repurchased 29.7 million shares for approximately $245.8 million at a weighted average price of $8.28 -- representing an attractive AFFO yield of approximately 10% based on the midpoint of our full year guidance. This includes 6.6 million shares for approximately $58.5 million in the third quarter of 2026. We'll continue to evaluate repurchases opportunistically while balancing our priorities of reducing leverage and selectively reinvesting in high-quality industrial and retail assets.

The recent rise in long-term rates has also underscored the value of the financing decisions we made last year. Our investment-grade credit profile enabled us to refinance our revolving credit facility in August of 2025 on improved terms, extending its maturity to August 2030, including extension options and reducing the spread by 35 basis points to its current level of 1.25% -- despite the rise in long-term Treasury yields, our existing borrowing costs have remained essentially unchanged. SOFR, the benchmark underlying our U.S. dollar revolver borrowings, has increased by only 25 basis points and 86% of our debt is fixed or swapped to fixed rates, substantially limiting the impact on our financing costs. We also have no debt maturities until the fourth quarter of 2027, providing additional flexibility as we execute our capital allocation strategy. Reducing leverage remains a core long-term capital allocation priority, and we intend to continue to redirect disposition net proceeds toward debt repayment.

Maintaining our investment-grade balance sheet and financial flexibility remains central to how we balance acquisitions, share repurchases and debt reduction. Turning to our portfolio. At the end of the third quarter of 2026, we owned 835 properties totaling 44 million rentable square feet. Our portfolio occupancy is 96%, while weighted average remaining lease term increased to 6.3 years, up from 6.2 years in the third quarter of 2025 and 5.7 years in the second quarter of 2026. GNL's portfolio features a stable tenant base and high quality of earnings with an industry-leading 63% of tenants carrying an investment-grade or implied investment-grade rating, up from 60% in the third quarter of 2025. Our average annual contractual rental increase is 1.5%, excluding the impact of 17.9% of the portfolio with CPI-linked leases. When we factor in those leases using historical CPI data, the portfolio's annual rental increase is closer to 2%. More than 70% of our CPI-linked leases have uncapped escalations, providing additional rental growth potential in periods of higher inflation.

On the leasing front, we once again delivered strong results across the portfolio, reflecting the quality of our asset management capabilities and tenant relationships. We achieved renewal spreads of approximately 4.9% above expiring rents on more than 840,000 square feet with a weighted average lease term of 5.2 years. Leasing highlights this quarter included a 10-year extension with Refresco at our 170,000 square foot distribution facility in Missouri, converting the tenant's 5-year renewal options into 10 years of committed term with 1.5% annual rent increases and securing approximately $5 million of incremental rent. We also renewed 4 Dollar General locations totaling approximately 37,000 square feet at a renewal spread of approximately 8%. These results reflect our disciplined proactive approach to asset management. By engaging with tenants well in advance of lease expirations, we continue to drive strong retention, preserve high occupancy levels and capture rental growth, all while maintaining our long-term focus on portfolio stability and cash flow durability.

Our continued efforts to limit exposure to high-risk geographies, asset types, tenants and industries reflect our intentional diversification strategy and disciplined credit underwriting. No single tenant accounts for more than 5% of total straight-line rent and our top 10 tenants collectively contribute only 26% of total straight-line rent, with 81% being investment grade. 55% of our portfolio's straight-line rent is derived from publicly traded tenants or is backed by a publicly traded guarantor, providing greater transparency into the financial profile of a substantial portion of our portfolio. We carefully monitor all tenants in our portfolio and their business operations on a regular basis. I encourage everyone to review the details of each segment of our portfolio in our third quarter 2026 investor presentation on our website. I'll now turn the call over to Chris to walk through the financial results and balance sheet matters in more detail. Chris?

Christopher Masterson

Thanks, Mike. Please note that, as always, a reconciliation of GAAP net income to non-GAAP measures can be found in our earnings release, which is posted on our website. For the third quarter of 2026, we recorded revenue of $112.9 million and a net loss attributable to common stockholders of $67.1 million. AFFO was $48.3 million or $0.22 per share. Looking at our balance sheet, the gross outstanding debt balance was $2.9 billion at the end of the third quarter of 2026, a reduction of $178 million from the end of the third quarter of 2025, while net debt was $2.7 billion. Our debt is comprised of $1 billion in senior notes, $830 million on the multicurrency revolving credit facility and $1 billion of outstanding gross mortgage debt. As of the end of the third quarter of 2026, 86% of our debt is tied to fixed rates or debt that is swapped to fixed rates.

Our weighted average interest rate stood at 4.1%, down from 4.2% in the third quarter of 2025. Because the Modiv acquisition closed in mid-August, quarter end debt reflects the full transaction, while adjusted EBITDA includes only a partial quarter of earnings from the acquired portfolio, resulting in a temporary increase in reported leverage. Our fourth quarter 2026 results will include a full quarter of Modiv earnings, providing a more representative measure of leverage. Our 2026 net debt to adjusted EBITDA guidance range remains unchanged, consistent with our expectation that the transaction will be leverage neutral. We also continue to realize the benefits of our streamlined operating platform with recurring capital expenditures declining significantly to $5.7 million through 3 quarters of 2026 from $26.2 million in the same period in 2025. This meaningful reduction in capital requirements further strengthens our cash flow profile and financial flexibility.

As of September 30, 2026, we had liquidity of approximately $863 million and $1 billion of capacity on our revolving credit facility. We had approximately 225 million shares of common stock outstanding and approximately 221 million shares outstanding on a weighted average basis for the third quarter of 2026. Since launching our share repurchase program in 2025 and through October 30, 2026, we have repurchased 29.7 million shares for a total of $245.8 million. This includes approximately 6.6 million shares repurchased in the third quarter of 2026 for $58.5 million. Since inception, total repurchases under this program have been executed at a weighted average price of $8.28, representing an AFFO yield of approximately 10% based on the midpoint of our full year guidance. We believe this program has been a highly accretive use of capital and has generated tangible value for our shareholders.

Turning to our outlook for 2026. We are raising the low end of our full year AFFO per share guidance from $0.82 to $0.83, resulting in a revised range of $0.83 to $0.85 and increasing the low end of our gross transaction volume guidance from $700 million to $750 million, resulting in a revised range of $750 million to $800 million. We also reaffirm our net debt to adjusted EBITDA guidance range of 6.5x to 6.9x. I'll now turn the call back to Mike for some closing remarks.

Edward Weil

Thanks, Chris. I'll close with some thoughts on the rate environment ahead. We don't control the direction of interest rates, and we will not build our strategy around predicting them. What we can control is how GNL allocates capital effectively across different rate environments. Our liquidity and investment-grade balance sheet gives us the flexibility to remain patient, pursue attractive opportunities and maintain discipline. Together with our ability to generate capital through dispositions, this allows us to execute our strategy without the need to issue common equity in this market.

The third quarter demonstrated that flexibility. When repurchasing our shares offered a better return than the acquisition market, we bought them, repurchasing 6.6 million shares at an AFFO yield of approximately 10%, when office assets could be sold at attractive pricing, we sold them, completing $123 million of office dispositions through September 30, 2026, at a 7.5% cash cap rate on occupied assets and bringing office exposure to 23% of straight-line rent. When acquisition pricing didn't meet our return requirements, we remained patient, preserving capital for more attractive opportunities. And in the middle of all that, we closed and integrated the Modiv acquisition and raised the low end of our full year AFFO per share guidance range.

The work we've done over the past 3 years has given us the flexibility to make these decisions while maintaining financial discipline. Looking ahead, we expect to maintain that approach, a steady reduction in office exposure, selective reinvestment in industrial and retail properties when the returns justify it and a continued focus on bringing leverage down over time. Stepping back, I think it's worth stating plainly what GNL offers today. We have an investment-grade balance sheet, a dividend yield exceeding what the 10-year Treasury can offer, no debt maturities until the fourth quarter of 2027 and a diversified portfolio of more than 800 properties with what we believe is the highest proportion of investment-grade tenants among our net lease peers.

We believe these attributes, together with our disciplined approach to capital allocation, continue to make GNL a compelling investment. We're available to answer any questions you may have after the call. Operator, please open the line for questions.

Operator

We will now be conducting a question-and-answer session. Today we will have Ori Kravel joining us during the questions. [Operator Instructions] And our first question today, we will hear from Mitch Germain with Citizens Bank. Please proceed with your question.

Question-and-Answer Session

Mitch Germain

Michael, it seems like I'd love to get some color and clarity on your decision to sever ties with Bellevue. I feel like that transaction and the resulting share ownership was somewhat overlooked by the investment community. Can you maybe just kind of walk through some of the decision-making around that and what you think it means going forward?

Edward Weil

Yes. Well, thanks, Mitch. And I'm assuming that you mean my personal decision, not the internalization decision of a couple of years ago?

Mitch Germain

No, no, yes. The decision that was announced, I believe it was in early July, if I'm not mistaken.

Edward Weil

So I am very proud of Global Net Lease and the team and the work that we're doing. And I was finding that I needed more and more or all of my time to focus on what we were looking to achieve with Global Net Lease. So that was the driver for me personally. I just wanted to be a -- like everyone else here, a fully dedicated member of the GNL team. I think this company is positioned for great growth and success for our shareholders. And I just wanted to make sure that not only that I had enough time to accomplish that, but that it was clear to the market where I sat. I will be a top 10 shareholder, I believe, or very close to a top 10 shareholder.

So it's an important asset for me and my family. But that's not what led me to the decision. The decision was really just so that I could be without any distraction and that I could be here 100% of the time. The Board has been amazing, very focused on the steps that we're taking. And I just wanted to make sure that everything was as it should be.

Mitch Germain

Great. I wanted to just ask about some of the asset sales. It seems like the -- so the occupied sales are on that portfolio of C-stores. Is that the way to think about it? And then the vacant is going to be some of your office exposure. Is that how I should consider the pipeline here?

Edward Weil

There have been some occupied office as well under contract or executed. But yes, the $70 million of gas and convenience and car wash was something that we just saw as an opportunity that presented itself and our asset management team was able to execute really quickly to get in that mix because the bonus depreciation is a year-end phenomenon. So we wanted to get marketing, get executed. We found buyers, and it's been a really great source of capital that just presented itself.

Mitch Germain

Is there any other opportunities such as that, that you think could be executed on in a fairly abrupt stub period here in the next 2 months?

Edward Weil

We'll continue -- there's more to be done in the gas and convenience and car wash sector. It's 3% of our overall straight-line rent. So these are good assets. But when we can sell in the mid-6% cap range in this market, I think it's long-term advantageous for us to do that. We've also -- not just kind of the momentary point in time type of transactions, we've actually been doing a lot of work. Again, I really appreciate the asset management team, both in the U.S. and abroad, our U.K. team and the work that they're doing. We've been very engaged with tenants on renewals, extensions, and also on potential disposition of some important office assets in the portfolio that I think will really be central to what we're talking about through the end of this year and the first half of next year.

Mitch Germain

Great. Last one for me. I know you've got that big tranche of debt due end of next year. So you've got about a year to worry about that. How does -- how do you foresee that process playing out? Are you just going to kind of remain patient here? Or if you think that there is an attractive window that opens or are you going to potentially get aggressive and look to refi that early? How restrictive is that capital? And how do you consider this situation playing out?

Edward Weil

So I think that it's very important for us to always be prepared to act quickly. So Chris, who's on the call with us, of course, Chris and his team are in a good position to do that. We've had great conversations with a number of our banking relationships about potential. We've even had meetings with bondholders of our existing issuances that are maturing just so that they were familiar with what we've been doing, our focus on the investment grade, the deleveraging, et cetera. So if that window does open, it's important that we're ready to step through it, and I can guarantee you that we will be. But fortunately, and again, Chris and Ori really a year ago or 1.5 years ago when they did the work on recasting our credit facility, we made sure that we had more than enough capacity so that if we're not satisfied with where the market is at that point in time, we would have the ability to simply warehouse that debt and wait for the window to open or to get more attractive.

So it's obviously front of mind for us, but it's not something that I feel we have to worry about because we have a very good plan B, which would be to just warehouse on the credit facility, which right now is about -- our average cost of debt is about 4.1%. Credit facility is a little higher than that. But again, very attractive for where we would need to be.

Operator

And next we move to Upal Rana with KeyBanc Capital Markets.

Upal Rana

Just wanted to touch on the office dispositions. It seems like it's accelerating post the Modiv integration. And I know you've talked about this in the past and want to be measured on the office sales. But is the incremental office dispositions a result of either higher buyer demand, lease roll timing or maybe you guys just trying to shore up even more capital?

Edward Weil

It's really been a factor of work that we've done in the previous 3 to 4 quarters with tenant engagement, renewals, extensions, et cetera. So that -- as I've said before, we will reduce our exposure to office, but we do have good assets. So we want to find value for those assets. And we've taken the steps to do that. It was a very good quarter for closed and pipeline of office dispositions. The fact that we are looking at a pipeline that gets us to 18%, I'm pleased with. It's not where we want to end up, but it was a big step down from, I think, 27% last quarter. So we've told the market that we're going to do this. I think that there's nothing more valuable than management executing on what they say.

So this is a clear path. We'll continue to update it. And the thing that is most valuable is we're really coming in at a nice range on a cap rate for dispositions, about 7.6% on a cap rate basis. We've also sold some vacant. And the important thing to remember on the vacant sales, we've reduced NOI drag by about $2 million in disposing of these. So strategic plan with efficient execution is really what I'd like to talk about every quarter going forward.

Upal Rana

Okay. Great. That was helpful. And then maybe on the Modiv portfolio, I know you wanted to sell a handful of assets there. Maybe you can give us an update on where that stands today and maybe if anything on pricing has changed over the past few months since the increase in interest rates?

Edward Weil

So as I said in my prepared comments, there are roughly 3 to 4 assets that we're looking to dispose of. We think that the total proceeds will be in the $75 million to $100 million range. Again, these are good assets. And we believe that we will find a buyer who values the long-duration lease, the credit of the tenant. And in these 3 or 4 situations, it's just not an asset that we think, although it's a great asset, it's just not a core long-term asset. So it's just another tool that we can execute on. And we believe that we will have updates in the upcoming couple of quarters.

Upal Rana

Okay. Great. And then if I can squeeze one more in. I wanted to give you an opportunity to address the stock price here. It's come down a bit over the last few months. You did complete some buybacks during the quarter, and I'm assuming you'll likely do a little more here with the stock trading at $7 I know you've talked about this topic quite a bit over the last few quarters, but maybe you can give us your updated thoughts on the balance between buybacks and leverage.

Edward Weil

Okay. So that's a question that I appreciate -- not that I wouldn't appreciate it otherwise, but because I really didn't want to comment on stock price because that's really kind of out of our control. I think that we've positioned the portfolio when the market does turn around, and it always does. And I think we'll see kind of a change from kind of these more tech-focused trades back into what I think of as core earnings, which real estate definitely fits in and is a valuable allocation. As far as how we think about stock buyback and leverage, it's something that we have to look at very closely. Ori, Chris and I spend a lot of time on our model and looking at impact of buyback versus leverage. But we also take into account the ability to dispose of noncore assets to fund that.

So again, I think it's working well. There's not a lot out there for anybody that can generate a 10% AFFO yield. So having the capital on hand, having the buyback in place, I'll never be able to tell you when we will or when we won't buy back. But as you know, we have a Board-authorized buyback. We've been prudent in how we've used it, and we still have capacity under that program, and we'll use it to the advantage of GNL and our shareholders. I do want to point out something that I think is interesting. We bought back about 29 million shares, and that's about the same share count that we issued to the Modiv shareholders.

So it's been important and interesting to see the total shares outstanding really stay where it started. And again, it's a tool. We can buy accretive acquisitions. We can buy back our stock. We continue to delever. We can sell assets. So we've got to stay very nimble and focused. And ultimately, we're very clear on return to shareholders is the priority.

Operator

And John Kim with BMO Capital Markets will have our next question.

John Kim

Michael. On all the sources and uses over the next 12 months, selling assets, different types of assets, share repurchases, acquisitions and debt reduction on the uses side. How realistic or how important is it for you that this will all be done in an earnings neutral or accretive manner?

Edward Weil

Well, it's very important. And I think that we've been able to show over the last couple of years, we've reduced our outstanding debt by about $2.5 billion. We've sold assets. We've acquired assets. We've executed on our stock buyback. We were able to raise our AFFO per share guidance to $0.85 on the high end. And we'll continue to focus on that. There are certain things that we have to look at how we can balance and maybe the right time to do something. But what we've laid out is a very clear road map for how we'll continue to operate the business and protecting or growing AFFO per share continues to be a main priority.

John Kim

And so what would that rough mix be for your -- between share repurchases and paying down debt? I'm assuming on the debt paydown be on your credit facility, which is, as you mentioned before, a pretty low cost of debt.

Edward Weil

Well, there is some CMBS that matures next year. So we're out of the penalty window on that, so we could take a look at that. But again, Chris and I look at this on a very strategic basis. I'm not going to be in a position today to tell you what percentage is going to be buyback versus debt paydown, et cetera. But as we are working on our upcoming 2027 plan and guidance announcement, which, of course, we'll have, that will become clearer to everybody. What I'm the most pleased with is that we do have levers. We do have 830 properties in the portfolio. We can identify really great opportunities like selling some car washes and gas stations that a quarter ago really wasn't part of the plan. I think that probably a number of people on the call today are pleased to see a cash cap rate on office dispositions pretty close to 7.5%.

I would wager that, that's probably a lower cap rate than a number of people have modeled for us. So again, there's no substitute for hard work and focus. We've got the team to do it. We know these assets. We know the portfolio. And when we have things that occur on the disposition side, it creates an opportunity for us to make decisions about how we allocate that capital, whether it is stock buyback or whether it is debt payoff. And ultimately, I think everybody would agree with me, we'd love to be in a situation where the stock price -- the market recognizes the value of GNL, recognizes the fact that if risk-free investing is the 10-year, we're an investment-grade balance sheet.

We've got about 62% investment-grade tenants. We've increased our WALT. We've got annual escalators. By no means is any REIT risk-free, but I certainly think that this opportunity with this yield and this portfolio, it certainly gives people reason to be invested with us, and that will continue to give us even more opportunities.

John Kim

Just a follow-up on the Modiv dispositions. How does that impact your original expectation of 4% AFFO per share accretion?

Edward Weil

Well, that's what we underwrote to, and that's where we're seeing it come in. And from a G&A standpoint, from an accretion standpoint, the integration has been flawless.

Operator

And we'll move on to Jay Kornreich with Cantor Fitzgerald.

Edward Weil

How are you?

Jay Kornreich

Good. I just want to follow up. You mentioned the dividend in the previous earlier comments. So just given some of the recent asset sales and upcoming potential sales from the non-core Modiv assets, I guess, do you see any upcoming adjustments to the dividend? Or does that feel solid and intact as it is going forward?

Edward Weil

So I think I was pretty clear in my prepared statements, Jay, that the portfolio is doing what is required to continue to fund and pay this dividend. I can never speak on behalf of the Board in any forward-looking manner. But I think that over the many quarters, I have stressed to people that I am a believer in where this dividend is I don't think that -- well, let me say it differently. I think that the equity is mispriced, not the dividend. And I'd like to see the stock price find a natural place, obviously, well above where it's trading today. But I am comfortable and confident in our ability to continue at this dividend level.

Jay Kornreich

Okay. I appreciate that. And then just going back to the 3 to 5 assets of noncore assets from the Modiv portfolio. Is there any potential timing for when you would look to sell those? Is that an end of the year event? Or are we looking at some point in 2027 for that?

Edward Weil

I would expect that it would be between now and the middle of next year.

Jay Kornreich

Okay. And then maybe just last, just to double-click on the capital allocation and thinking about the share buybacks. The asset recycling strategy has been focused on, as you know, the office to industrial. But just given the double-digit AFFO yield on the stock, do you think about making more of the switch to office to just pure-play share buybacks? Or does it still make sense to continue with strategy as it is in building the industrial asset pool of the portfolio?

Edward Weil

I think I understand your question, Jay. So if I don't, you can redirect me. But I think that the -- there's a consensus among management and shareholders that reduction of office exposure is a real long-term positive for GNL. So we will continue to focus on that. The proceeds from those types of dispositions gives us the ability to continue to delever and also have the option for stock buyback. That all being said, there is a point in time where we'd like to be much more focused on accretive growth. And when that occurs in the future, it will probably transition from stock buyback to acquisitions. I'm by no means giving you a time frame of that, but it is something that we will continue to look at while we continue to lower our leverage. So it's 3 important goals, and we're working on all of them simultaneously.

Operator

And Rob Stevenson with Huntington will have our next question.

Robert Stevenson

Just a couple of housekeeping items. Mike, when you sell the $70 million of car wash gas and convenience assets, how big is your residual portfolio in that sector?

Edward Weil

We'll be about 2%, I would say, Rob, of straight-line rent.

Robert Stevenson

Okay. That's helpful.

Edward Weil

Yes. Okay.

Robert Stevenson

And then do you expect those sales to close by year-end? Or are those going to push into '27 at this point?

Edward Weil

No, they will close by year-end.

Robert Stevenson

Okay. And then what about the office sales that take you from 23% to 18%. Are those also year-end? Or are some of those going to push into '27?

Edward Weil

Some of those will definitely push into '27. Some of them are structured to push into '27 because one of the things that we've been able to do in certain situations is have a buyer complete due diligence, go hard on their deposit but not close until lease expiration, so we're able to get the balance of the rental income on that property. So the office dispositions will continue in '27.

Robert Stevenson

Okay. That's helpful. And then I guess the other question I have is to what extent are you guys looking -- like I think you talked earlier in the call about signing some lease extensions on some dollar stores and things like that, that those assets are probably most valuable when they have the most remaining WALT of monetizing those similar to what you're doing with the Car Wash gas convenience holdings. How are you guys thinking about selectively doing that as well across the portfolio?

Edward Weil

Yes. Right now, we think of a franchise like Dollar General as a core retail holding that we -- it is not a priority for us to reduce our exposure. We're really continuing to focus on some -- every once in a while, an opportunistic sale where a buyer is willing to pay a price for something that you just can't say no to. But for the most part, continuing to reduce the office exposure. Again, our ultimate job here is to grow GNL. So we're very focused on what is core long term to GNL to what we can continue to renew or extend and create value through the roughly 2% annual escalators in the portfolio that will continue to drive the earnings that we continue to be very pleased with. So not everything is necessarily being marketed by any means. Ultimately, we want to reposition GNL into a primarily industrial with single-tenant retail. That's it.

Operator

[Operator Instructions] Next, we'll move to Michael Gorman with U.S. Bancorp.

Michael Gorman

Just wanted to follow up on the vacant office sales here. Can you just give us a sense for kind of what the buyer pool looks like for these assets? Are these redevelopment plays? Or is this somebody else stepping in that is more willing to underwrite leasing capital or backfill the assets? Or kind of what's the flavor of who's on the other side of these sales?

Edward Weil

A number of the buyers are redevelopment specialists. What we've found is a number of these are -- they're strong suburban markets and the developers are seeing opportunity for kind of mixed-use resi retail. And of course, it's not something that we want to be involved in. I've never thought development fit in a net lease structure. I think we're really much more interested in immediate income and projectability of that income without delay. So they've been an interesting buyer pool. We've also experienced some high net worth local buyers that love their town, love the asset, see it as an opportunity to continue to let that city or town thrive. So those are kind of the 2 most common pools of buyers.

Michael Gorman

Okay. That's helpful. And then if I just look at it from a back of the envelope perspective, and maybe I'm doing it wrong, but the reduction in office exposure versus the pipeline of sales implies kind of a 15-ish percent yield or loss of straight-line rent versus the proceeds. So how should we think about that as we start to think about 2027 in terms of a headwind? And then when we think about '27, are there any additional kind of expected move-outs that aren't in the for-sale pipeline yet?

Edward Weil

So I appreciate the question. I'm not going to answer it. So Yes, exactly. It will come in much more detail with the '27 guidance that we provide. But no, I do think you're looking at it wrong, and it might be best if maybe you and Chris and Ori can spend some time. We'll dive into your model a little bit and make sure we're all thinking about it the right way. But no, we are not forecasting or expecting to forecast, let me say it that way, significant headwinds. So we're -- we will continue to be in this type of position as we talk about '27 next year.

Operator

And Craig Kucera with Lucid Capital Markets will have our next question.

Craig Kucera

You mentioned that 86% of your debt is fixed or swapped to fixed. Can you give us a little more granularity on what amount is actually swapped? And can you give us a sense of when those swaps are expiring between now and 2027?

Edward Weil

Chris, is that something that you can do quickly or we can just set up a call with Craig after and go into that detail?

Christopher Masterson

Yes. I mean we can do further detail on a separate call, but the swaps are almost entirely on the credit facility. Most of the other debt that we have is fixed.

Craig Kucera

Right. Okay. I guess we'll follow up then. And just given the increase in revolver utilization, are you looking to maybe term that out or swap even more of that, the remaining 14%? Or is that more of a capital allocation decision where you might sell additional assets and pay down debt?

Edward Weil

No, we have plenty of capacity on the line that's unused. So I would say neither. And Chris, if there's anything you want to add?

Christopher Masterson

Yes. I would just say that we always evaluate whether to add additional stock swaps. So I've been monitoring that market. If that's likely something that we'll do, but I just want the pricing to be something that is efficient for us.

Craig Kucera

Okay. Changing gears, there's been a lot of discussion about share repurchases and capital allocation. I think you have a little more than $50 million left on your existing $300 million authorization. I also think you have a covenant on your revolver that limits buybacks to $300 million. So I guess as you continue to maybe purchase more stock given where the stock price is at now or first half of next year, would you look to potentially expand the authorization and maybe look for some covenant relief? Or would you likely be done repurchasing stock once you reach $300 million?

Edward Weil

Well, we'll take it under consideration and evaluate it as we need. Right now, the fact that we have $55 million of capacity under the Board-approved credit or stock buyback, we'll take that into account for when we want to use it. I think when we announced the $300 million stock buyback 1.5 years ago, I know that there have been times where others have announced. I think there have been fewer times where people have actually used it. So the $250 million, roughly, $245 million that we have bought back has been very accretive, very valuable for the company. We'll continue to look at it that way and think about it. And I think it's fair to say, as different opportunities and decisions come up, we're prepared to work with our banking group as necessary. It's never been a problem. It's a great group. And we'll be able to accomplish the things that we need to accomplish. So we'll continue to execute on the plan as it's laid out. And I don't see anything in the -- in front of us that we can't address and accomplish.

Craig Kucera

Okay. Just one more for me. Just on the impairment charges this quarter, which were up considerably from the prior couple of quarters. Were those primarily affiliated with the office properties that are going dark...

Edward Weil

Yes.

Craig Kucera

In the fourth quarter that you plan to sell? Okay. I just wanted to...

Edward Weil

Yes.

Operator

And there are no further questions at this time. I would now like to turn the floor back to Michael Weil for closing remarks.

Edward Weil

Great. Well, I always like to thank everyone for making the time to join us and for the coverage that we get from our analyst community. The questions today were really great, and it just makes for a better call. So thanks, everybody, for spending the time being prepared. We're going to, of course, continue to have conversations. We look forward to talking to as many of our shareholders that want to talk. This is an exciting time for GNL. The portfolio and the company, we really are well positioned -- and I think we're coming through a bit of a transition as a sector, the REIT sector itself. And as things normalize, I truly expect GNL to really take its place among the companies that people are comfortable with, understand and want to be invested in. So thank you all for your time. We look forward to catching up, and have a great day.

Operator

Thank you. This does conclude today's teleconference. We thank you for your participation. You may now disconnect your lines at this time.