Global Net Lease Trades on NYSE

NEW YORK CITY—“We built this company from day one with the idea that someday we would be a public company, and we wanted to build an investment-grade balance sheet from the start,” CEO Scott Bowman tells GlobeSt.com. Someday has arrived, and Bowman's company, Global Net Lease Inc., began trading Tuesday on the New York Stock Exchange. With an enterprise value of $3 billion, GNL has also launched a tender offer to buy up to 11.9 million of its common shares.

Formerly known as American Realty Capital Global Trust Inc., the net lease REIT has built a portfolio of more than 300 properties across the US as well as northern and western Europe, in accordance with its corporate sale-leaseback strategy. “We're in 35 industries, we have 79 tenants, 16 and a half million square feet of space and 81% of NOI from investment grade or implied investment grade tenancy,” Bowman says.

As a publicly traded company after putting together its portfolio in the nonlisted space, “We will continue to look for diversity in our portfolio, within the strong and stable markets of the US and northern and western Europe. We will continue to focus on high-quality assets that are mission critical to our tenants, so that they have a strategic investment in every asset that we'll buy.”

Currently, the makeup of GNL's portfolio is about 62% domestic, with the remainder in the UK, Germany, the Netherlands and Finland. Bowman says the investment goal over the next couple of years is to bring the REIT's US and European segments into parity.

Andrew Winer, GNL's president and CIO, says prevailing conditions in Europe favor this strategy. “What we've seen over the past year-and-a-half to two years is a perfect storm for us in a good way, in terms of focusing on this type of net-leased core asset in western and northern Europe,” he tells GlobeSt.com. “For whatever reason, there appears to be a great technical trade in that there is a great deal of supply of this asset type and very little demand.”

In Europe, demand for commercial real estate—whether from European capital or abroad—appears to be focused on two different sectors: “either highly opportunistic real estate in more opportunistic regions like southern or eastern Europe, or money from the sovereign wealth funds potentially focused on markets like London and Frankfurt,” Winer says. “There appears to be a lack of capital chasing what we're looking at.” Further, the onset in 2014 of quantitative easing in Europe has lowered GNL's finance costs.

By contrast, “clearly there are more headwinds” in the US, he says. “We're significantly farther along in this part of the real estate cycle in the US than in Europe, particularly in this asset class. We have a lot more competition on the demand aside of the equation; a lot more assets have been sold over the past seven or eight years.” That being said, Winer adds, “we're trying to be predictive here. We do a lot of our transactions off-market, and we expect to find, through our system, assets that will be accretive to our portfolio.” GNL is externally managed by AR Capital in the US and Moor Park Capital Partners overseas.