Steep loss improvement and portfolio update at Global Net Lease (NYSE: GNL)
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Global Net Lease, Inc. reported a sharply smaller loss for the quarter ended March 31, 2026. Revenue from tenants decreased to $109.3 million from $132.4 million, but total expenses fell significantly as impairment charges and depreciation declined.
Net loss improved to $5.1 million from $189.4 million, helped by income of $3.3 million from discontinued operations tied to the prior $1.780 billion Multi-Tenant Retail Disposition and a $7.9 million gain on real estate sales. Operating cash flow was $39.7 million, and the company ended the period with $137.5 million in cash, cash equivalents and restricted cash and $290.0 million drawn on its multi-currency revolving credit facility.
Positive
- None.
Negative
- None.
Insights
Losses narrowed sharply as asset sale drag faded, while leverage remains substantial.
Global Net Lease generated operating income of $30.9 million versus an operating loss a year earlier, mainly because impairment charges dropped to $11.1 million and depreciation and amortization declined. Discontinued operations turned to a $3.3 million profit following the prior-year Multi-Tenant Retail Disposition loss.
Revenue from tenants fell to $109.3 million, reflecting portfolio changes after selling the multi-tenant retail assets and additional property sales. Interest expense remained high at $39.2 million, with mortgage notes, senior notes and the Revolving Credit Facility together exceeding $2.4 billion of gross debt.
Cash from operations of $39.7 million and net investing inflows of $70.0 million were offset by $165.2 million of net financing outflows, including common dividends, preferred dividends and share repurchases. Future results will depend on execution of the debt profile, use of the $1.8 billion Revolving Credit Facility and income from the remaining net lease portfolio of 809 properties that was 97% leased as of March 31 2026.
Key Figures
Revenue from tenants: $109.3M
Net loss: $5.1M
Impairment charges: $11.1M
+5 more
8 metrics
Revenue from tenants
$109.3M
Three months ended March 31, 2026
Net loss
$5.1M
Three months ended March 31, 2026
Impairment charges
$11.1M
Three months ended March 31, 2026
Operating cash flow
$39.7M
Three months ended March 31, 2026
Cash, cash equivalents and restricted cash
$137.5M
As of March 31, 2026
Gross mortgage notes payable
$1.27B
As of March 31, 2026
Revolving Credit Facility drawn
$290.0M
As of March 31, 2026
Properties and occupancy
809 properties, 97% leased
As of March 31, 2026
Key Terms
Multi-Tenant Retail Disposition, Revolving Credit Facility, Adjusted FFO, cash flow hedges, +2 more
6 terms
Multi-Tenant Retail Disposition financial
"During 2025 the Company completed the sale of the Multi-Tenant Retail Portfolio to RCG (the “Multi-Tenant Retail Disposition”) for a contract sale price of approximately $1.780 billion."
Revolving Credit Facility financial
"The Revolving Credit Facility consists solely of a senior unsecured multi-currency revolving credit facility, and the aggregate total commitments under the Revolving Credit Facility are $1.8 billion."
A revolving credit facility is a type of loan that a business can borrow from whenever it needs money, up to a set limit. It’s like having a credit card for companies—allowing them to borrow, pay back, and borrow again as needed, providing flexibility for managing cash flow or funding short-term expenses.
Adjusted FFO financial
"the Company may not pay distributions ... that exceed 100% of the Company’s Adjusted FFO, as defined in the Credit Agreement (which is different from Adjusted Funds From Operations (“AFFO”) disclosed in this Quarterly Report)."
Adjusted funds from operations (FFO) is a measure of how much cash a real estate investment generates from its regular business activities, excluding certain adjustments like accounting items or non-recurring expenses. It provides a clearer picture of the company's ongoing financial health, helping investors understand its true cash-generating ability. Think of it as measuring how much money a store makes from sales, after removing one-time costs or gains, to see its steady income flow.
cash flow hedges financial
"Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments."
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
AOCI financial
"All of the changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”)."
Accumulated Other Comprehensive Income (AOCI) is a section of owners’ equity that records certain unrealized gains and losses that aren’t shown in the company’s regular profit and loss statement—things like currency translation shifts, changes in the value of certain investments, or pension plan adjustments. Think of it as a separate holding jar for value swings the company hasn’t cashed in yet; investors watch it because large or volatile balances can change reported net worth and signal future earnings or balance-sheet risk when those items are realized.
Level 3 financial
"This receivable is classified as Level 3 of the fair value hierarchy due to the use of unobservable inputs."
Level 3 describes the lowest-confidence category in the accounting “fair value” hierarchy, covering assets or liabilities whose prices are not observable in the market and must be estimated using judgment and internal models. For investors, Level 3 items matter because they can introduce greater uncertainty and potential valuation swings—like valuing a unique antique versus checking a price tag on a supermarket shelf—so they signal higher model risk and lower liquidity.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
| OR | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _________ to __________
Commission File Number: 001-37390
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
______________________________________________________________________________ _____________________________________________________________________________
(Address of principal executive offices) (Zip Code)
(332 ) 265-2020
(Registrant’s telephone number, including area code)
| Securities registered pursuant to section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of May 4, 2026, the registrant had 211,931,451 shares of common stock outstanding.
GLOBAL NET LEASE, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Page | |||||
PART I - FINANCIAL INFORMATION | |||||
Item 1. Financial Statements | |||||
Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025 (Unaudited) | 2 | ||||
Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 3 | ||||
Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 4 | ||||
Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 5 | ||||
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 7 | ||||
Notes to Consolidated Financial Statements (Unaudited) | 9 | ||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 39 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 52 | ||||
Item 4. Controls and Procedures | 52 | ||||
PART II - OTHER INFORMATION | |||||
Item 1. Legal Proceedings | 53 | ||||
Item 1A. Risk Factors | 53 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 55 | ||||
Item 3. Defaults Upon Senior Securities | 55 | ||||
Item 4. Mine Safety Disclosures | 55 | ||||
Item 5. Other Information | 55 | ||||
Item 6. Exhibits | 55 | ||||
Signatures | 57 | ||||
1
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
GLOBAL NET LEASE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
| March 31, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
Real estate investments, at cost (Note 4): | |||||||||||
| Land | $ | $ | |||||||||
| Buildings, fixtures and improvements | |||||||||||
| Construction in progress | |||||||||||
| Acquired intangible lease assets | |||||||||||
| Total real estate investments, at cost | |||||||||||
| Less accumulated depreciation and amortization | ( | ( | |||||||||
| Total real estate investments, net | |||||||||||
Real estate assets held for sale (Note 4) | |||||||||||
Assets related to discontinued operations (Note 3) | |||||||||||
| Cash and cash equivalents | |||||||||||
| Restricted cash | |||||||||||
Derivative assets, at fair value (Note 9) | |||||||||||
| Unbilled straight-line rent | |||||||||||
Operating lease right-of-use asset (Note 13) | |||||||||||
| Prepaid expenses and other assets | |||||||||||
Multi-tenant disposition receivable, net (Note 3) | |||||||||||
| Deferred tax assets | |||||||||||
| Goodwill | |||||||||||
| Deferred financing costs, net | |||||||||||
| Total Assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
Mortgage notes payable, net (Note 5) | $ | $ | |||||||||
Revolving credit facilities (Note 6) | |||||||||||
Senior notes, net (Note 7) | |||||||||||
| Acquired intangible lease liabilities, net | |||||||||||
Derivative liabilities, at fair value (Note 9) | |||||||||||
| Accounts payable and accrued expenses | |||||||||||
Operating lease liability (Note 13) | |||||||||||
| Prepaid rent | |||||||||||
| Deferred tax liability | |||||||||||
| Dividends payable | |||||||||||
Real estate liabilities held for sale (Note 4) | |||||||||||
Liabilities related to discontinued operations (Note 3) | |||||||||||
| Total Liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Stockholders’ Equity (Note 10): | |||||||||||
Common Stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive income | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total Stockholders’ Equity | |||||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
2
GLOBAL NET LEASE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Revenue from tenants | $ | $ | ||||||||||||
| Expenses: | ||||||||||||||
| Property operating | ||||||||||||||
Impairment charges | ||||||||||||||
| Acquisition, transaction and other costs | ||||||||||||||
General and administrative | ||||||||||||||
| Equity-based compensation | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Goodwill impairment | ||||||||||||||
Total expenses | ||||||||||||||
| Operating income (loss) before loss on dispositions of real estate investments | ( | |||||||||||||
| Gain (loss) on dispositions of real estate investments | ( | |||||||||||||
| Operating income (loss) | ( | |||||||||||||
| Other income (expense): | ||||||||||||||
| Interest expense | ( | ( | ||||||||||||
| Loss on extinguishment and modification of debt | ( | ( | ||||||||||||
| Gain (loss) on derivative instruments | ( | |||||||||||||
| Unrealized losses on undesignated foreign currency advances and other hedge ineffectiveness | ( | |||||||||||||
| Other income | ||||||||||||||
Total other expense, net | ( | ( | ||||||||||||
| Net loss before income tax | ( | ( | ||||||||||||
| Income tax expense | ( | ( | ||||||||||||
| Loss from continuing operations | ( | ( | ||||||||||||
| Income (loss) from discontinued operations | ( | |||||||||||||
| Net loss | ( | ( | ||||||||||||
| Preferred stock dividends | ( | ( | ||||||||||||
| Net loss attributable to common stockholders | $ | ( | $ | ( | ||||||||||
| Basic and Diluted Loss Per Share: | ||||||||||||||
| Net loss per share from continuing operations | $ | ( | $ | ( | ||||||||||
| Net income (loss) per share from discontinued operations | ( | |||||||||||||
| Net loss per share attributable to common stockholders — Basic and Diluted | $ | ( | $ | ( | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Weighted average shares outstanding — Basic and Diluted | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
GLOBAL NET LEASE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Other comprehensive (loss) income | ||||||||||||||
| Cumulative translation adjustment | ( | |||||||||||||
| Designated derivatives, fair value adjustments | ||||||||||||||
| Other comprehensive (loss) income | ( | |||||||||||||
| Comprehensive loss | ( | ( | ||||||||||||
| Preferred Stock dividends | ( | ( | ||||||||||||
| Comprehensive loss attributable to common stockholders | $ | ( | $ | ( | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
GLOBAL NET LEASE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share data)
(Unaudited)
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series B Preferred Stock | Series D Preferred Stock | Series E Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Par Value | Number of Shares | Par Value | Number of Shares | Par Value | Number of Shares | Par Value | Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock repurchases, net | — | — | — | — | — | — | — | — | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series B Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series D Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series E Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation, net of forfeitures | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock shares withheld upon vesting of restricted stock | — | — | — | — | — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | — | — | — | — | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Designated derivatives, fair value adjustments | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5
GLOBAL NET LEASE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share data)
(Unaudited)
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred Stock | Series B Preferred Stock | Series D Preferred Stock | Series E Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Par Value | Number of Shares | Par Value | Number of Shares | Par Value | Number of Shares | Par Value | Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock repurchases, net | — | — | — | — | — | — | — | — | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series B Preferred Stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series D preferred stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series E preferred stock, $ | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation, net of forfeitures | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Designated derivatives, fair value adjustments | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
GLOBAL NET LEASE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||
| Depreciation | ||||||||||||||
| Amortization of intangibles | ||||||||||||||
| Amortization of deferred financing costs | ||||||||||||||
| Amortization of discounts on mortgages and senior notes | ||||||||||||||
| Amortization of below-market lease liabilities | ( | ( | ||||||||||||
| Amortization of above-market lease assets | ||||||||||||||
| Amortization related to right-of-use assets | ||||||||||||||
| Amortization of lease incentives | ||||||||||||||
| Unbilled straight-line rent | ( | ( | ||||||||||||
| Equity-based compensation | ||||||||||||||
| Unrealized (gains) losses on foreign currency transactions, derivatives, and other | ( | |||||||||||||
| Unrealized losses on undesignated foreign currency advances and other hedge ineffectiveness | ||||||||||||||
| Net gain on multi-tenant disposition receivable | ( | |||||||||||||
| Loss on extinguishment and modification of debt | ||||||||||||||
| (Gain) loss on dispositions of real estate investments | ( | |||||||||||||
| Lease incentive and commission payments | ( | ( | ||||||||||||
| Impairment charges | ||||||||||||||
| Goodwill impairment | ||||||||||||||
| Changes in operating assets and liabilities, net: | ||||||||||||||
| Prepaid expenses and other assets | ||||||||||||||
| Accounts payable and accrued expenses | ( | ( | ||||||||||||
| Prepaid rent | ( | ( | ||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Net proceeds from dispositions of real estate investments | ||||||||||||||
| Cash received from multi-tenant disposition receivable | ||||||||||||||
| Net cash provided by investing activities | ||||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Borrowings under revolving credit facilities | ||||||||||||||
| Repayments on revolving credit facilities | ( | ( | ||||||||||||
| Principal payments on mortgage notes payable | ( | ( | ||||||||||||
| Common shares repurchased upon vesting of restricted stock | ( | |||||||||||||
| Repurchases of Common Stock, net | ( | ( | ||||||||||||
| Dividends paid on Common Stock | ( | ( | ||||||||||||
| Dividends paid on Series A Preferred Stock | ( | ( | ||||||||||||
| Dividends paid on Series B Preferred Stock | ( | ( | ||||||||||||
| Dividends paid on Series D Preferred Stock | ( | ( | ||||||||||||
| Dividends paid on Series E Preferred Stock | ( | ( | ||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Net change in cash, cash equivalents and restricted cash | ( | ( | ||||||||||||
| Effect of exchange rate changes on cash | ( | ( | ||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
7
GLOBAL NET LEASE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||||||||
| Restricted cash, end of period | ||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
| Non-Cash Investing and Financing Activity: | ||||||||||||||
| Loss on extinguishment of debt | $ | $ | ||||||||||||
| Accrued capital expenditures | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
8
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Note 1 — Organization
Global Net Lease, Inc. (the “Company”) is a real estate investment trust for United States (“U.S.”) federal income tax purposes (“REIT”) that focuses on acquiring and managing a global portfolio of income producing net lease assets across the U.S., and Western and Northern Europe.
As of March 31, 2026, the Company owned 809 properties consisting of 40.3 million rentable square feet, which were 97 % leased, with a weighted-average remaining lease term of 5.9 years. Based on the percentage of annualized rental income on a straight-line basis as of March 31, 2026, approximately 74 % of the Company’s properties were located in the U.S. and Canada and approximately 26 % were located in Europe. In addition, as of March 31, 2026, the Company’s portfolio was comprised of 47 % Industrial & Distribution properties, 27 % Retail properties and 26 % Office properties. The percentages are calculated using annualized straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of March 31, 2026. The straight-line rent includes amounts for tenant concessions.
Substantially all of our business is conducted through Global Net Lease Operating Partnership, L.P. (the “OP”), a Delaware limited partnership, and The Necessity Retail REIT Operating Partnership, L.P., a Delaware limited partnership (“RTL OP,” and together with the OP, the “OPs”), and each of their wholly-owned subsidiaries.
The Company has its own dedicated workforce, which manages the advisory and property management functions of the Company. The Company rents office space for its own dedicated workforce at a property owned by affiliates of AR Global Investments, LLC, the former advisor to the Company (the “Former Advisor”).
Note 2 — Basis of Presentation
Basis of Presentation
The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results for the entire year or any subsequent interim period.
The Company is separately reporting the results of operations of the 100 multi-tenant retail properties (the “Multi-Tenant Retail Portfolio”), which were sold to RCG Venture Holdings, LLC (“RCG”) in the first six months of 2025, as discontinued operations in its consolidated statements of operations for the three months ended March 31, 2026 and 2025. Also, the Company is presenting any remaining assets and liabilities, which consist of various receivables and payables, separately in its consolidated balance sheets as of March 31, 2026 and December 31, 2025. For additional information on the Multi-Tenant Retail Disposition (as defined below), see Note 3 — Multi-Tenant Retail Disposition.
These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025, which are included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 25, 2026. There have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2026.
Principles of Consolidation
The accompanying unaudited consolidated financial statements include the accounts of the Company, the OPs and their subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OPs.
9
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, derivative financial instruments, hedging activities, equity-based compensation expenses, income taxes and fair value measurements, as applicable.
Recently Issued Accounting Pronouncements
Pending Adoption as of March 31, 2026:
In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220) — Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses. The new standard requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. Public entities must apply the new standard to annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements and disclosures.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815) — Hedge Accounting Improvements. The update provides targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.
Note 3 — Multi-Tenant Retail Disposition
During 2025 the Company completed the sale of the Multi-Tenant Retail Portfolio to RCG (the “Multi-Tenant Retail Disposition”) for a contract sale price of approximately $1.780 billion. The Multi-Tenant Retail Disposition is subject to various adjustments, some of which pertain to leases that the Company has negotiated, which were not finalized as of the entry into the purchase and sale agreement on February 25, 2025 (the “Multi-Tenant Retail PSA”) or as of the time of each of the closings. The closings occurred in the following stages (collectively, the “Closings”):
•On March 25, 2025, the Company completed the sale of 59 unencumbered properties (the “First Closing”).
•On June 10, 2025, the Company completed the sale of 28 encumbered properties (the “Second Closing”).
•On June 18, 2025, the Company completed the sale of 12 encumbered properties (the “Third Closing”).
•On June 30, 2025, the Company completed the sale of the one property whose tenant exercised its right of first refusal.
The Company recorded a gain on sale of $0.7 million for the three months ended March 31, 2026 and a loss on sale of approximately $85.2 million during the three months ended March 31, 2025, related to the Multi-Tenant Retail Disposition. These amounts are recorded in loss from discontinued operations in the Company’s consolidated statement of operations for the three months ended March 31, 2026 and 2025. The consideration paid to the Company for the Second Closing and Third Closing included the assumption of two mortgages by RCG. The amount of principal assumed by RCG for these mortgages was $256.3 million and $210.0 million, respectively.
Discontinued Operations
Entry into the Multi-Tenant Retail PSA to sell the Multi-Tenant Retail portfolio to RCG (as discussed above) represented a strategic shift in the Company’s business which initially met the held-for-sale and discontinued operations accounting criteria as of March 31, 2025 and continued to do so as of March 31, 2026. In connection with this transaction, the Company recorded receivables for the expected consideration (collectively, the “Multi-Tenant Disposition Receivable”) to be received by the Company from RCG for leases in process at the time of, and specifically related to the Closings (see the “Multi-Tenant Disposition Receivable, Net” section below for additional information).
10
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The following table presents the assets and liabilities associated with the Multi-Tenant Retail Portfolio. As of March 31, 2026, this includes any remaining liability balance that is expected to be settled over time, however, all 100 properties related to the Multi-Tenant Retail Disposition were sold as of June 30, 2025 and therefore are not included in the March 31, 2026 or December 31, 2025 balances below:
| (in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| ASSETS | ||||||||||||||
| Prepaid expenses and other assets | $ | $ | ||||||||||||
| Assets related to discontinued operations | $ | $ | ||||||||||||
| LIABILITIES | ||||||||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||||||||
| Liabilities related to discontinued operations | $ | $ | ||||||||||||
The operating results of the Multi-Tenant Retail Portfolio were as follows for the periods noted:
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 (1) | ||||||||||||
| Revenue from tenants | $ | $ | ||||||||||||
| Expenses: | ||||||||||||||
| Property operating | ||||||||||||||
| Impairment charges | ||||||||||||||
| Acquisition, transaction and other costs | ||||||||||||||
| General and administrative | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Total expenses | ||||||||||||||
| Operating income before loss on dispositions of real estate investments | ||||||||||||||
| Gain (loss) on dispositions of real estate investments | ( | |||||||||||||
| Operating income (loss) of discontinued operations | ( | |||||||||||||
| Other income (expense): | ||||||||||||||
Interest expense (2) | ( | |||||||||||||
| Loss on extinguishment and modification of debt | ||||||||||||||
| Gain on derivative instruments | ||||||||||||||
| Other income | ||||||||||||||
| Total other income (expense), net | ( | |||||||||||||
| Net income (loss) before income tax | ( | |||||||||||||
| Income tax expense | ||||||||||||||
| Income (loss) from discontinued operations | $ | $ | ( | |||||||||||
__________
(1) Includes a full period of results for the 41 properties that had not yet been sold as of March 31, 2025 and the results of the 59 properties included in the First Closing through March 25, 2025.
11
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The cash flows related to the Multi-Tenant Retail Portfolio have not been segregated and are included in the consolidated statements of cash flows. The following table presents certain cash flow information for the Multi-Tenant Retail Portfolio:
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Depreciation | $ | $ | ||||||||||||
| Amortization of intangibles | ||||||||||||||
| Amortization of discounts on mortgages | ||||||||||||||
| Amortization of below-market lease liabilities | ( | |||||||||||||
| Amortization of above-market lease assets | ||||||||||||||
| Unbilled straight-line rent | ||||||||||||||
| Gain from embedded derivative feature of multi-tenant disposition receivable | ||||||||||||||
| Loss on extinguishment of debt | ||||||||||||||
| Cash proceeds - multi-tenant disposition receivable | ||||||||||||||
| Net proceeds from the Multi-Tenant Retail Disposition | ||||||||||||||
Multi-Tenant Disposition Receivable, Net
At the time of the Closings, the Company recorded receivables from RCG which comprise the Multi-Tenant Disposition Receivable. As part of the portfolio sold, there are leases that had not yet commenced at the time of the Closings. As part of the transaction, the Company agreed to receive proceeds attributed to each of those leases when the respective tenants move into their space.
This receivable balance of $22.0 million as of March 31, 2026 was recorded at fair value and is comprised of a gross receivable of $26.0 million and a net adjustment to fair value of $4.0 million. In calculating the fair value, the Company applied probability weighting, using a range of probabilities from 25 % to 100 % for the likelihood of the tenants moving to open and operating status. This receivable is classified as Level 3 of the fair value hierarchy due to the use of unobservable inputs (see Note 8 — Fair Value of Financial Instruments for additional information) and it represents the full potential amount to be received less the fair value of the embedded derivative ascribed to the potential variability of these commencements. This feature is marked to market each period with changes in value being recorded through earnings. During the three months ended March 31, 2026 and 2025, the Company resolved contingencies associated with potential commencements and obtained new facts and circumstances associated with certain other ongoing leases. As a result, in the three months ended March 31, 2026 and 2025, the Company adjusted the fair value of the embedded derivative to account for those resolutions, which resulted in gains of $2.5 million and $2.0 million for the three months ended March 31, 2026 and 2025, respectively. These amounts are presented as part of discontinued operations in the consolidated statements of operations.
Goodwill
Note 4 — Real Estate Investments, Net
Property Acquisitions
The Company did not acquire any properties during the three months ended March 31, 2026 or 2025.
Acquired Intangible Lease Assets and Liabilities
The Company allocates a portion of the fair value of real estate acquired to identified intangible assets and liabilities, consisting of the value of origination costs (tenant improvements, leasing commissions, and legal and marketing costs), the value of above-market and below-market leases, and the value of tenant relationships, if applicable, based in each case on their relative fair values. The Company periodically assesses whether there are any indicators that the value of the intangible assets
12
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
may be impaired by performing a net present value analysis of future cash flows, discounted for the inherent risk associated with each investment. The Company recorded $0.3 million and $9.0 million of impairment charges on its acquired intangible assets and liabilities during the three months ended March 31, 2026 and 2025, respectively.
Impairment Charges
The Company recorded aggregate impairment charges of approximately $11.1 million and $60.3 million for the three months ended March 31, 2026 and 2025, respectively.
•During the three months ended March 31, 2026, the Company determined that six properties located in the U.S. had an estimated fair value that was lower than the carrying value of the properties, based on the estimated selling price of such properties less selling costs, and as a result, the Company recorded an impairment charge of approximately $11.1 million.
•During the three months ended March 31, 2025, the Company determined that 69 of its properties (68 located in the U.S. and one located in the U.K.) had an estimated fair value that was lower than the carrying value of the properties, based on the estimated selling price of such properties less selling costs, and as a result, the Company recorded an impairment charge of approximately $60.3 million.
Real Estate Assets and Liabilities Held for Sale
When assets and liabilities are identified by management as held for sale, the Company stops recognizing depreciation and amortization expense on the identified assets and estimates the sales price, net of costs to sell, of those assets. If the carrying amount of the assets and liabilities classified as held for sale exceeds the estimated net sales price, the Company records an impairment charge equal to the amount by which the carrying amount of the assets exceeds the Company’s estimate of the net sales price of the assets and liabilities.
As of March 31, 2026, the Company evaluated its real estate assets and liabilities for held for sale classification and determined that six properties qualified for held for sale treatment. Because these assets and liabilities are considered held for sale, the operating results remain classified within continuing operations for all periods presented.
The following table details the major classes of the real estate assets and liabilities associated with the properties that the Company determined to be classified as held for sale as of March 31, 2026 and December 31, 2025.
| (In thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Land | $ | $ | ||||||||||||
| Buildings, fixtures and improvements | ||||||||||||||
| Construction in progress | ||||||||||||||
| Acquired intangible lease assets | ||||||||||||||
| Real estate assets held for sale, at cost | ||||||||||||||
| Less: accumulated depreciation and amortization | ( | ( | ||||||||||||
| Total real estate investments, net | ||||||||||||||
| Prepaid expenses and other assets | ||||||||||||||
| Real estate assets held for sale, net | $ | $ | ||||||||||||
| Below-market leases | $ | $ | ||||||||||||
| Less: accumulated amortization | ( | |||||||||||||
| Real estate liabilities held for sale, net | $ | $ | ||||||||||||
Real Estate Dispositions
During the three months ended March 31, 2026, the Company sold 11 properties (2 Industrial and Distribution properties, 7 Retail properties and 2 Office properties), and recorded a net gain of approximately $7.9 million. During the three months ended March 31, 2026, the Company applied $4.6 million of previously received refundable buyer deposits, which had been recorded as a liability, to the consideration received upon sale of real estate. This amount is reflected as a noncash investing activity.
13
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
During the three months ended March 31, 2025, the Company sold 16 properties (one Industrial and Distribution property, 13 Retail properties and two Office properties), not including the properties sold in the First Closing of the Multi-Tenant Retail Disposition (see Note 3 — Multi-Tenant Retail Disposition for additional information). As a result, the Company recorded a net loss from the sale of properties of $1.7 million (not including the First Closing of the Multi-Tenant Retail Disposition), which is recorded in continuing operations, during the three months ended March 31, 2025.
Significant Tenants
There were no tenants whose annualized rental income on a straight-line basis represented 10.0% or greater of consolidated annualized rental income on a straight-line basis for all properties as of March 31, 2026 and December 31, 2025. The termination, delinquency or non-renewal of leases by any major tenant may have a material adverse effect on revenues.
Geographic Concentration
The following table lists the countries and states where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10.0% of consolidated annualized rental income on a straight-line basis as of March 31, 2026 or December 31, 2025, or both. Michigan is included in the United States concentration of 73.4 %.
| Country / U.S. State | March 31, 2026 | December 31, 2025 | ||||||||||||
| United States | ||||||||||||||
| Michigan | ||||||||||||||
| United Kingdom | ||||||||||||||
14
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Note 5 —Mortgage Notes Payable, Net
Mortgage notes payable, net as of March 31, 2026 and December 31, 2025 consisted of the following:
Encumbered Properties | Outstanding Loan Amount (1), (2) | Effective Interest Rate | Interest Rate | |||||||||||||||||||||||||||||||||||||||||||||||
| Country | Portfolio | March 31, 2026 | December 31, 2025 | Maturity | Anticipated Repayment (3) | |||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Finland: | Finland Properties (4) | $ | $ | Fixed/Variable | Jan. 2029 | Jan. 2029 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Euro denominated | ||||||||||||||||||||||||||||||||||||||||||||||||||
| United States: | Penske Logistics | Fixed | Nov. 2028 | Nov. 2028 | ||||||||||||||||||||||||||||||||||||||||||||||
| Multi-Tenant Mortgage Loan I | Fixed | Nov. 2027 | Nov. 2027 | |||||||||||||||||||||||||||||||||||||||||||||||
| Multi-Tenant Mortgage Loan II | Fixed | Feb. 2028 | Feb. 2028 | |||||||||||||||||||||||||||||||||||||||||||||||
| Multi-Tenant Mortgage Loan III | Fixed | Dec. 2028 | Dec. 2028 | |||||||||||||||||||||||||||||||||||||||||||||||
| Multi-Tenant Mortgage Loan IV | Fixed | May 2029 | May 2029 | |||||||||||||||||||||||||||||||||||||||||||||||
| Multi-Tenant Mortgage Loan V | Fixed | Oct. 2029 | Oct. 2029 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2019 Class A-1 Net-Lease Mortgage Notes | Fixed | May 2049 | May 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2019 Class A-2 Net-Lease Mortgage Notes | Fixed | May 2049 | May 2029 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 Class A-1 Net-Lease Mortgage Notes | Fixed | May 2051 | May 2028 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 Class A-2 Net-Lease Mortgage Notes | Fixed | May 2051 | May 2031 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 Class A-3 Net-Lease Mortgage Notes | Fixed | May 2051 | May 2028 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 Class A-4 Net-Lease Mortgage Notes | Fixed | May 2051 | May 2031 | |||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage Loan III | Fixed | Jan. 2028 | Jan. 2028 | |||||||||||||||||||||||||||||||||||||||||||||||
| CMBS Loan II | Fixed | Apr. 2029 | Apr. 2029 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total USD denominated | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross mortgage notes payable | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage discounts | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Deferred financing costs, net of accumulated amortization (5) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage notes payable, net | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
______________
(1)Amounts borrowed in local currency are translated at the spot rate in effect at the applicable reporting date.
(2)The borrowers’ (wholly-owned subsidiaries of the Company) financial statements are included within the Company’s consolidated financial statements, however, the borrowers’ assets and credit are only available to pay the debts of the borrowers and their liabilities constitute obligations of the borrowers.
(3)The Company determines an anticipated repayment date when the terms of a debt obligation provide for earlier repayment than the legal maturity and when the Company expects to repay such debt obligations earlier due to factors such as elevated interest rates or additional principal payment requirements.
(4)80 % fixed as a result of a “pay-fixed” interest rate swap agreement and 20 % variable. Variable portion is approximately 2.05 % plus 6-month Euribor and reflects the Euribor rate in effect as of March 31, 2026.
(5)Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or paid down before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close.
15
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The following table presents future scheduled aggregate principal payments on the Company’s gross mortgage notes payable over the next four calendar years and thereafter as of March 31, 2026:
(In thousands) | Future Principal Payments (1) | |||||||
| 2026 Remainder | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
______
(1)Assumes exchange rates of €1.00 to $1.15 for Euros (“EUR”) as of March 31, 2026 for illustrative purposes, as applicable.
The total gross carrying value of the Company’s unencumbered assets as of March 31, 2026 was $3.58 billion, and approximately $3.53 billion of this amount was included in the unencumbered asset pool comprising the borrowing base under the Revolving Credit Facility (as defined in Note 6 — Revolving Credit Facility) and therefore is not currently available to serve as collateral for future borrowings under the Revolving Credit Facility.
Mortgage Covenants
Note 6 — Revolving Credit Facility
The table below details the outstanding balances under the Company’s credit agreement as of March 31, 2026 and December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | TOTAL USD (1) | USD | British Pounds Sterling (“GBP”) | EUR (3) | Canadian Dollar (“CAD”) | TOTAL USD (2) | USD | British Pounds Sterling (“GBP”) | EUR | Canadian Dollar (“CAD”) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revolving Credit Facility | $ | $ | £ | € | C$ | $ | $ | £ | € | C$ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Assumes exchange rates of €1.00 to $1.15 for EUR as of March 31, 2026 for illustrative purposes, as applicable.
(2) Assumes exchange rates of €1.00 to $1.17 for EUR as of December 31, 2025 for illustrative purposes, as applicable.
16
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Credit Agreement
On August 5, 2025, the OP, as borrower, together with the Company and certain subsidiaries of the OP acting as guarantors (the “Guarantors”), entered into a credit agreement (the “Credit Agreement” and the credit facilities provided thereunder, collectively, the “Revolving Credit Facility”) with BMO Bank N.A. (“BMO”), as agent, and the other lender parties thereto.
The Revolving Credit Facility consists solely of a senior unsecured multi-currency revolving credit facility, and the aggregate total commitments under the Revolving Credit Facility are $1.8 billion ($100.0 million of which can only be used for U.S. dollar loans), with a $75.0 million sublimit for letters of credit. The Revolving Credit Facility includes an uncommitted “accordion feature” whereby, so long as no default or event of default has occurred and is continuing, the Company has the right to increase the commitments under the Revolving Credit Facility, allocated to either or both the Revolving Credit Facility or a new term loan facility, by up to an additional $1.185 billion, subject to obtaining commitments from new lenders or additional commitments from participating lenders and certain customary conditions. The Revolving Credit Facility matures on August 5, 2029, subject to the OP’s right, subject to customary conditions, to extend the maturity date by up to two additional six-month terms.
Concurrently with the entry into the Credit Agreement, the Company and the other Guarantors entered into a number of guaranty agreements (collectively, the “Guaranty”) and a related contribution agreement, which governs contribution rights of such Guarantors in the event any amounts become payable by them under the Guaranty. The Revolving Credit Facility is supported by a pool of eligible unencumbered properties that are owned by the subsidiaries of the OP that serve as guarantors for so long as the Guaranty is required from such subsidiaries under the terms of the Credit Agreement, and the availability of borrowings under the Revolving Credit Facility continues to be based on the value of a pool of eligible unencumbered real estate assets owned by the Company and compliance with various ratios related to those assets. The Credit Agreement also includes provisions governing the calculation of the value of the borrowing base. Borrowings are, at the option of the Company, able to be denominated in USD, EUR, GBP, CAD and Swiss Francs provided that the total principal amount of non-USD loans does not exceed the sum of the total revolving commitments minus $100.0 million. Amounts borrowed may not, however, be converted to, or repaid in, another currency once borrowed. As of March 31, 2026, approximately $785.6 million was available for future borrowings under the Revolving Credit Facility.
The Revolving Credit Facility requires payments of interest only prior to maturity. Borrowings under the Revolving Credit Facility bear interest at a variable rate per annum based on an applicable margin that varies based on the ratio of consolidated total indebtedness to consolidated total asset value of the Company and its subsidiaries plus either (i) the Base Rate (as defined in the Credit Agreement) or (ii) the applicable Benchmark rate (as defined in the Credit Agreement) for the currency being borrowed. The applicable interest rate margin is based on a range from 0.15 % to 0.75 % per annum with respect to Base Rate borrowings under the Revolving Credit Facility and 1.15 % to 1.75 % per annum with respect to Benchmark rate borrowings under the Revolving Credit Facility (provided that the “floor” on the applicable Benchmark rate is 0 %). In addition, if the Company achieves an Investment Grade Rating (as defined in the Credit Agreement) from at least two rating agencies named in the Credit Agreement, the OP can elect for the spread to be based on the credit rating of the Company.
The Revolving Credit Facility requires the Company through the OP to pay an unused fee per annum of (i) 0.15 % of the unused balance of the Revolving Credit Facility if the unused balance is less than 50 % of the total commitment, or (ii) 0.25 % of the unused balance of the Revolving Credit Facility if the unused balance exceeds or is equal to 50 % of the total commitment. From and after the time the Company obtains an Investment Grade Rating and elects for the applicable interest rate margin to be based on the credit rating of the Company as described in the preceding paragraph, the unused fee will be replaced with a Facility Fee (as defined in the Credit Agreement) based on the total commitment under the Revolving Credit Facility multiplied by 0.30 %, decreasing as the Company’s credit rating increases.
As of March 31, 2026, the Revolving Credit Facility had a weighted-average effective interest rate of 3.3 % after interest rate swaps in place.
The Company, through the OP, may reduce the amount committed under the Revolving Credit Facility and repay outstanding borrowings under the Revolving Credit Facility, in whole or in part, at any time without premium or penalty, other than customary “breakage” costs payable on index borrowings. Upon an event of a default, lenders have the right to terminate their obligations under the Revolving Credit Facility agreement and to accelerate the payment on any unpaid principal amount of all outstanding loans. The terms of the Revolving Credit Facility include various customary operating covenants, including covenants restricting, among other things, restricted payments (including dividends (see below) and share repurchases not to exceed $300.0 million) (see Note 10 — Stockholders' Equity for additional information on repurchases of the Company’s common stock, par value $0.01 per share (“Common Stock”)), the incurrence of liens, the types of investments the Company may make, fundamental changes, agreements with affiliates and changes in nature of business and events of default. The Credit Agreement also contains financial maintenance covenants with respect to maximum consolidated leverage, maximum
17
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
consolidated secured leverage, minimum fixed charge coverage, maximum secured recourse debt, maximum unencumbered leverage, unencumbered interest coverage and minimum net worth. However, since the Company achieved an Investment Grade Rating from Fitch Ratings in October 2025, the financial maintenance covenants with respect to maximum secured recourse debt and minimum net worth do not apply. As of March 31, 2026, the Company was in compliance with all covenants under the Credit Agreement.
Under the terms of the Credit Agreement, the Company may not pay distributions, including cash dividends payable with respect to Common Stock, the Company’s 7.25 % Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”), its 6.875 % Series B Cumulative Redeemable Perpetual Preferred Stock $0.01 par value per share (“Series B Preferred Stock”), its Series D Preferred Stock, its Series E Preferred Stock, or any other class or series of stock the Company may issue in the future, or redeem or otherwise repurchase shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, or any other class or series of stock the Company may issue in the future that exceed 100 % of the Company’s Adjusted FFO, as defined in the Credit Agreement (which is different from Adjusted Funds From Operations (“AFFO”) disclosed in this Quarterly Report on Form 10-Q) for any period of four consecutive fiscal quarters, except in limited circumstances, including that for one fiscal quarter in each calendar year, the Company may pay cash dividends and other distributions, and make redemptions and other repurchases in an aggregate amount equal to no more than 105 % of its Adjusted FFO. However, notwithstanding the preceding sentence, the Company is permitted to make restricted payments (including the making of distributions and share repurchases) in an amount required to be paid by the Company in order for it to (x) maintain its REIT status for federal and state income tax purposes and (y) avoid the payment of federal and state income or excise tax. During a payment or bankruptcy event of default, restricted payments by the Company will only be permitted up to the minimum amount needed to maintain the Company’s status as a REIT for federal and state income tax purposes. In addition, for so long as the Company maintains at least one investment-grade rating from at least one ratings agency (such as its investment-grade BBB- rating received from Fitch Ratings in October 2025), such percentage limitations on the Company’s ability to make distributions will not apply.
The Company’s ability to comply with the restrictions on the payment of distributions in the Credit Agreement depends on its ability to generate sufficient cash flows that in the applicable periods exceed the level of Adjusted FFO required by these restrictions. If the Company is not able to generate the necessary level of Adjusted FFO, the Company will have to reduce the amount of dividends paid on the common and the preferred stock or consider other actions. Alternatively, the Company could elect to pay a portion of its dividends on the Common Stock in additional shares of Common Stock if approved by the Board.
The Company and, prior to the Company achieving an Investment Grade Rating from Fitch Ratings in October 2025, the Guarantors guaranteed, and any wholly owned eligible direct or indirect subsidiary of the OP that directly or indirectly owned or leased a real estate asset added to the pool of eligible unencumbered properties required to be maintained under the Credit Agreement was required to guarantee, the OP’s obligations under the Revolving Credit Facility. The Guarantors guaranteed the OP’s obligations under the Revolving Credit Facility pursuant to one or more Guaranties and a related contribution agreement which governs contribution rights of the Guarantors in the event any amounts become payable under the Guaranty. Since the Company achieved an Investment Grade Rating from Fitch Ratings in October 2025, every Guarantor subsidiary of the OP was released from its respective obligations under the Guaranty as of October 31, 2025. Such Guaranty will again be required (i) if the Company loses its investment grade credit rating, or (ii) with respect to any Guarantor subsidiary of the Company, for so long as the subsidiary is the primary obligor under or provides a guaranty to any holder of unsecured indebtedness.
18
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Note 7 — Senior Notes, Net
The details of the Company’s senior notes are as follows:
| (In thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Aggregate principal amount | $ | $ | ||||||||||||
| Less: Deferred financing costs | ( | ( | ||||||||||||
| Aggregate principal amount | ||||||||||||||
| Less: Discount | ( | ( | ||||||||||||
| Senior Notes, Net | $ | $ | ||||||||||||
On December 16, 2020, the Company and the OP issued $500.0 million aggregate principal amount of 3.75 % Senior Notes due 2027 (the “3.75 % Senior Notes”). The 3.75 % Senior Notes, which were issued at par, will mature on December 15, 2027 and accrue interest at a rate of 3.750 % per year. Interest on the 3.75 % Senior Notes is payable semi-annually in arrears on June 15 and December 15 of each year and they do not require any principal payments prior to maturity. As of March 31, 2026, the Company was in compliance with the covenants under the indenture governing the 3.75 % Senior Notes.
The $500.0 million aggregate principal amount of 4.50 % Senior Notes due 2028 (the “4.50 % Senior Notes”) were recorded at their estimated fair value in connection with the acquisition of The Necessity Retail REIT, Inc. (“RTL”) in September 2023, resulting in the recording of a discount. This discount is being amortized as an increase to interest expense over the remaining term of the 4.50 % Senior Notes. The 4.50 % Senior Notes, which were originally issued by RTL on October 7, 2021 at par, will mature on September 30, 2028 and accrue interest at a rate of 4.50 % per year. Interest on the 4.50 % Senior Notes is payable semi-annually in arrears on March 30 and September 30 of each year and they do not require any principal payments prior to maturity. As of March 31, 2026, the Company was in compliance with the covenants under the indenture governing the 4.50 % Senior Notes.
Note 8 — Fair Value of Financial Instruments
The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value:
Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability and those inputs are significant.
Level 3 — Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.
19
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of March 31, 2026 and December 31, 2025, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. The Company has determined that its derivative valuations, with the exception of the multi-tenant receivable, net, are classified in Level 2 of the fair value hierarchy. See Note 3 — Multi-Tenant Retail Disposition for additional information on the multi-tenant receivable, net.
The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties.
Real Estate Investments Measured at Fair Value on a Non-Recurring Basis
The Company recorded impairments for real estate investments during the three months ended March 31, 2026 and 2025 (see Note 4 — Real Estate Investments, Net for additional information on impairment charges recorded by the Company). The impairments were based on the estimated selling prices, less selling costs, of the impaired properties. The carrying value of these impaired real estate investments on the consolidated balance sheet represents their estimated fair value at the time of impairment.
Impaired real estate investments which are held for use are generally classified in Level 3 of the fair value hierarchy.
Financial Instruments Measured at Fair Value on a Recurring Basis
The following table presents information about the Company’s assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025, aggregated by the level in the fair value hierarchy within which those instruments fall.
| (In thousands) | Quoted Prices in Active Markets Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | ||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||
| Foreign currency forwards, net (GBP & EUR) | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Interest rate swaps, net (USD & EUR) | $ | $ | $ | $ | ||||||||||||||||||||||
| Multi-tenant disposition receivable | $ | $ | $ | $ | ||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| Foreign currency forwards, net (GBP & EUR) | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Interest rate swaps, net (USD,GBP & EUR) | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Multi-tenant disposition receivable | $ | $ | $ | $ | ||||||||||||||||||||||
A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2026 and year ended December 31, 2025.
20
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The change in Level 3 assets was as follows for the periods presented:
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Net receivable recorded for the First Closing | ||||||||||||||
| Net receivable recorded for the Second Closing | ||||||||||||||
| Net receivable recorded for the Third Closing | ||||||||||||||
| Net unrealized gain | ||||||||||||||
| Cash received for open and operating leases | ( | |||||||||||||
Net realized (loss) gain (1) | ( | |||||||||||||
| Ending balance | $ | $ | ||||||||||||
Financial Instruments not Measured at Fair Value
The carrying value of short-term financial instruments such as cash and cash equivalents, restricted cash, due to/from related parties, prepaid expenses and other assets, accounts payable, accrued expenses and dividends payable approximates their fair value due to their short-term nature.
•As of March 31, 2026, the Company’s mortgage notes payable had a gross carrying value of $1.3 billion and a fair value of $1.2 billion. As of December 31, 2025 the Company’s mortgage notes payable had a gross carrying value of $1.3 billion and a fair value of $1.3 billion. This approach relies on unobservable inputs and therefore is classified as Level 3 in the fair value hierarchy.
•As of March 31, 2026, the advances to the Company under the Revolving Credit Facility had a carrying value of $0.3 billion and a fair value of $0.3 billion. As of December 31, 2025, the advances to the Company under the Revolving Credit Facility had a carrying value of $0.3 billion and a fair value of $0.4 billion.
•As of March 31, 2026, the 3.75 % Senior Notes had a gross carrying value of $500.0 million and a fair value of $484.4 million. As of December 31, 2025, the 3.75 % Senior Notes had a gross carrying value of $500.0 million and a fair value of $485.6 million.
•As of March 31, 2026, the 4.50 % Senior Notes had a gross carrying value of $500.0 million and a fair value of $485.0 million. As of December 31, 2025, the 4.50 % Senior Notes had a gross carrying value of $500.0 million and a fair value of $488.8 million.
Note 9 — Derivatives and Hedging Activities
Risk Management Objective of Using Derivatives
The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain obligations in terms of its functional currency, the USD.
The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate and currency risk management. The use of derivative financial instruments carries certain risks, including the risk that any counterparty to a contractual arrangement may not be able to perform under the agreement. To mitigate this risk, the Company only enters into a derivative financial instrument with a counterparty with a high credit rating with a major financial institution, with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any such counterparty will fail to meet its obligations, but there is no assurance that any counterparty will meet these obligations.
21
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of March 31, 2026 and December 31, 2025:
| (In thousands) | Balance Sheet Location | March 31, 2026 | December 31, 2025 | |||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
| Interest rate “pay-fixed” swaps (EUR) | Derivative assets, at fair value | $ | $ | |||||||||||||||||
| Interest rate “pay-fixed” swaps (EUR) | Derivative liabilities, at fair value | ( | ( | |||||||||||||||||
| Total | $ | $ | ( | |||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
| Foreign currency forwards (GBP-USD) | Derivative assets, at fair value | $ | $ | |||||||||||||||||
| Foreign currency forwards (GBP-USD) | Derivative liabilities, at fair value | ( | ( | |||||||||||||||||
| Foreign currency forwards (EUR-USD) | Derivative assets, at fair value | |||||||||||||||||||
| Foreign currency forwards (EUR-USD) | Derivative liabilities, at fair value | ( | ( | |||||||||||||||||
| Total | $ | ( | $ | ( | ||||||||||||||||
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
All of the changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction impacts earnings. During the three months ended March 31, 2026, such derivatives were used to hedge the variable cash flows associated with variable-rate debt.
Amounts reported in AOCI related to derivatives are reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months ending March 31, 2027, the Company estimates that $0.2 million will be reclassified from other comprehensive income as a decrease to interest expense.
In the first quarter of 2025 the Company accelerated the reclassification of amounts in other comprehensive income to earnings as a result of certain hedged forecasted transactions becoming probable not to occur. The accelerated amount was a loss of $3.7 million, and is presented in the unrealized (losses) gains undesignated foreign currency advances and other hedge ineffectiveness line item in the Company’s consolidated statements of operations for the three months ended March 31, 2025.
As of March 31, 2026 and December 31, 2025, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| Derivatives | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | ||||||||||||||||||||||
| (In thousands) | (In thousands) | |||||||||||||||||||||||||
| Interest rate “pay-fixed” swaps (EUR) | $ | $ | ||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
22
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The table below details the location in the consolidated financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three months ended March 31, 2026 and 2025.
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
Amount of loss recognized in AOCI from derivatives | $ | ( | $ | ( | ||||||||||
| Amount of loss reclassified from AOCI into income as interest expense | $ | ( | $ | ( | ||||||||||
Total interest expense recorded in the consolidated statements of operations | $ | $ | ||||||||||||
Net Investment Hedges
The Company is exposed to fluctuations in foreign currency exchange rates on property investments in foreign countries which pay rental income, incur property related expenses and borrow in currencies other than its functional currency, the USD. For derivatives designated as net investment hedges, all of the changes in the fair value of the derivatives, including the ineffective portion of the change in fair value of the derivatives, if any, are reported in AOCI (outside of earnings) as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated. As of March 31, 2026 and December 31, 2025 the Company did not have foreign currency derivatives that were designated as net investment hedges used to hedge its net investments in foreign operations and during the three months ended March 31, 2026 and the year ended December 31, 2025, the Company did not use foreign currency derivatives that were designated as net investment hedges.
Foreign Denominated Debt Designated as Net Investment Hedges
All foreign currency denominated borrowings under the Revolving Credit Facility are designated as net investment hedges. As such, the designated portion of changes in value due to currency fluctuations are reported in AOCI (outside of earnings) as part of the cumulative translation adjustment. The remeasurement gains and losses attributable to the undesignated portion of the foreign currency denominated debt are recognized directly in earnings. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated, or if the Company should no longer possess a controlling interest. The Company records adjustments to earnings for currency impacts related to undesignated excess positions, if any.
During the three months ended March 31, 2025, the Company recorded a loss of approximately $2.6 million due to currency changes on the undesignated excess foreign currency advances over the related net investments. This amount is recorded in unrealized (losses) gains undesignated foreign currency advances and other hedge ineffectiveness in the Company’s consolidated statements of operations. The Company did not record any similar gains or losses during the three months ended March 31, 2026.
Non-designated Derivatives
The Company is exposed to fluctuations in the exchange rates of its functional currency, the USD, against the GBP and the EUR. The Company has used and may continue to use foreign currency derivatives, including options, currency forward and cross currency swap agreements, to manage its exposure to fluctuations in GBP-USD and EUR-USD exchange rates. While these derivatives are economically hedging the fluctuations in foreign currencies, they do not meet the strict hedge accounting requirements to be classified as hedging instruments. Changes in the fair value of derivatives not designated as hedges under qualifying hedging relationships are recorded directly in net income (loss).
The Company recorded a gain on derivative instruments of $3.1 million and a loss on derivative instruments of $3.9 million for the three months ended March 31, 2026 and 2025, respectively.
23
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
As of March 31, 2026 and December 31, 2025, the Company had the following outstanding derivatives that were not designated as hedges under qualifying hedging relationships.
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| Derivatives | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | ||||||||||||||||||||||
| (In thousands) | (In thousands) | |||||||||||||||||||||||||
| Foreign currency forwards (GBP-USD) | $ | $ | ||||||||||||||||||||||||
| Foreign currency forwards (EUR-USD) | ||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
Offsetting Derivatives
The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2026 and December 31, 2025. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the accompanying consolidated balance sheets.
| Gross Amounts Not Offset on the Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Gross Amounts of Recognized Assets | Gross Amounts of Recognized (Liabilities) | Gross Amounts Offset on the Balance Sheet | Net Amounts of (Liabilities) Assets presented on the Balance Sheet | Financial Instruments | Cash Collateral Received (Posted) | Net Amount | |||||||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | ( | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | ( | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
In addition to the above derivative arrangements, the Company also uses non-derivative financial instruments to hedge its exposure to foreign currency exchange rate fluctuations as part of its risk management program, including foreign denominated debt issued and outstanding with third parties to protect the value of its net investments in foreign subsidiaries against exchange rate fluctuations. The Company has drawn, and expects to continue to draw, foreign currency advances under the Revolving Credit Facility to fund certain investments in the respective local currency which creates a natural hedge against the original equity invested in the real estate investments, removing the need for the final cross currency swaps.
Credit-risk-related Contingent Features
The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.
As of March 31, 2026, the Company did not have any counterparties where the net derivative fair value held by that counterparty was in a net liability position including accrued interest but excluding any adjustment for nonperformance. As of March 31, 2026, the Company had not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value.
Note 10 — Stockholders' Equity
Common Stock
As of March 31, 2026 and December 31, 2025, the Company had 212,032,775 216,016,247
Share Repurchase Program
On February 20, 2025, the Board authorized a share repurchase program for up to an aggregate amount of $300 million of the Company’s outstanding Common Stock (the “Share Repurchase Program”). Under the Share Repurchase Program, which does not have a stated expiration date, the Company may repurchase shares of Common Stock from time to time through open market purchases, including pursuant to Rule 10b5-1 pre-set trading plans and under Rule 10b-18 of the Securities Exchange
24
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Act of 1934, as amended, privately negotiated transactions, accelerated share repurchase transactions entered into with one or more counterparties or otherwise, in compliance with applicable securities laws and other legal requirements. The timing, volume, and nature of repurchases are subject to market conditions, applicable securities laws, and other factors, and the program may be amended, suspended or discontinued at any time.
During the three months ended March 31, 2026 and 2025, the Company purchased 4,218,361 and 2,417,442 shares of Common Stock, respectively, for $38.4 million and $19.4 million, respectively.
ATM Program — Common Stock
In November 2025, the Company entered into a new “at the market” equity offering program under which the Company may sell shares of Common Stock, from time to time, through its sales agents (the “2025 Common Stock ATM Program”) and filed a prospectus supplement to its current shelf registration statement on Form S-3 (File No. 333-286918) covering the 2025 Common Stock ATM Program, having an aggregate offering amount of up to $300.0 million. In connection with the establishment of the 2025 Common Stock ATM Program, the Company terminated its prior common stock “at the market” equity offering program (the “2019 Common Stock ATM Program”) and its Series B Preferred Stock “at-the-market” equity offering program, each of which were established in 2019. The prior registration statement had an aggregate offering amount of up to $285.0 million.
Under the 2025 Common Stock ATM Program, the Company may sell shares of its common stock (i) through sales agents, acting as the Company’s sales agents, (ii) directly to the sales agents, acting as principals, or (iii) through forward purchasers, acting as agents in connection with forward sale agreements.
•During the three months ended March 31, 2026 the Company did not sell any shares of Common Stock through the 2025 Common Stock ATM Program.
•During the three months ended March 31, 2025 the Company did not sell any shares of Common Stock through the 2019 Common Stock ATM Program.
Preferred Stock
The Company is currently authorized to issue up to 40,000,000 shares of preferred stock.
•The Company has classified and designated 9,959,650 6,799,467
•The Company has classified and designated 11,450,000 4,695,887
•The Company has classified and designated 7,933,711 shares of its authorized Preferred Stock as authorized shares of Series D Preferred Stock, as of March 31, 2026. The Company had 7,933,711
•The Company has classified and designated 4,595,175 shares of its authorized Preferred Stock as authorized shares of Series E Preferred Stock, as of March 31, 2026. The Company had 4,595,175
Dividends
Common Stock Dividends
In February 2024, the Board approved a dividend policy that reduced the Company’s Common Stock dividend rate to an annual rate of $1.10 per share, or $0.275 per share on a quarterly basis, which became effective with the Common Stock dividend declared and paid in April 2024 and was still effective through January 2025.
In February 2025, the Company announced that the Board planned to reduce the quarterly dividend per share of Common Stock from $0.275 to $0.190 per share, representing an annual dividend rate of $0.76 per share, which became effective with the Common Stock dividend declared in April 2025 and is currently in effect.
Dividends authorized by the Board and declared by the Company are paid on a quarterly basis in arrears during the first month following the end of each fiscal quarter (unless otherwise specified) to common stockholders of record on the record date for such payment. The Board may alter the amounts of dividends paid or suspend dividend payments at any time prior to declaration and therefore dividend payments are not assured. For purposes of the presentation of information herein, the Company may refer to distributions by the OP on Class A Units and GNL LTIP Units as dividends. In addition, see Note 6 — Revolving Credit Facility for additional information on the restrictions on the payment of dividends and other distributions imposed by the Revolving Credit Facility.
25
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Series A Preferred Stock Dividends
Dividends on Series A Preferred Stock accrue in an amount equal to $0.453125 per share per quarter to Series A Preferred Stockholders, which is equivalent to 7.25 % of the $25.00 liquidation preference per share of Series A Preferred Stock per annum. Dividends on the Series A Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record at the close of business on the record date set by the Board.
Series B Preferred Stock Dividends
Dividends on Series B Preferred Stock accrue in an amount equal to $0.4296875 per share per quarter to Series B Preferred Stockholders, which is equivalent to 6.875 % of the $25.00 liquidation preference per share of Series B Preferred Stock per annum. Dividends on the Series B Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record at the close of business on the record date set by the Board.
Series D Preferred Stock Dividends
Dividends on the Company’s Series D Preferred Stock accrue in an amount equal to $0.46875 per share per quarter to Series D Preferred Stockholders, which is equivalent to the rate of 7.50 % of the $25.00 liquidation preference per share per annum. Dividends on the Series D Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record at the close of business on the record date set by the Board.
Series E Preferred Stock Dividends
Dividends on the Company’s Series E Preferred Stock accrue in an amount equal to $0.4609375 per share per quarter to Series E Preferred Stockholders, which is equivalent to the rate of 7.375 % of the $25.00 liquidation preference per share per annum. Dividends on the Series E Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record at the close of business on the record date set by the Board.
Note 11 — Commitments and Contingencies
Litigation and Regulatory Matters
In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company.
Environmental Matters
In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of March 31, 2026, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.
Note 12 — Equity-Based Compensation
2025 Omnibus Incentive Compensation Plan
At the Company’s 2025 annual meeting of stockholders held on May 22, 2025, the Company’s stockholders approved the 2025 Omnibus Incentive Compensation Plan of Global Net Lease, Inc. (the “2025 Equity Plan”). The 2025 Equity Plan is a successor to the Company’s 2021 Omnibus Incentive Compensation Plan (the “2021 Equity Plan”), which was approved by the Company’s stockholders at the 2021 annual meeting of stockholders held on April 12, 2021.
The Company replaced the 2021 Equity Plan as a result of its prior grant of equity awards representing, in the aggregate, the entirety of the 6,300,000 shares of Common Stock reserved for issuance under the 2021 Equity Plan. Because the Company granted awards representing, in the aggregate, the entirety of the shares of Common Stock reserved for issuance under the 2021 Equity Plan, it could no longer make additional awards under the 2021 Equity Plan. The employees of the Former Advisor and its affiliates were also eligible to participate in the Company’s employee and director incentive restricted share plan (the “Restricted Share Plan”).
Upon approval of the 2025 Equity Plan, the total number of shares of Common Stock that are available for issuance or subject to awards is 8,000,000 . Awards under the 2025 Equity Plan may be made in the form of Restricted Shares, RSUs, stock options, stock appreciation rights, performance awards (which may be either performance share units, performance units, or
26
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
performance-based restricted stock), awards of shares not subject to forfeiture or other conditions, LTIP Units and other equity awards. Awards may be granted under the 2025 Equity Plan through May 22, 2035, 10 years following the date the Company’s stockholders approved the 2025 Equity Plan.
Generally, directors, officers, employees, and consultants of the Company are eligible to participate in the 2025 Equity Plan.
RSUs
RSUs represent a contingent right to receive shares of Common Stock at a future settlement date, subject to satisfaction of vesting on a straight-line basis over a specified period of time or other restrictions and an award agreement evidencing the grant of RSUs. Holders of RSUs do not have any voting rights with respect to the RSUs or any shares underlying any award of RSUs. For RSUs issued prior to the fourth quarter of 2024, the holders are generally credited with dividend equivalents which are subject to the same vesting conditions or other restrictions as the underlying RSUs and only paid at the time such RSUs are settled in shares of Common Stock. For RSUs granted in or after the fourth quarter of 2024, the holders receive nonforfeitable cash dividends prior to the time that the RSUs have vested and settled in, or converted into, shares of Common Stock. RSUs may not, in general, be sold or otherwise transferred until restrictions are removed and the RSUs are settled in, or converted into, the shares of Common Stock. The fair value of the RSUs granted, which is expensed over the vesting period, is based on the market price of Common Stock as of the grant date.
A number of RSU award agreements provide for accelerated vesting of all unvested RSUs in connection with a participant’s death, disability or qualifying termination (including termination by the Company without cause or by the participant with good reason, as applicable) from the Company within 60 days immediately preceding or two years immediately following a change in control, and accelerated vesting of the RSUs that would have vested upon the next vesting date in connection with a qualifying termination at any other time. Alternatively, certain of the RSU award agreements provide for accelerated vesting of all unvested RSUs in connection with a participant’s death, disability or qualifying termination (including termination by the Company without cause or by the participant with good reason).
The following table reflects the activity of RSUs outstanding for the periods presented:
| Number of RSUs | Weighted-Average Issue Price | |||||||||||||
| Unvested, December 31, 2025 | $ | |||||||||||||
Vested | ( | |||||||||||||
Granted | ||||||||||||||
Forfeitures | ||||||||||||||
| Unvested, March 31, 2026 | ||||||||||||||
| Number of RSUs | Weighted-Average Issue Price | |||||||||||||
| Unvested, December 31, 2024 | $ | |||||||||||||
Vested | ( | |||||||||||||
Granted | ||||||||||||||
Forfeitures | ( | |||||||||||||
| Unvested, March 31, 2025 | ||||||||||||||
Restricted Shares
Restricted Shares are shares of Common Stock awarded under terms that provide for vesting over a specified period of time. Holders of Restricted Shares receive nonforfeitable cash dividends prior to the time that the restrictions on the Restricted Shares have lapsed. Any dividends to holders of Restricted Shares payable in shares of Common Stock are subject to the same restrictions as the underlying Restricted Shares. Restricted Shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested.
The Restricted Shares granted to the then employees of the Former Advisor or its affiliates vest in 25 50 % of the unvested Restricted Shares will immediately vest and the remaining unvested Restricted Shares will be forfeited.
27
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The following table reflects the activity of Restricted Shares outstanding for the periods presented that impacted the Company:
| Number of Restricted Shares | Weighted-Average Issue Price | |||||||||||||
| Unvested, December 31, 2025 | $ | |||||||||||||
Vested | ||||||||||||||
Granted | ||||||||||||||
Forfeitures | ||||||||||||||
| Unvested, March 31, 2026 | ||||||||||||||
| Number of Restricted Shares | Weighted-Average Issue Price | |||||||||||||
| Unvested, December 31, 2024 | $ | |||||||||||||
Vested | ||||||||||||||
Granted | ||||||||||||||
Forfeitures | ( | |||||||||||||
| Unvested, March 31, 2025 | ||||||||||||||
PSUs
In November 2023, January 2025 and January 2026, the Compensation Committee approved awards of PSUs (the “2023 PSUs,” the “2025 PSUs” and the “2026 PSUs”, respectively), pursuant to the Company’s outstanding equity plans, to full-time employees of the Company. PSUs may be earned and become vested if the Company’s performance meets certain criteria (see below for more detail) over a three-year period performance period (the “PSU Performance Period”).
January 2026 Grant and January 2025 Grant
| Level of Performance | ||||||||||||||||||||
| Threshold | Target | Maximum | ||||||||||||||||||
Potential Number of 2026 PSUs to be Issued (1) | ||||||||||||||||||||
Potential Number of 2025 PSUs to be Issued (2) | ||||||||||||||||||||
_________
(1) The PSU Performance Period for the 2026 PSUs began on January 1, 2026 and ends on December 31, 2028 (the “2026 PSU Measurement Date”) and is generally subject to the applicable employee’s continued employment through the 2026 PSU Measurement Date.
(2) The PSU Performance Period for the 2025 PSUs began on January 1, 2025 and ends on December 31, 2027 (the “2025 PSU Measurement Date”) and is generally subject to the applicable employee’s continued employment through the 2025 PSU Measurement Date.
Under accounting rules, the total fair value of the 2026 PSUs granted at the maximum level under the 2025 Equity Plan totaled $6.6 million and was fixed as of January 2, 2026, the date that the Board approved the award of the 2026 PSUs under the 2025 Equity Plan (the “2026 PSU Grant Date”). The fair value will not be remeasured in subsequent periods unless the 2026 PSUs are amended or there is a change in the expectation for the three-year debt reduction (net debt to adjusted EBITDA) performance metric. The fair value of the 2026 PSUs that were granted is being recorded evenly over the requisite service period which is approximately 3.0 years from January 1, 2026, ending on the 2026 PSU Measurement Date.
Under accounting rules, the total fair value of the 2025 PSUs granted at the maximum level under the 2021 Equity Plan totaled $6.2 million and was fixed as of January 10, 2025, the date that the Board approved the award of the 2025 PSUs under the 2021 Equity Plan (the “2025 PSU Grant Date”). The fair value will not be remeasured in subsequent periods unless the 2025 PSUs are amended or there is a change in the expectation for the three-year debt reduction (net debt to adjusted EBITDA) performance metric. The fair value of the 2025 PSUs that were granted is being recorded evenly over the requisite service period which is approximately 3.0 years from January 13, 2025, ending on the 2025 PSU Measurement Date.
28
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Performance Measures:
The ultimate amount of 2026 PSUs or 2025 PSUs that may become earned and vested on either the 2026 PSU Measurement Date or the 2025 PSU Measurement Date will equal the sum of the 2026 PSUs or 2025 PSUs: (i) earned based on the Company’s debt reduction over a three year period; (ii) earned by comparing the Company’s TSR to a custom designed net lease peer group consisting of Agree Realty Corporation, Broadstone Net Lease, Inc., EPR Properties, Essential Properties Realty Trust, Inc., Four Corners Property Trust, Inc., Getty Realty Corp., Gladstone Commercial Corporation, LXP Industrial Trust, NETSTREIT Corp., NNN REIT Inc., Orion Office REIT Inc., Peakstone Realty Trust and W.P. Carey Inc. (the “2026 and 2025 Custom Net Lease Peer Group”); and (iii) earned by achievement of certain TSR levels (the “2026 and 2025 Company TSR”).
The following table details the number of 2026 PSUs that may be earned and vested on the 2026 PSU Measurement Date and the number of 2025 PSUs that may be earned and vested on the 2025 PSU Measurement Date, by each category of performance goal:
| 2026 PSUs | 2025 PSUs | ||||||||||||||||||||||||||||||||||||||||
| Target | Percentage Earned | Number Earned | Target | Percentage Earned | Number Earned | ||||||||||||||||||||||||||||||||||||
| Three-Year Debt Reduction (Net Debt to Adjusted EBITDA): | |||||||||||||||||||||||||||||||||||||||||
Net debt to adjusted EBITDA greater than | % | % | |||||||||||||||||||||||||||||||||||||||
Net debt to adjusted EBITDA of | % | % | (2) | ||||||||||||||||||||||||||||||||||||||
Net debt to adjusted EBITDA of | % | % | (2) | ||||||||||||||||||||||||||||||||||||||
Net debt to adjusted EBITDA of | % | % | |||||||||||||||||||||||||||||||||||||||
| Company TSR Relative to the 2026 and 2025 Custom Net Lease Peer Group: | |||||||||||||||||||||||||||||||||||||||||
Less than | % | % | |||||||||||||||||||||||||||||||||||||||
| % | % | (2) | |||||||||||||||||||||||||||||||||||||||
| % | % | (2) | |||||||||||||||||||||||||||||||||||||||
Equal to or greater than | % | % | |||||||||||||||||||||||||||||||||||||||
| 2026 and 2025 Company TSR: | |||||||||||||||||||||||||||||||||||||||||
Less than | % | % | |||||||||||||||||||||||||||||||||||||||
| % | % | (2) | |||||||||||||||||||||||||||||||||||||||
| % | % | (2) | |||||||||||||||||||||||||||||||||||||||
| % | % | ||||||||||||||||||||||||||||||||||||||||
_________
(1) If amounts fall in between these ranges, the results will be determined using linear interpolation between those percentiles, respectively.
(2) Amounts may not equal the exact total number of PSUs issued due to rounding.
November 2023 Grant
The PSU Performance Period for the 2023 PSUs began on October 1, 2023 and ends on September 30, 2026 (the “2023 PSU Measurement Date”) and is generally subject to the applicable employee’s continued employment through the 2023 PSU Measurement Date.
| Level of Performance | ||||||||||||||||||||
| Threshold | Target | Maximum | ||||||||||||||||||
| Potential Number of 2023 PSUs to be Issued | ||||||||||||||||||||
Under accounting rules, the total fair value of the 2023 PSUs granted at the maximum level under the 2021 Equity Plan totaled $5.1 million and was fixed as of November 29, 2023, the date that the Board approved the award of 2023 PSUs under the 2021 Equity Plan (the “2023 PSU Grant Date”). The fair value will not be remeasured in subsequent periods unless the 2023 PSUs are amended. The fair value of the 2023 PSUs that were granted is being recorded evenly over the requisite service period which is approximately 2.8 years from November 29, 2023, ending on the 2023 PSU Measurement Date.
29
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Performance Measures:
The ultimate amount of 2023 PSUs that may become earned and vested on the 2023 PSU Measurement Date will equal the sum of: (i) 2023 PSUs earned by comparing the Company’s TSR to the MSCI US REIT Index peer group (the “MSCI REIT Index”); (ii) 2023 PSUs earned by comparing the Company’s TSR to a custom designed net lease peer group consisting of EPR Properties, LXP Industrial Trust, Broadstone Net Lease, Inc., NNN REIT, Inc. and W.P. Carey Inc. (the “2023 Custom Net Lease Peer Group”); and (iii) 2023 PSUs earned by achievement of certain TSR levels (the “2023 Company TSR”).
The following table details the number of 2023 PSUs that may be earned and vested on the 2023 PSU Measurement Date, by each category of performance goal:
| 2023 PSUs | ||||||||||||||||||||
| Target | Percentage Earned | Number Earned | ||||||||||||||||||
| Company TSR Relative to the MSCI REIT Index: | ||||||||||||||||||||
Less than | % | |||||||||||||||||||
| % | ||||||||||||||||||||
| % | ||||||||||||||||||||
Equal to or greater than | % | |||||||||||||||||||
| Company TSR Relative to the 2023 Custom Net Lease Peer Group: | ||||||||||||||||||||
Less than | % | |||||||||||||||||||
| % | ||||||||||||||||||||
| % | ||||||||||||||||||||
Equal to or greater than | % | |||||||||||||||||||
| 2023 Company TSR: | ||||||||||||||||||||
Less than | % | |||||||||||||||||||
| % | ||||||||||||||||||||
| % | ||||||||||||||||||||
| % | ||||||||||||||||||||
_________
(1) If amounts fall in between these ranges, the results will be determined using linear interpolation between those percentiles, respectively.
Compensation Expense
The combined compensation expense for RSUs, Restricted Shares and PSUs was $4.0 million and $3.1 million for the three months ended March 31, 2026 and 2025, respectively. Compensation expense for these equity instruments is recorded as equity-based compensation in the Company’s consolidated statements of operations.
•As of March 31, 2026, the Company had $12.2 million of unrecognized compensation cost related to RSUs granted, which is expected to be recognized over a weighted-average period of 2.0 years.
•As of March 31, 2026, the Company had $0.9 million of unrecognized compensation cost related to Restricted Share awards granted, which is expected to be recognized over a period of 1.2 years.
•As of March 31, 2026, the Company had $0.9 million, $3.6 million and $6.1 million of unrecognized compensation cost related to the 2023 PSUs, 2025 PSUs and 2026 PSUs granted, respectively. The unrecognized compensation cost is expected to be recognized over a period of 0.5 years, 1.75 years and 2.75 years as of March 31, 2026 related to the 2023 PSUs, 2025 PSUs and 2026 PSUs granted, respectively.
Note 13 — Leases
Lessor Arrangements
As of March 31, 2026, the Company’s leases had a weighted-average remaining lease term of 5.9 years.
Lessee Arrangements
As of March 31, 2026, the Company leases land under 16 ground leases associated with certain properties and also has two operating leases for office space. The aggregate durations for the ground leases and operating leases range from 4.0 to 118 years as of March 31, 2026. The Company did not enter into any new ground or operating leases during the first three months of 2026.
As of March 31, 2026 and December 31, 2025, the Company’s balance sheets include ROU assets of $61.9 million and $63.4 million, respectively, and operating lease liabilities of $40.6 million and $41.4 million, respectively. In determining the
30
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
operating ROU assets and lease liabilities for the Company’s operating leases in accordance with lease accounting rules, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. Since the terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Company’s estimate of this rate required significant judgment.
As of March 31, 2026, the Company’s ground leases and operating leases have a weighted-average remaining lease term of approximately 23.8 years and a weighted-average discount rate of 5.42 %. For the three months ended March 31, 2026, the Company paid cash of approximately $0.8 million for amounts included in the measurement of lease liabilities and recorded expense of $0.4 million on a straight-line basis in accordance with the standard.
For the three months ended March 31, 2025, the Company paid cash of approximately $0.6 million for amounts included in the measurement of lease liabilities and recorded expense of $0.4 million on a straight-line basis in accordance with the standard.
The following table reflects the base cash rental payments due from the Company as of March 31, 2026:
| (In thousands) | Future Base Rent Payments (1) | |||||||
| 2026 Remainder | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
Total minimum lease payments (2) | ||||||||
| Less: Effects of discounting | ( | |||||||
| Total present value of lease payments | $ | |||||||
________
(1)Assumes exchange rates of £1.00 to $1.32 for GBP and €1.00 to $1.15 for EUR as of March 31, 2026 for illustrative purposes, as applicable.
31
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Note 14 — Earnings Per Share
The following is a summary of the basic and diluted net loss per share computation for the periods presented:
| Three Months Ended March 31, | ||||||||||||||
| (In thousands, except share and per share data) | 2026 | 2025 | ||||||||||||
| Loss from continuing operations | $ | ( | $ | ( | ||||||||||
| Preferred stock dividends | ( | ( | ||||||||||||
| Adjustments to net loss attributable to common stockholders for common share equivalents | ( | ( | ||||||||||||
| Adjusted net loss attributable to common stockholders - Continuing Operations | ( | ( | ||||||||||||
| Income (loss) from discontinued operations | ( | |||||||||||||
| Adjusted net loss attributable to common stockholders | $ | ( | $ | ( | ||||||||||
| Weighted average common shares outstanding — Basic and Diluted | ||||||||||||||
| Net loss from continuing operations — Basic and Diluted | $ | ( | $ | ( | ||||||||||
| Net income (loss) from discontinued operations — Basic and Diluted | ( | |||||||||||||
| Net loss per share attributable to common stockholders — Basic and Diluted | $ | ( | $ | ( | ||||||||||
Under current authoritative guidance for determining earnings per share, all unvested share-based payment awards that contain non-forfeitable rights to distributions are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The Company’s unvested Restricted Shares, and certain of the Company’s unvested RSUs, contain rights to receive distributions considered to be non-forfeitable, except in certain limited circumstances, and therefore the Company applies the two-class method of computing earnings per share. The calculation of earnings per share above excludes the distributions to the unvested Restricted Shares and certain unvested RSUs from the numerator.
The following table shows common share equivalents on a weighted average basis that were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2026 and 2025 (see Note 12 — Equity-Based Compensation for additional information on all of the common share equivalents listed in the table below):
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Unvested RSUs (1) | ||||||||||||||
Unvested Restricted Shares (2) | ||||||||||||||
Unvested PSUs (3) | ||||||||||||||
| Total common share equivalents excluded from calculation | ||||||||||||||
(1) There were 1,862,045 and 1,915,488 unvested RSUs issued and outstanding as of March 31, 2026 and 2025, respectively.
(2) There were 168,656 and 325,267 unvested Restricted Shares issued and outstanding as of March 31, 2026 and 2025, respectively.
(3) There were 4,757,021 PSUs outstanding as of March 31, 2026 and 3,165,179 outstanding as of March 31, 2025.
32
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Note 15 — Segment Reporting
The Company has three reportable segments based on property type: (1) Industrial & Distribution, (2) Retail and (3) Office. Due to the classification of the Multi-Tenant Retail Portfolio as a discontinued operation, the tables below do not include the results of the Multi-Tenant Retail Portfolio, which are classified within loss from discontinued operations in our consolidated statements of operations for the three months ended March 31, 2026 and 2025 (for additional information, see Note 3 — Multi-Tenant Retail Disposition to our consolidated financial statements included in this Quarterly Report on Form 10-Q).
The Company evaluates performance and makes resource allocations based on its three business segments. The Company is reporting its business segments using the “management approach” model for segment reporting, whereby the Company determines its reportable business segments based on the way the chief operating decision maker organizes business segments within the Company for making operating decisions and assessing financial performance. The Company’s chief operating decision maker, who is the Company’s Chief Executive Officer and President, receives and reviews financial information based on the Company's three segments. The Company evaluates business segment performance based upon net operating income, which is defined as total revenues from tenants, less property operating costs. The segments are managed separately due to the property type and the accounting policies are consistent across each segment. See below for a description of net operating income.
Net Operating Income
The Company evaluates the performance of the combined properties in each segment based on total revenues from tenants, less property operating costs. As such, this excludes all other items of expense and income included in the financial statements in calculating net income (loss). The Company uses net operating income at the segment level to assess and compare property level performance and to make decisions concerning the operation of the properties. The Company believes that the net operating income of each segment is useful as a performance measure because, when compared across periods, the net operating income of each segment reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss).
The net operating income of each segment excludes certain components from net income (loss) in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, do not impact operating performance at the property level. The net operating income of the Company’s segments presented by the Company may not be comparable to similar measures reported by other REITs that define net operating income differently.
33
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The following table provides operating financial information for the Company’s reportable segments:
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Industrial & Distribution: | ||||||||||||||
| Revenue from tenants | $ | $ | ||||||||||||
| Property operating expense | ||||||||||||||
| Net Operating Income | $ | $ | ||||||||||||
| Retail: | ||||||||||||||
| Revenue from tenants | $ | $ | ||||||||||||
| Property operating expense | ||||||||||||||
| Net Operating Income | $ | $ | ||||||||||||
| Office: | ||||||||||||||
| Revenue from tenants | $ | $ | ||||||||||||
| Property operating expense | ||||||||||||||
| Net Operating Income | $ | $ | ||||||||||||
34
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Reconciliation to Consolidated Financial Information
A reconciliation of the total reportable segment's revenue from tenants to consolidated revenue from tenants and the total reportable segment’s net operating income to consolidated net (loss) income before taxes and consolidated net (loss) income attributable to common stockholders is as follows:
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Revenue From Tenants: | ||||||||||||||
| Industrial & Distribution | $ | $ | ||||||||||||
| Retail | ||||||||||||||
| Office | ||||||||||||||
| Total Consolidated Revenue From Tenants | $ | $ | ||||||||||||
| Net loss before income tax and net (loss) income attributable to common stockholders: | ||||||||||||||
| Net Operating Income: | ||||||||||||||
| Industrial & Distribution | $ | $ | ||||||||||||
| Retail | ||||||||||||||
| Office | ||||||||||||||
| Total net operating income | ||||||||||||||
| Impairment charges | ( | ( | ||||||||||||
| Acquisition, transaction and other costs | ( | ( | ||||||||||||
| General and administrative | ( | ( | ||||||||||||
| Equity-based compensation | ( | ( | ||||||||||||
| Depreciation and amortization | ( | ( | ||||||||||||
| Goodwill impairment | ( | |||||||||||||
| Gain (loss) on dispositions of real estate investments | ( | |||||||||||||
| Interest expense | ( | ( | ||||||||||||
| Loss on extinguishment of debt | ( | ( | ||||||||||||
| Gain (loss) on derivative instruments | ( | |||||||||||||
| Unrealized loss on undesignated foreign currency advances and other hedge ineffectiveness | ( | |||||||||||||
| Other income | ||||||||||||||
| Net loss before income tax | ( | ( | ||||||||||||
| Income tax expense | ( | ( | ||||||||||||
| Loss from continuing operations | ( | ( | ||||||||||||
| Income (loss) from discontinued operations | ( | |||||||||||||
| Net loss | ( | ( | ||||||||||||
| Preferred stock dividends | ( | ( | ||||||||||||
| Net loss attributable to common stockholders | $ | ( | $ | ( | ||||||||||
35
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The following table reconciles real estate investments, net by segment to consolidated total assets as of the periods presented:
| (In thousands) | March 31, 2026 (1) | December 31, 2025 (1) | ||||||||||||
| Investments in real estate, net: | ||||||||||||||
| Industrial & Distribution | $ | $ | ||||||||||||
| Retail | ||||||||||||||
| Office | ||||||||||||||
| Total investments in real estate, net | ||||||||||||||
| Real estate assets held for sale | ||||||||||||||
| Assets related to discontinued operations | ||||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Restricted cash | ||||||||||||||
| Derivative assets, at fair value | ||||||||||||||
| Unbilled straight line rent | ||||||||||||||
| Operating lease right-of-use asset | ||||||||||||||
| Prepaid expenses and other assets | ||||||||||||||
| Multi-tenant disposition receivable, net | ||||||||||||||
| Deferred tax assets | ||||||||||||||
| Goodwill and other intangible assets, net | ||||||||||||||
| Deferred financing costs, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
_______
Geographic Information
Other than the U.S. and United Kingdom, no country or tenant individually comprised more than 10% of the Company’s annualized revenue from tenants on a straight-line basis, or total long-lived assets at March 31, 2026. The following tables present the geographic information for Revenue from tenants and Investments in real estate:
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Revenue from tenants: | ||||||||||||||
| United States | $ | $ | ||||||||||||
| United Kingdom | ||||||||||||||
| Europe | ||||||||||||||
| Canada | ||||||||||||||
| Total | $ | $ | ||||||||||||
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GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
| (In thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Investments in real estate, gross: | ||||||||||||||
| United States | $ | $ | ||||||||||||
| United Kingdom | ||||||||||||||
| Europe | ||||||||||||||
| Canada | ||||||||||||||
| Total | $ | $ | ||||||||||||
| Acquired Intangible Liabilities, Gross | ||||||||||||||
| United States | $ | $ | ||||||||||||
| United Kingdom | ||||||||||||||
| Europe | ||||||||||||||
| Canada | ||||||||||||||
| Total | $ | $ | ||||||||||||
Note 16 — Subsequent Events
The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have not been any events that have occurred that would require adjustments to, or disclosures in the consolidated financial statements, except as disclosed in the applicable footnotes and below.
Dispositions
Subsequent to March 31, 2026, the Company disposed of three properties for an aggregate price of $4.5 million.
Pending Acquisition of Modiv Industrial, Inc.
On May 3, 2026, the Company, together with its direct and indirect subsidiaries, GNL Motion Merger Sub, LLC (“REIT Merger Sub”), the OP and GNL Motion OpCo Merger Sub, LLC (“Opco Merger Sub” and, together with GNL, REIT Merger Sub and the Operating Partnership, the “GNL Parties”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Modiv Industrial, Inc. (NYSE: MDV) (“Modiv”) and Modiv Operating Partnership, LP (the “Modiv Operating Partnership” and, together with Modiv, the “Modiv Parties”). Pursuant to the terms and conditions of the Merger Agreement, upon the closing, Modiv will merge with and into REIT Merger Sub with REIT Merger Sub continuing as the surviving entity (the “Modiv Merger”). Contemporaneously therewith or immediately following the Modiv Merger, OpCo Merger Sub will merge with and into the Modiv Operating Partnership, with the Modiv Operating Partnership being the surviving entity (such merger transaction, the “OpCo Merger” and, together with the Modiv Merger, the “Mergers”).
Pursuant to the terms and subject to the conditions of the Merger Agreement, at the date and time the Modiv Merger becomes effective, (i) each outstanding share of Class C common stock, $0.001 par value per share, of Modiv (other than the Excluded Shares (as defined in the Merger Agreement)) will be converted into the right to receive 1.975 shares of Common Stock (such shares of Common Stock issued to the holders of Modiv Common Stock, the “Modiv Common Stock Merger Consideration”), without interest, subject to adjustment as set forth in the Merger Agreement, and cash in lieu of fractional shares, and (ii) each outstanding share of Modiv’s 7.375 % Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share, will be converted into the right to receive an amount in cash equal to $25.00 , plus any accrued and unpaid dividends thereon, if any, to but not including, the closing date of the Mergers. Immediately prior to the time the OpCo Merger becomes effective, subject to the terms and conditions set forth in the Merger Agreement, each outstanding unit of Class X limited partnership interest in the Modiv Operating Partnership will immediately vest in full and be converted into one unit of Class C limited partnership interest (the “Modiv Operating Partnership Class C Units”) in the Modiv Operating Partnership and each outstanding Modiv Operating Partnership Class C Unit (other than the parties to the Merger Agreement and their respective affiliates) will be converted into the right to receive 1.975 OP Units (as defined in the OP Agreement (defined below), and such OP Units issued at the OpCo Merger Effective Time, the “OpCo Merger Consideration OP Units”), plus the right to receive cash in lieu of any fractional OP Units, if any, without interest.
The Merger Agreement contains customary covenants, representations, and warranties, as well as certain termination rights for us and Modiv, in each case, as more fully described in the Merger Agreement. The consummation of the Merger is also
37
GLOBAL NET LEASE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
subject to certain customary closing conditions, including receipt of the approval by the stockholders of Modiv, and certain customary termination rights.
Pursuant to the Merger Agreement, the Company has agreed, at the OpCo Merger Effective Time to adopt an amendment, substantially in the form of Exhibit A to the Merger Agreement (such amendment, the “OP Agreement Amendment”), to the OP’s Second Amended and Restated Agreement of Limited Partnership, originally dated June 2, 2015 (as amended, the “OP Agreement”), to, among other things, (i) require the general partner to use commercially reasonable efforts in certain transactions to avoid causing limited partners to recognize gain for federal income tax purposes, and (ii) grant the OP the right, but not the obligation, to redeem any or all outstanding OP Units at certain redemption amounts in the form of cash or Common Stock, at the Company’s election, provided, that the redemption of any OpCo Merger Consideration OP Units pursuant to such call right shall be made in the form of Common Stock.
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Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Global Net Lease, Inc. and the notes thereto. As used herein, the terms “Company,” “we,” “our” and “us” refer to Global Net Lease, Inc., a Maryland corporation, including, as required by context, Global Net Lease Operating Partnership, L.P. (the “OP”), a Delaware limited partnership, and its subsidiaries.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements”, as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements regarding the intent, belief or current expectations of Global Net Lease, Inc. (“we,” “our,” or “us”) and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “projects,” “potential,” “predicts,” “expects,” “plans,” “intends,” “would,” “could,” “should” or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those contemplated by such forward-looking statements. We believe these forward-looking statements are reasonable; however, you should not place undue reliance on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. We intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA.
These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the risks that any potential future acquisition or disposition by the Company is subject to market conditions, capital availability and timing considerations and may not be identified or completed on favorable terms, or at all. Some of the additional risks and uncertainties, although not all risks and uncertainties, that could cause the Company’s actual results to differ materially from those presented in its forward-looking statements are set forth in the “Risk Factors” and “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2025, this and our other Quarterly Reports on Form 10-Q, and our other filings with the U.S. Securities and Exchange Commission (the “SEC”), as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports.
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Overview
We are a real estate investment trust for United States (“U.S.”) federal income tax purposes (“REIT”) that focuses on acquiring and managing a global portfolio of income producing net lease assets across the U.S., and Western and Northern Europe.
As of March 31, 2026, we owned 809 properties consisting of 40.3 million rentable square feet, which were 97% leased, with a weighted-average remaining lease term of 5.9 years. Based on the percentage of annualized rental income on a straight-line basis as of March 31, 2026, approximately 74% of our properties were located in the U.S. and Canada and approximately 26% were located in Europe. In addition, as of March 31, 2026, our portfolio was comprised of 47% Industrial & Distribution properties, 27% Retail properties and 26% Office properties. The percentages are calculated using annualized straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of March 31, 2026. The straight-line rent includes amounts for tenant concessions.
Our portfolio is leased to primarily “Investment Grade” rated tenants in well-established markets in the U.S. and Europe. A total of 64.4% of our rental income on an annualized straight-line basis for leases in place as of March 31, 2026 was derived from Investment Grade rated tenants, comprised of 33.5% leased to tenants with an actual investment grade rating and 30.9% leased to tenants with an implied investment grade rating. For our purposes, “Investment Grade” includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied investment grade may include actual ratings of the tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or tenants that are identified as investment grade by using a proprietary Moody’s Analytics tool, which generates an implied rating by measuring an entity’s probability of default. Ratings information is as of March 31, 2026.
Agreement and Plan of Merger
On May 3, 2026, the Company, together with its direct and indirect subsidiaries, REIT Merger Sub, the OP and Opco Merger Sub entered into the Merger Agreement with the Modiv Parties. Pursuant to the terms and conditions of the Merger Agreement, upon the closing, Modiv will merge with and into REIT Merger Sub with REIT Merger Sub continuing as the surviving entity. Contemporaneously therewith or immediately following the Modiv Merger, OpCo Merger Sub will merge with and into the Modiv Operating Partnership, with the Modiv Operating Partnership being the surviving entity.
Pursuant to the terms and subject to the conditions of the Merger Agreement, at the date and time the Modiv Merger becomes effective, (i) each outstanding share of Class C common stock, $0.001 par value per share, of Modiv (other than the Excluded Shares (as defined in the Merger Agreement)) will be converted into the right to receive 1.975 shares of Common Stock, without interest, subject to adjustment as set forth in the Merger Agreement, and cash in lieu of fractional shares, and (ii) each outstanding share of Modiv’s 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share, will be converted into the right to receive an amount in cash equal to $25.00, plus any accrued and unpaid dividends thereon, if any, to but not including, the closing date of the Mergers. Immediately prior to the time the OpCo Merger becomes effective, subject to the terms and conditions set forth in the Merger Agreement, each outstanding unit of Class X limited partnership interest in the Modiv Operating Partnership will immediately vest in full and be converted into one Modiv Operating Partnership Class C Unit in the Modiv Operating Partnership and each outstanding Modiv Operating Partnership Class C Unit (other than the parties to the Merger Agreement and their respective affiliates) will be converted into the right to receive 1.975 OP Units, plus the right to receive cash in lieu of any fractional OP Units, if any, without interest.
The Merger Agreement contains customary covenants, representations, and warranties, as well as certain customary termination rights for us and Modiv, in each case, as more fully described in the Merger Agreement.
In addition, the Merger Agreement requires, among other things, that the Company file with the Securities and Exchange Commission a Registration Statement on Form S-4 registering the issuance of the Modiv Common Stock Merger Consideration under the Securities Act of 1933, as amended, which will contain a prospectus of the Company for the issuance of the Modiv Common Stock Merger Consideration and a proxy statement of Modiv with respect to its special meeting of Modiv’s stockholders convened for purposes of obtaining the approval of the Modiv Merger.
Completion of the Mergers, which is expected in the third quarter of 2026, is subject to customary closing conditions, including the approval of Modiv stockholders. No approval of the Company’s stockholders will be required in connection with the Mergers.
Critical Accounting Estimates
For a discussion about our critical accounting estimates and policies, see the “Significant Accounting Estimates and Accounting Policies” section of our 2025 Annual Report on Form 10-K. Except for those required by new accounting pronouncements discussed in the section referenced below, there have been no material changes from these critical accounting estimates and policies.
Recently Issued Accounting Pronouncements
See Note 2 — Basis of Presentation — Recently Issued Accounting Pronouncements to our consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion.
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Table of Contents
Properties
The following table represents a summary by segment of our portfolio of real estate properties as of March 31, 2026:
| Annualized Straight-Line Rent | Annualized Base Rent | Square Feet | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment | Number of Properties | Amount | % | Amount | % | Amount | % | Occupancy | Weighted-Average Remaining Lease Term (Years) (1) | |||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | (In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Industrial & Distribution | 185 | $ | 187,485 | 47 | % | $ | 185,339 | 47 | % | 28,211 | 70 | % | 97 | % | 6.0 | |||||||||||||||||||||||||||||||||||||||||
| Retail | 573 | 109,345 | 27 | % | 107,498 | 27 | % | 6,547 | 16 | % | 97 | % | 6.7 | |||||||||||||||||||||||||||||||||||||||||||
| Office | 51 | 105,872 | 26 | % | 105,014 | 26 | % | 5,517 | 14 | % | 99 | % | 4.2 | |||||||||||||||||||||||||||||||||||||||||||
| Total | 809 | $ | 402,702 | 100 | % | $ | 397,851 | 100 | % | 40,275 | 100 | % | 97 | % | 5.9 | |||||||||||||||||||||||||||||||||||||||||
__________
(1) If the portfolio has multiple properties with varying lease expirations, average remaining lease term is calculated on a weighted-average basis. Weighted average remaining lease term in years is calculated based on square feet as of March 31, 2026.
Results of Operations
We have three remaining reportable segments based on property type: (1) Industrial & Distribution, (2) Retail and (3) Office (for additional information, see Note 15 — Segment Reporting to our consolidated financial statements included in this Quarterly Report on Form 10-Q).
In our Industrial & Distribution, Retail and Office segments, we own, manage and lease single-tenant properties where in addition to base rent, our tenants are required to pay for their property operating expenses or reimburse us for property operating expenses that we incur (primarily property insurance and real estate taxes). However, some limited property operating expenses that are not the responsibility of the tenant are absorbed by us. The main exceptions are properties leased to the Government Services Administration, which do not require the tenant to reimburse the costs.
Due to the classification of the 100 multi-tenant retail properties that were sold in 2025 (the “Multi-Tenant Retail Portfolio”) as a discontinued operation, the tables below do not include the results of the Multi-Tenant Retail Portfolio, which are classified within loss from discontinued operations in our consolidated statements of operations for the three months ended March 31, 2026 and 2025 (for additional information, see Note 3 — Multi-Tenant Retail Disposition to our consolidated financial statements included in this Quarterly Report on Form 10-Q).
Comparison of the Three Months Ended March 31, 2026 and 2025
Net Loss Attributable to Common Stockholders
Net loss attributable to common stockholders was $16.0 million for the three months ended March 31, 2026, as compared to $200.3 million for the three months ended March 31, 2025. The change in net loss attributable to common stockholders is discussed in detail for each line item of the consolidated statements of operations in the sections that follow.
Revenue from Tenants
Consolidated revenue from tenants, detailed by reportable segment, is as follows:
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Revenue From Tenants: | ||||||||||||||
| Industrial & Distribution | $ | 49,184 | $ | 58,009 | ||||||||||
| Retail | 29,546 | 36,958 | ||||||||||||
| Office | 30,556 | 37,448 | ||||||||||||
| Total Consolidated Revenue From Tenants | $ | 109,286 | $ | 132,415 | ||||||||||
Industrial & Distribution
Revenue from tenants in our Industrial & Distribution segment was $49.2 million and $58.0 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in revenue from tenants was due to the loss of revenue of approximately $9.3 million from dispositions, partially offset by higher revenue of approximately $0.5 million from other properties. The net loss of revenue from dispositions primarily resulted from the sale of two groups of properties that were leased by two of our former tenants, which comprised approximately $8.0 million of the decrease. There was minimal impact
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from the year-over-year change in average exchange rates during the three months ended March 31, 2026, when compared to the same period last year.
Retail
Revenue from tenants in our Retail segment was $29.5 million and $37.0 million for the three months ended March 31, 2026 and 2025, respectively. The decrease was primarily driven by the loss of revenue of approximately $7.6 million from dispositions, partially offset by an increase in revenue from other properties of $0.1 million. The loss of revenue from dispositions was primarily related to one tenant which comprised approximately $6.1 million of the decrease. There was minimal impact from the year-over-year change in average exchange rates during the three months ended March 31, 2026, when compared to the same period last year.
Office
Revenue from tenants in our Office segment was $30.6 million and $37.4 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in the first quarter of 2026, when compared to the same period last year, was primarily driven by the net loss of revenue of approximately $8.7 million from dispositions, partially offset by higher revenue from other properties of $1.9 million. The net loss of revenue from dispositions was primarily related to four tenants, which comprised approximately $7.4 million of the decrease. The year-over-year change in foreign exchange rates had a minimal impact.
Property Operating Expenses
Consolidated property operating expenses, detailed by reportable segment, is as follows:
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Property Operating Expenses: | ||||||||||||||
| Industrial & Distribution | $ | 5,257 | $ | 5,257 | ||||||||||
| Retail | 3,674 | 3,906 | ||||||||||||
| Office | 3,994 | 4,790 | ||||||||||||
| Total Consolidated Property Operating Expenses | $ | 12,925 | $ | 13,953 | ||||||||||
Industrial & Distribution
Property operating expenses in our Industrial & Distribution segment were $5.3 million for each of the three months ended March 31, 2026 and 2025. Lower costs of $0.9 million from dispositions were offset by higher costs of $0.9 million from properties owned in both periods due to the timing of our reimbursable costs. There was minimal impact from the year-over-year change in average foreign exchange rates during the three months ended March 31, 2026, when compared to the same period last year.
Retail
Property operating expenses in our Retail segment were $3.7 million and $3.9 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in the first quarter of 2026 was primarily due to lower costs of $1.1 million from properties sold, partially offset by higher costs of $0.9 million, from properties owned in both periods, primarily due to higher costs absorbed by us at one of our properties located in Europe. There was minimal impact from the year-over-year change in average exchange rates during the three months ended March 31, 2026, when compared to the same period last year.
Office
Property operating expenses in our Office segment were $4.0 million and $4.8 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in the first quarter of 2026 was driven by lower costs of $1.1 million from properties sold, partially offset by an increase in costs of $0.3 million from properties owned in both periods. There was minimal impact from the year-over-year change in average exchange rates during the three months ended March 31, 2026, when compared to the same period last year.
Impairment Charges
During the three months ended March 31, 2026, we determined that six of our properties located in the U.S. had an estimated fair value that was lower than the carrying value of the properties, based on the estimated selling price less selling costs of such properties, and as a result, we recorded impairment charges totaling approximately $11.1 million.
During the three months ended March 31, 2025, we determined that 69 of our properties (68 located in the US and one located in the U.K.) had an estimated fair value that was lower than the carrying value of the properties, based on the estimated
42
selling price less selling costs of such properties, and as a result, we recorded an impairment charge of approximately $60.3 million.
Acquisition, Transaction and Other Costs
We recognized $4.4 million and $1.6 million of acquisition, transaction and other costs during the three months ended March 31, 2026 and 2025, respectively. The increase was primarily due to costs incurred in connection with a higher volume of transaction-related activity in the first quarter of 2026.
General and Administrative Expenses
General and administrative expenses were $12.1 million and $16.2 million for the three months ended March 31, 2026 and 2025, respectively, primarily consisting of employee compensation/payroll expenses, professional fees including audit and taxation services, board member compensation and directors’ and officers’ liability insurance. The decrease was primarily due to lower compensation costs and professional fees in the first quarter of 2026.
Equity-Based Compensation
During the three months ended March 31, 2026 and 2025, we recognized equity-based compensation expense of $4.0 million and $3.1 million, respectively. Equity-based compensation in the quarter ended March 31, 2026 consisted of (i) amortization of restricted shares of our Common Stock (“Restricted Shares”) granted to employees of AR Global Investments, LLC, our former advisor (the “Former Advisor”) or its affiliates who were involved in providing services to us prior to the Internalization; (ii) amortization of restricted stock units in respect of shares of Common Stock (“RSUs”) granted to our employees and our independent directors; and (iii) amortization expense related to performance stock units (“PSUs”). The period over period increase in expense was attributable to RSUs and PSUs granted in the first quarter of 2026.
For additional information related to our equity-based compensation, including with respect to the RSUs and PSUs granted in the first quarter of 2026, see Note 12 — Equity-Based Compensation to our consolidated financial statements in this Quarterly Report on Form 10-Q.
Depreciation and Amortization
Depreciation and amortization expense was $41.6 million and $56.3 million for the three months ended March 31, 2026 and 2025, respectively. The decrease was due to lower depreciation and amortization due to dispositions during 2026 and 2025, as well as higher amortization expense in the prior year period of approximately $11 million from the accelerated amortization of in-place lease intangibles during the three months ended March 31, 2025.
Gain (Loss) on Dispositions of Real Estate Investments
During the three months ended March 31, 2026, we sold 11 properties (two Industrial and Distribution properties, seven Retail properties and two Office properties) and recorded a net gain of $7.9 million. During the three months ended March 31, 2026, we applied $4.6 million of previously received refundable buyer deposits, which had been recorded as a liability, to the consideration received upon sale of real estate. This amount is reflected as a noncash investing activity.
During the three months ended March 31, 2025, we sold 16 properties (one Industrial and Distribution property, 13 Retail properties and two Office properties), and recorded a net loss of $1.7 million. These amounts do not include the properties sold in the first quarter of 2025 that were included in the Multi-Tenant Retail Portfolio, which are part of discontinued operations (see Note 3 — Multi-Tenant Retail Disposition for additional information to our consolidated financial statements included in this Quarterly Report on Form 10-Q).
Interest Expense
Interest expense was $39.2 million and $53.4 million for the three months ended March 31, 2026 and 2025, respectively. The decrease was due to lower gross debt outstanding and a lower weighted-average effective interest rate during the three months ended March 31, 2026. The amount of our total gross debt outstanding was $2.6 billion as of March 31, 2026, as compared to $3.4 billion as of March 31, 2025. The weighted-average effective interest rate of our total debt was 4.1% as of March 31, 2026 and 4.2% as of March 31, 2025.
The decrease in interest expense was also impacted by the year-over-year change in average foreign exchange rates during the three months ended March 31, 2026, when compared to the same period last year. As of March 31, 2026, approximately 15% of our total debt outstanding was denominated in Euros (“EUR”). As of March 31, 2025, approximately 16% of our total debt outstanding was denominated in EUR and 1% was denominated in Canadian Dollars (“CAD”).
We view a combination of secured and unsecured financing as an efficient and accretive means to acquire properties and manage working capital. As of March 31, 2026, approximately 50% of our total debt outstanding was secured and 50% was unsecured, the latter including amounts outstanding under our Revolving Credit Facility, our $500.0 million aggregate principal amount of 3.75% Senior Notes due 2027 (the “3.75% Senior Notes”) and $500.0 million aggregate principal amount of 4.50% Senior Notes due 2028 (the “4.50% Senior Notes”).
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The availability of borrowings under the Revolving Credit Facility is based on the value of a pool of eligible unencumbered real estate assets owned by us and compliance with various ratios related to those assets. Our interest expense in future periods will vary based on interest rates, the level of future borrowings, which will depend on refinancing needs and acquisition activity, and changes in currency exchange rates.
Loss on Extinguishment of Debt
The loss on extinguishment of debt was $1.7 million and $0.4 million during the quarters ended March 31, 2026 and March 31, 2025, respectively.
Gain (Loss) on Derivative Instruments
The gain of $3.1 million on derivative instruments for the three months ended March 31, 2026 and the loss of $3.9 million on derivative instruments for the three months ended March 31, 2025, reflect the marked-to-market impact from foreign currency and interest rate derivative instruments used to hedge the investment portfolio from currency and interest rate movements, and was mainly driven by exchange rate changes in British Pounds Sterling (“GBP”) and EUR compared to the USD. For the three months ended March 31, 2026, the gain on derivative instruments consisted of unrealized gains of $3.5 million and realized losses of $0.4 million. For the three months ended March 31, 2025, the loss on derivative instruments consisted of unrealized losses of $3.3 million and realized losses of $0.6 million. The overall gains (or losses) on derivative instruments directly impact our results of operations since they are recorded on the gain on derivative instruments line item in our consolidated results of operations. However, only the realized gains or losses are included in AFFO (as defined below).
As a result of our foreign investments in Europe, and, to a lesser extent, our investments in Canada, we are subject to risk from the effects of exchange rate movements in the EUR, GBP and CAD against the USD, which may affect costs and cash flows in our functional currency, the USD. We generally manage foreign currency exchange rate movements by matching our debt service obligation to the lender and the tenant’s rental obligation to us in the same currency. This reduces our overall exposure to currency fluctuations. In addition, we may use currency hedging to further reduce the exposure to our net cash flow. We are generally a net receiver of these currencies (we receive more cash than we pay out), and therefore our results of operations of our foreign properties benefit from a weaker USD, and are adversely affected by a stronger USD, relative to the foreign currency. Conversely, realized gains from derivatives would generally be lower from a weaker USD, and higher from a stronger USD. We maintain our hedging approach by consistently entering into new foreign exchange forwards for three year periods. Interest rate increases could increase the interest expense on our floating rate debt or any new debt and we are constantly evaluating the use of hedging strategies to mitigate this risk.
See Note 9 — Derivatives and Hedging Activities to our consolidated financial statements in this Quarterly Report on Form 10-Q for additional information on our hedging program.
Unrealized Losses on Undesignated Foreign Currency Advances and Other Hedge Ineffectiveness
We recorded a loss of $6.4 million on undesignated foreign currency advances and other hedge ineffectiveness during the quarter ended March 31, 2025, related to the accelerated reclassification of amounts in accumulated other comprehensive loss to earnings. We did not record any such gains or losses for the three months ended March 31, 2026.
Income Tax Expense
Although as a REIT we generally do not pay U.S. federal income taxes on the amount of REIT taxable income that is distributed to stockholders, we recognize income tax benefit (expense) domestically for state taxes and local income taxes incurred, if any, and also in foreign jurisdictions in which we own properties. In addition, we perform an analysis of potential deferred tax or future tax benefit and expense as a result of book and tax differences and timing differences in taxes across jurisdictions. Income tax expense was $1.6 million and $3.3 million for the three months ended March 31, 2026 and 2025, respectively.
Preferred Stock Dividends
Preferred stock dividends were $10.9 million for the three months ended March 31, 2026 and 2025. The amounts in both periods represent the dividends that are attributable to holders of Series A Preferred Stock, Series B Preferred Stock, Series D Preferred Stock and Series E Preferred Stock.
Cash Flows from Operating Activities
The level of cash flows provided by operating activities is driven by, among other things, rental income received, property operating expenses and interest payments on outstanding borrowings.
During the three months ended March 31, 2026, net cash provided by operating activities was $39.7 million. Cash flows provided by operating activities during the three months ended March 31, 2026 reflect net loss of $5.1 million, adjusted for non-cash items of $67.3 million (primarily depreciation, amortization of intangibles, amortization of deferred financing costs, amortization of mortgage discounts, amortization of above- and below-market lease and ground lease assets and liabilities, amortization of right of use assets, amortization of lease incentives and commissions, unbilled straight-line rent, equity-based compensation, unrealized gains on foreign currency transactions, derivatives and other non-cash items). In addition, operating
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cash flow was impacted by lease incentive and commission payments of $2.4 million and a net decrease of $8.9 million in working capital items due to a decrease in accounts payable and accrued expenses of $12.2 million, a decrease in prepaid rent of $1.5 million and a decrease in prepaid expenses and other assets of $4.8 million.
During the three months ended March 31, 2025, net cash provided by operating activities was $59.2 million. Cash flows provided by operating activities during the three months ended March 31, 2025 reflect net loss of $189.4 million, adjusted for non-cash items of $178.5 million (primarily depreciation, amortization of intangibles, amortization of deferred financing costs, amortization of mortgage discounts, amortization of above- and below-market lease assets and liabilities, amortization of right of use assets, amortization of lease incentives and commissions, unbilled straight-line rent, equity-based compensation, unrealized gains on foreign currency transactions, derivatives and other non-cash items). In addition, operating cash flow was impacted by lease incentive and commission payments of $1.9 million and a net decrease of $14.9 million in working capital items due to a decrease in prepaid expenses and other assets of $6.2 million, a decrease in accounts payable and accrued expenses of $16.5 million and a decrease in prepaid rent of $4.6 million.
Cash Flows from Investing Activities
Net cash provided by investing activities during the three months ended March 31, 2026 of $70.0 million consisted of net proceeds from dispositions of $63.1 million and cash received from the multi-tenant disposition receivable of $8.5 million, which were partially offset by capital expenditures of $1.6 million.
Net cash provided by investing activities during the three months ended March 31, 2025 of $900.7 million consisted of net proceeds from dispositions of $910.5 million, principally from the properties sold in the first quarter of 2025 that were included in the Multi-Tenant Retail Portfolio, which were partially offset by capital expenditures of $9.8 million.
Cash Flows from Financing Activities
Net cash used in financing activities of $165.2 million during the three months ended March 31, 2026 was a result of net paydowns of borrowings under our Revolving Credit Facility of $28.1 million, net payments of principal on mortgage notes payable of $44.9 million, $38.4 million of Common Stock repurchases, dividends paid to common stockholders of $41.3 million, dividends paid to holders of our Series A Preferred Stock of $3.1 million, dividends paid to holders of our Series B Preferred Stock of $2.0 million, dividends paid to holders of our Series D Preferred Stock of $3.7 million, and dividends paid to holders of our Series E Preferred Stock of $2.1 million.
Net cash used in financing activities of $975.6 million during the three months ended March 31, 2025 was a result of net paydowns of borrowings under our Revolving Credit Facility of $875.2 million, net payments of principal on mortgage notes payable of $6.2 million, $19.4 million of Common Stock repurchases, dividends paid to common stockholders of $63.9 million, dividends paid to holders of our Series A Preferred Stock of $3.1 million, dividends paid to holders of our Series B Preferred Stock of $2.0 million, dividends paid to holders of our Series D Preferred Stock of $3.7 million, dividends paid to holders of our Series E Preferred Stock of $2.1 million.
Liquidity and Capital Resources
Our principal future needs for cash and cash equivalents include the purchase of additional properties or other investments, payment of related acquisition costs, improvement costs, operating and administrative expenses, repayment of certain debt obligations, which includes our continuing debt service obligations and dividends to holders of our Common Stock and Preferred Stock, as well as to any future class or series of preferred stock we may issue. As of March 31, 2026 and December 31, 2025, we had cash and cash equivalents of $125.5 million and $180.1 million, respectively. See discussion above for how our cash flows from various sources impacted our cash.
Management expects that cash generated from operations, supplemented by our existing cash will be sufficient to fund, in the near term and long term, the payment of quarterly dividends to our common stockholders and holders of our Preferred Stock, as well as anticipated capital expenditures. During the three months ended March 31, 2026, cash generated from operations covered 76% of our dividends paid. Our other sources of capital, which we have used and may use in the future, include proceeds received from our Revolving Credit Facility, proceeds from secured or unsecured financings (which may include note issuances), proceeds from our offerings of equity securities (including Common Stock and Preferred Stock), proceeds from any future sales of properties and undistributed cash flows from operations, if any.
Acquisitions, Dispositions and Pending Transactions
We are in the business of acquiring real estate properties and leasing the properties to tenants. Generally, we fund our acquisitions through a combination of cash and cash equivalents, proceeds from offerings of equity securities, borrowings under our Revolving Credit Facility and proceeds from mortgage or other debt secured by the acquired or other assets at the time of acquisition or at some later point. In addition, to the extent we dispose of properties, we have used and may continue to use the net proceeds from the dispositions (after repayment of any mortgage debt, if any) for future acquisitions or other general corporate purposes.
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Acquisitions and Dispositions — Three Months Ended March 31, 2026
We did not acquire any properties during the three months ended March 31, 2026. We sold 11 properties (two Industrial and Distribution properties, seven Retail properties and two Office properties), for an aggregate contract price of approximately $70.6 million during the three months ended March 31, 2026.
Acquisitions and Dispositions — Subsequent to March 31, 2026
We did not acquire any properties subsequent to March 31, 2026. We disposed of three properties for an aggregate sale price of approximately $4.5 million subsequent to March 31, 2026.
Pending Transactions — Acquisitions
In addition to the pending acquisition of Modiv described above, we have signed a purchase and sale agreement (“PSA”) to acquire one industrial property for a purchase price of approximately $14.1 million. This PSA may not lead to a definitive agreement and there can be no assurance we will complete the acquisition, or any future acquisition, on a timely basis or on acceptable terms and conditions, if at all.
Pending Transactions — Dispositions
We have signed PSAs to dispose of 10 properties for a contract sale price of approximately $57.1 million and we have signed non-binding letters of intent (“LOIs”) to dispose of two properties for an aggregate contract sale price of approximately $49.5 million. The LOIs may not lead to definitive agreements and the PSAs are subject to conditions and there can be no assurance we will complete the acquisitions or dispositions, or any future acquisitions or dispositions, on a timely basis or on acceptable terms and conditions, if at all.
Equity Offerings
In November 2025, we entered into a new “at the market” equity offering program under which we may sell shares of Common Stock, from time to time, through our sales agents (the “2025 Common Stock ATM Program”) and filed a prospectus supplement to our current shelf registration statement on Form S-3 (File No. 333-286918) covering the 2025 Common Stock ATM Program, having an aggregate offering amount of up to $300.0 million. Under the 2025 Common Stock ATM Program, we may sell shares of our Common Stock (i) through sales agents, acting as sales agents, (ii) directly to the sales agents, acting as principals, or (iii) through forward purchasers, acting as agents in connection with forward sale agreements.
During the three months ended March 31, 2026 we did not sell any shares of Common Stock through the 2025 Common Stock ATM Program. See Note 10 — Stockholders' Equity our consolidated financial statements included in this Quarterly Report on Form 10-Q for further discussion on our ATM program.
Share Repurchase Program
On February 20, 2025, our Board authorized a share repurchase program for up to an aggregate amount of $300 million of shares of Common Stock (the “Share Repurchase Program”). Under the Share Repurchase Program, which does not have a stated expiration date, the Company may repurchase shares of Common Stock from time to time through open market purchases, including pursuant to Rule 10b5-1 pre-set trading plans and under Rule 10b-18 of the Exchange Act, privately negotiated transactions, accelerated share repurchase transactions entered into with one or more counterparties or otherwise, in compliance with applicable securities laws and other legal requirements. The timing, volume, and nature of repurchases are subject to market conditions, applicable securities laws, and other factors, and the program may be amended, suspended or discontinued at any time. During the three months ended March 31, 2026, we purchased 4,218,361 shares of Common Stock for approximately $38.4 million, or an average share price of $9.07, leaving $141.8 million available under the Share Repurchase Program.
Borrowings
As of March 31, 2026 and December 31, 2025, we had total gross debt outstanding of $2.6 billion, bearing interest at weighted-average interest rates per annum equal to 4.1% and 4.2%, respectively.
As of March 31, 2026, 99% of our total debt outstanding either bore interest at fixed rates, or was swapped to a fixed rate, which bore interest at a weighted average interest rate of 4.2% per annum. As of March 31, 2026, 1% of our total debt outstanding was variable-rate debt, which bore interest at a weighted average interest rate of 4.1% per annum. The total gross carrying value of unencumbered assets as of March 31, 2026 was $3.58 billion, of which approximately $3.53 billion was included in the unencumbered asset pool comprising the borrowing base under the Revolving Credit Facility and therefore is not currently available to serve as collateral for future borrowings under the Revolving Credit Facility.
Our debt leverage ratio was 54.6% and 55.2% (total debt as a percentage of total purchase price of real estate investments, based on the exchange rate at the time of purchase) as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, the weighted-average maturity of our indebtedness was 2.7 years (including the two additional six-month extension options on our Revolving Credit Facility). We believe we have the ability to service our debt obligations as they come due.
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Senior Notes
Both the 3.75% and the 4.50% Senior Notes do not require any principal payments prior to maturity. As of March 31, 2026, the carrying amount of the 3.75% and the 4.50% Senior Notes on our balance sheets totaled $934.0 million in the aggregate, which is net of $66.0 million of deferred financing costs and discounts, and as of December 31, 2025, the carrying amount on our balance sheets totaled $928.2 million in the aggregate, which is net of $71.8 million of deferred financing costs and discounts. See Note 7 — Senior Notes, Net to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
Mortgage Notes Payable
As of March 31, 2026 and December 31, 2025, we had secured gross mortgage notes payable of $1.3 billion. All of our current mortgage loans require payment of interest-only with the principal due at maturity. We have $94.5 million of principal payments due on our mortgages during the remainder of 2026. See Note 5 — Mortgage Notes Payable, Net to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information on our mortgage notes payable.
Credit Facility
On August 5, 2025, the OP, as borrower, together with us and certain subsidiaries of the OP acting as guarantors, entered into a credit agreement (the “Credit Agreement” and the credit facilities provided thereunder, collectively, the “Revolving Credit Facility”) with BMO Bank N.A. (“BMO”), as agent, and the other lender parties thereto.
The Revolving Credit Facility consists solely of a senior unsecured multi-currency revolving credit facility, and the aggregate total commitments under the Revolving Credit Facility are $1.8 billion ($100.0 million of which can only be used for U.S. dollar loans), with a $75.0 million sublimit for letters of credit. The Revolving Credit Facility includes an uncommitted “accordion feature” whereby, so long as no default or event of default has occurred and is continuing, we have the right to increase the commitments under the Revolving Credit Facility, allocated to either or both the Revolving Credit Facility or a new term loan facility, by up to an additional $1.185 billion, subject to obtaining commitments from new lenders or additional commitments from participating lenders and certain customary conditions. The Revolving Credit Facility matures on August 5, 2029, subject to the OP’s right, subject to customary conditions, to extend the maturity date by up to two additional six-month terms.
As of March 31, 2026 and December 31, 2025, outstanding borrowings under our Revolving Credit Facility were $290.0 million and $324.2 million, respectively. During the three months ended March 31, 2026, we made net additional paydowns of $28.1 million on these borrowings. As of March 31, 2026, approximately $785.6 million was available for future borrowings under the Revolving Credit Facility.
See Note 6 — Revolving Credit Facility to our consolidated financial statements included in this Quarterly Report on Form 10-Q for further discussion on the Revolving Credit Facility and related covenants under such facilities.
Covenants
As of March 31, 2026, we were in compliance with the covenants under the indenture governing the 3.75% Senior Notes, the indenture governing the 4.50% Senior Notes and the Credit Agreement (see Note 6 — Revolving Credit Facility and Note 7 — Senior Notes, Net to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information).
As of March 31, 2026, we were in compliance with all property-level debt covenants with the exception of two property-level debt instruments. For those two property-level debt instruments, we either (a) implemented a cure to the underlying noncompliance trigger by providing a letter of credit, or (b) permitted excess net cash flow after debt service from the impacted properties to become restricted, in each case in accordance with the terms of the applicable debt instrument. Each letter of credit, for so long as it is outstanding, represents a dollar-for-dollar reduction to availability for future borrowings under our Revolving Credit Facility. While the restricted cash cannot be used for general corporate purposes, it is available to fund operations of the underlying assets. These matters did not have a material impact on our liquidity or our ability to operate the impacted assets.
Non-GAAP Financial Measures
This section discusses the non-GAAP financial measures we use to evaluate our performance including Funds from Operations (“FFO”), Core Funds from Operations (“Core FFO”) and Adjusted Funds from Operations (“AFFO”). A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measure, which is net income, is provided below.
Use of Non-GAAP Measures
FFO, Core FFO, and AFFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO, Core FFO and AFFO measures. Other REITs may not define FFO in accordance with the current NAREIT (as defined below) definition (as we do), or may interpret the current NAREIT
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definition differently than we do, or may calculate Core FFO or AFFO differently than we do. Consequently, our presentation of FFO, Core FFO and AFFO may not be comparable to other similarly-titled measures presented by other REITs.
We consider FFO, Core FFO and AFFO useful indicators of our performance. Because FFO, Core FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gain or loss from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO, Core FFO and AFFO presentations can facilitate comparisons of operating performance between periods and between other REITs in our peer group.
As a result, we believe that the use of FFO, Core FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance including relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. However, FFO, Core FFO and AFFO are not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Investors are cautioned that FFO, Core FFO and AFFO should only be used to assess the sustainability of our operating performance excluding these activities, as they exclude certain costs that have a negative effect on our operating performance during the periods in which these costs are incurred.
Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations
Funds From Operations
Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has promulgated a measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP.
We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gain and loss from the sale of certain real estate assets, gain and loss from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Our FFO calculation complies with NAREIT’s definition.
FFO includes adjustments related to the treatment of the Multi-Tenant Retail Portfolio as a discontinued operation, which includes adjustments for depreciation and amortization and loss (gain) on dispositions of real estate investments.
The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and, when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.
Core Funds From Operations
In calculating Core FFO, we start with FFO, then we exclude certain non-core items such as acquisition, transaction and other costs, as well as certain other costs that are considered to be non-core, such as debt extinguishment or modification costs. The purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our core business plan to generate operational income and cash flows in order to make dividend payments to stockholders. In evaluating investments in real estate, we differentiate the costs to acquire the investment from the subsequent operations of the investment. We also add back non-cash write-offs of deferred financing costs, prepayment penalties and certain other costs incurred with the early extinguishment or modification of debt which are included in net income but are considered financing cash flows when paid in the statement of cash flows. We consider these write-offs and prepayment penalties to be capital transactions and not indicative of operations. By excluding expensed acquisition, transaction and other costs as well as non-core costs, we believe Core FFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties.
Core FFO includes adjustments related to the treatment of the Multi-Tenant Retail Portfolio as a discontinued operation, which includes adjustments for acquisition and transaction costs and loss on extinguishment of debt.
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Adjusted Funds From Operations
In calculating AFFO, we start with Core FFO, then we exclude certain income or expense items from AFFO that we consider more reflective of investing activities, other non-cash income and expense items and the income and expense effects of other activities or items, including items that were paid in cash that are not a fundamental attribute of our business plan or were one time or non-recurring items. These items include early extinguishment or modification of debt and other items excluded in Core FFO as well as unrealized gain and loss, which may not ultimately be realized, such as gain or loss on derivative instruments, gain or loss on foreign currency transactions, and gain or loss on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent and equity-based compensation from AFFO, we believe we provide useful information regarding income and expense items which have a direct impact on our ongoing operating performance. We also exclude revenue attributable to the reimbursement by third parties of financing costs that we originally incurred because these revenues are not, in our view, related to operating performance. We also include the realized gain or loss on foreign currency exchange contracts for AFFO as such items are part of our ongoing operations and affect our current operating performance.
In calculating AFFO, we also exclude certain expenses which under GAAP are treated as operating expenses in determining operating net income. All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments or modifications) and certain other expenses negatively impact our operating performance during the period in which expenses are incurred or properties are acquired and will also have negative effects on returns to investors, but are excluded by us as we believe they are not reflective of on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income. In addition, as discussed above, we view gain and loss from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management’s analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gain or loss, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used to, among other things, assess our performance without the impact of transactions or other items that are not related to our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) calculated in accordance with GAAP as presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.
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| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Net loss attributable to common stockholders (in accordance with GAAP) | $ | (16,014) | $ | (200,315) | ||||||||||
Impairment charges | 11,115 | 60,315 | ||||||||||||
| Depreciation and amortization | 41,612 | 56,334 | ||||||||||||
| (Gain) loss on dispositions of real estate investments | (7,879) | 1,678 | ||||||||||||
| Discontinued operations FFO adjustments | (748) | 114,949 | ||||||||||||
| FFO (as defined by NAREIT) attributable to common stockholders | 28,086 | 32,961 | ||||||||||||
| Acquisition, transaction and other costs | 4,387 | 1,579 | ||||||||||||
| Loss on extinguishment and modification of debt | 1,707 | 418 | ||||||||||||
| Discontinued operations Core FFO adjustments | — | 9 | ||||||||||||
Core FFO attributable to common stockholders | 34,180 | 34,967 | ||||||||||||
Non-cash equity-based compensation | 4,042 | 3,093 | ||||||||||||
Non-cash portion of interest expense | 2,260 | 2,486 | ||||||||||||
| Amortization related to above- and below- market lease intangibles and right-of-use assets, net | 1,106 | 160 | ||||||||||||
| Straight-line rent | (680) | (5,235) | ||||||||||||
| Unrealized losses on undesignated foreign currency advances and other hedge ineffectiveness | — | 6,351 | ||||||||||||
Eliminate unrealized (gains) losses on foreign currency transactions (1) | (3,517) | 3,304 | ||||||||||||
| Amortization of discounts on mortgages and senior notes | 9,041 | 13,960 | ||||||||||||
Goodwill impairment (2) | — | 7,134 | ||||||||||||
Eliminate gains related to multi-tenant disposition receivable (3) | (2,536) | — | ||||||||||||
| AFFO attributable to common stockholders | $ | 43,896 | $ | 66,220 | ||||||||||
| Summary | ||||||||||||||
| FFO (as defined by NAREIT) attributable to common stockholders | $ | 28,086 | $ | 32,961 | ||||||||||
| Core FFO attributable to common stockholders | $ | 34,180 | $ | 34,967 | ||||||||||
| AFFO attributable to common stockholders | $ | 43,896 | $ | 66,220 | ||||||||||
_________
(1)For AFFO purposes, we adjust for unrealized gains and losses. For the three months ended March 31, 2026, the gain on derivative instruments was $3.1 million, which consisted of unrealized gains of $3.5 million and realized losses of $0.4 million. For the three months ended March 31, 2025, the loss on derivative instruments was $3.9 million, which consisted of unrealized losses of $3.3 million and realized losses of $0.6 million.
(2)This is a non-cash item and is added back as we do not consider it indicative of our normal operating performance.
(3) Represents adjustments to the fair value of the embedded derivative feature of the multi-tenant disposition receivable (see Note 3 — Multi-Tenant Retail Disposition to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information). We do not consider these adjustments to be indicative of our normal operating performance and have, accordingly, increased or (decreased) AFFO for these amounts.
Dividends
The amount of dividends payable to our common stockholders is determined by our Board and is dependent on a number of factors, including funds available for dividends, our financial condition, provisions in our Credit Agreement or other agreements that may restrict our ability to pay dividends, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to maintain our status as a REIT.
In February 2025 we announced that the Board had established a quarterly dividend per share of Common Stock of $0.190 per share, representing an annual dividend rate of $0.76 per share, and we currently intend to continue paying cash dividends consistent with this practice; however, our Board determines the amount and timing of any future dividend payments to our stockholders based on a variety of factors. Common Stock dividends authorized by our Board and declared by us are paid on a quarterly basis in arrears during the first month following the end of each fiscal quarter (unless otherwise specified) to common stockholders of record on the record date for such payment. Refer to Note 10 — Stockholders' Equity to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information on dividends to holders of our Common Stock.
Preferred Stock
Dividends accrue on our Preferred Stock as follows:
•Dividends on our Series A Preferred Stock accrue in an amount equal to $0.453125 per share per quarter to Series A
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Preferred Stockholders, which is equivalent to 7.25% of the $25.00 liquidation preference per share per annum.
•Dividends on our Series B Preferred Stock accrue in an amount equal to $0.4296875 per share per quarter to Series B Preferred Stockholders, which is equivalent to 6.875% of the $25.00 liquidation preference per share per annum.
•Dividends on our Series D Preferred Stock accrue in an amount equal to $0.46875 per share per quarter to Series D Preferred Stockholders, which is equivalent to the rate of 7.50% of the $25.00 liquidation preference per share per annum.
•Dividends on our Series E Preferred Stock accrue in an amount equal to $0.4609375 per share per quarter to Series E Preferred Stockholders, which is equivalent to the rate of 7.375% of the $25.00 liquidation preference per share per annum.
Dividends on the Series A Preferred Stock, Series B Preferred Stock, Series D Preferred Stock and Series E Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record on the close of business on the record date set by our Board. Any accrued and unpaid dividends payable with respect to the Series A Preferred Stock and Series B Preferred Stock become part of the liquidation preference thereof.
Pursuant to the Credit Agreement, we may not pay distributions, including cash dividends on, or redeem or repurchase Common Stock, Series A Preferred Stock, Series B Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, or any other class or series of stock we may issue in the future, that exceed 100% of our Adjusted FFO as defined in the Revolving Credit Facility (which is different from AFFO disclosed in this Quarterly Report on Form 10-Q) for any period of four consecutive fiscal quarters, except in limited circumstances, including that for one fiscal quarter in each calendar year, we may pay cash dividends and other distributions and redeem or repurchase an aggregate amount equal to no more than 105% of our Adjusted FFO. In addition, for so long as we maintain an investment grade rating from one or more of Moody’s, Standard & Poor’s or Fitch, the percentage limitation set forth above will not apply and we will be able to make distributions, including cash dividends, on our stock, subject to certain restrictions. We last used the exception to pay dividends that were between 100% of Adjusted FFO and 105% of Adjusted FFO during the quarter ended on June 30, 2020 under our revolving credit facility that was in place prior to entering into our current credit agreement in August 2025 (the “Prior Revolving Credit Facility”), which contained the same restriction on distributions, redemptions or repurchases of our capital stock and related exceptions therefrom, and may use this exception in the future under our Credit Agreement. In the past, the lenders under our Prior Revolving Credit Facility consented to increase the maximum amount of our Adjusted FFO we could use to pay cash dividends and other distributions and make redemptions and other repurchases in certain periods, but there can be no assurance that the lenders under our Revolving Credit Facility will provide such a consent in the future.
Foreign Currency Translation
Our reporting currency is the USD. The functional currency of our foreign investments is the applicable local currency for each foreign location in which we invest. Assets and liabilities in these foreign locations (including intercompany balances for which settlement is not anticipated in the foreseeable future) are translated at the spot rate in effect at the applicable reporting date. The amounts reported in the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income in the consolidated statements of changes in equity. We are exposed to fluctuations in foreign currency exchange rates on property investments in foreign countries which pay rental income, incur property related expenses and borrow in currencies other than our functional currency, the USD. We have used and may continue to use foreign currency derivatives including options, currency forward and cross currency swap agreements to manage our exposure to fluctuations in foreign GBP-USD and EUR-USD exchange rates (see Note 9 — Derivatives and Hedging Activities to the consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion).
Election as a REIT
We elected to be taxed as a REIT under Sections 856 through 860 of the Code, effective for our taxable year ended December 31, 2013. We believe that, commencing with such taxable year, we have been organized and have operated in a manner so that we qualify for taxation as a REIT under the Code. We intend to continue to operate in such a manner to qualify for taxation as a REIT, but can provide no assurances that we will operate in a manner so as to remain qualified as a REIT. To continue to qualify for taxation as a REIT, we must distribute annually at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard for the deduction for dividends paid and excluding net capital gains, and must comply with a number of other organizational and operational requirements. If we continue to qualify for taxation as a REIT, we generally will not be subject to federal corporate income tax on the portion of our REIT taxable income that we distribute to our stockholders. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and properties, as well as federal income and excise taxes on our undistributed income.
In addition, our international assets and operations, including those owned through direct or indirect subsidiaries that are disregarded entities for U.S. federal income tax purposes, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted.
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Inflation
We may be adversely impacted by inflation on the leases that do not contain indexed escalation provisions, or those leases which have escalations at rates which do not exceed or approximate current inflation rates. As of March 31, 2026, the increase to the 12-month CPI for all items, as published by the Bureau of Labor Statistics, was 3.3%. To help mitigate the adverse impact of inflation, approximately 87% of our leases with our tenants contain rent escalation provisions that increase the cash rent that is due under these leases over time by an average cumulative increase of approximately 1.5% per year. These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on the Consumer Price Index or other measures). As of March 31, 2026, based on straight-line rent, approximately 62.3%, are fixed-rate with increases averaging 1.7%, 20.1% are based on the Consumer Price Index, subject to certain caps, 4.3% are based on other measures, and 13.3% do not contain any escalation provisions.
In addition, we may be required to pay costs for maintenance and operation of properties which may adversely impact our results of operations due to potential increases in costs and operating expenses resulting from inflation. However, our net leases require the tenant to pay its allocable share of operating expenses, which may include common area maintenance costs, real estate taxes and insurance. This may reduce our exposure to increases in costs and operating expenses resulting from inflation. As the costs of general goods and services continue to rise, we may be adversely impacted by increases in general and administrative costs due to overall inflation.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There has been no material change in our exposure to market risk during the three months ended March 31, 2026. For a discussion of our exposure to market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q and our Chief Executive Officer and Chief Financial Officer determined that our disclosure controls and procedures are effective.
Changes in Internal Control Over Financial Reporting
During the quarter ended March 31, 2026, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
Please refer to “Litigation and Regulatory Matters” in Part I - Item 1 - Note 11 — Commitments and Contingencies, in our accompanying Consolidated Financial Statements.
Item 1A. Risk Factors.
You should carefully consider the risks described below and those risks described in “Item 1A, Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2025, as our business, financial condition and results of operations could be adversely affected by any of the risks and uncertainties described therein and herein.
Risks Related to the Proposed Mergers
The announcement and pendency of the Mergers may have an adverse effect on our business, operating results and price of our common stock.
We are subject to risks in connection with the announcement and pendency of the Mergers, including, but not limited to, the following:
•Market reaction to the announcement and pendency of the Mergers;
•Changes in our business, operating results, market price of our common stock and prospects generally;
•Market assessments of the likelihood that the Mergers will be consummated;
•The amount of consideration offered per share is based on a fixed exchange ratio, and will not be adjusted to account for changes in our or Modiv’s respective business, assets, liabilities, prospects, outlook, financial condition or results of operations, or any other changes, during the pendency of the Mergers, including any change in the market price of, analyst estimates of, or projections relating to, our common stock or Modiv’s common stock;
•Potential adverse effects on our relationships with our current clients, suppliers and other business partners, or those with which we are seeking to establish business relationships, due to uncertainties about the Mergers;
•We have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the Mergers, and many of these fees and costs are payable by us regardless of whether the Mergers is consummated;
•We may incur unexpected costs, liabilities or delays in connection with or with respect to the Mergers;
•Potential adverse effects to our ability to raise capital during the pendency of the Mergers, or the impact of the Mergers on our or Modiv’s existing or future indebtedness, or our ability to assume such indebtedness on favorable terms, or at all;
•Potential adverse effects on our ability to attract, recruit, retain and motivate current and prospective employees who may be uncertain about their future roles and relationships with us following the completion of the Mergers, and the possibility that our employees could lose productivity as a result of uncertainty regarding their employment following the Mergers;
•The pendency and outcome of any legal proceedings that may be instituted against us, our directors, executive officers and others relating to the transactions contemplated by the Merger Agreement;
•The inherent risks, costs and uncertainties associated with integrating the operations successfully and risks of not achieving all or any of the anticipated benefits of the Mergers, or the risk that the anticipated benefits of the Mergers may not be fully realized or take longer to realize than expected;
•Competitive pressures in the markets in which we and Modiv operate;
•Potential restrictions on the conduct of our business prior to the completion of the Mergers pursuant to the terms of the Merger Agreement;
•The inability for our stockholders to realize the anticipated benefits of the Mergers;
•The occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; and
•The possibility of disruption to our business, including increased costs and diversion of management time and resources that could otherwise have been devoted to other opportunities that may have been beneficial to us.
Any of these risks could adversely affect our results of operations, financial condition and business prospects.
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The Mergers may not be completed on the terms or timeline currently contemplated, or at all. Closing of the Mergers is subject to many conditions and if these conditions are not satisfied or waived, the Mergers will not be completed, which could adversely affect our business and results of operations.
The closing of the Mergers is subject to customary closing conditions, including, among other things, (1) the affirmative vote of the holders of a majority of the outstanding shares of GNL Common Stock entitled to vote on the Mergers, (2) the absence of any law, injunction, judgment, order or ruling prohibiting the Mergers, (3) the accuracy of the representations and warranties made by the parties (subject to customary materiality and other qualifications), (4) the performance by the parties in all material respects of their covenants, obligations and agreements under the Merger Agreement, (5) the delivery of tax opinions related to each of the Company’s and GNL’s status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”), (6) the delivery of tax opinions that the Mergers will qualify as a reorganization within the meaning of Section 368(a) of the Code and (7) the absence of a material adverse effect on the Company Parties or the GNL Parties prior to the closing. The consummation of the Mergers is not subject to any financing condition and does not require the approval of GNL’s stockholders.
We cannot provide assurance that these conditions to completing the Mergers will be satisfied or waived, and accordingly, that the Mergers will be completed on the terms or timeline that the parties anticipate, or at all. We or Modiv may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the Mergers are not consummated by February 3, 2027.
Failure to consummate the Mergers may adversely affect our results of operations, financial condition and business prospects for many reasons, including, among others: (i) we will have incurred substantial costs relating to the Mergers, such as legal, accounting, financial advisor, filing, printing and mailing fees and integration costs that have already been incurred or will continue to be incurred until the closing of the Mergers, which could adversely affect our financial conditions, results of operations and ability to make distributions to our stockholders and to pay the principal of and interest on our debt securities and other outstanding indebtedness; (ii) the Mergers, whether or not they close, will divert the attention of our management instead of enabling it to more fully pursue other opportunities that could be beneficial to us, without realizing any of the benefits of having completed the Mergers or the other transactions contemplated by the Merger Agreement; and (iii) any reputational harm due to the adverse perception of any failure to successfully complete the Mergers. In addition, if the Merger Agreement is terminated under certain circumstances specified therein, we may be required to pay Modiv a $15.0 million termination fee.
Our common stockholders will be diluted by the Mergers, if consummated.
The Mergers will dilute the ownership position of our common stockholders. Additionally, upon the closing of the Mergers, we expect to issue 4,914,532 OpCo Merger Consideration OP Units, which, in certain circumstances, can be redeemed for our common stock per the OP Agreement. Consequently, our common stockholders, as a general matter, will have less voting control and influence over our management and policies after the effective time of the Mergers than they currently exercise over our management and policies.
Potential litigation instituted against us, Modiv or our respective directors challenging the proposed Merger may prevent the Mergers from becoming effective within the expected timeframe or at all.
Potential litigation related to the Mergers may result in injunctive or other relief prohibiting, delaying or otherwise adversely affecting the parties’ ability to complete the Mergers. Such relief may prevent the Mergers from becoming effective within the expected timeframe or at all. In addition, defending against such claims may be expensive and divert management’s attention and resources, which could adversely affect the respective businesses of us and Modiv.
We expect to incur substantial expenses related to the Mergers and the transactions contemplated by the Merger Agreement.
We expect to incur substantial expenses in consummating the Mergers and integrating the business and operations of Modiv with ours. There are a large number of systems that must be integrated, separated or terminated in connection with the Mergers, and the other transactions contemplated by the Merger Agreement, including leasing, billing, management information, purchasing, accounting and finance, sales, payroll and benefits, fixed asset, lease administration and regulatory compliance. While we have assumed that a certain level of transaction, integration and termination expenses would be incurred, there are a number of factors beyond our control that could affect the total amount or the timing of the expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. The expenses in connection with the Mergers and the transactions contemplated by the Merger Agreement are expected to be significant, although the aggregate amount and timing of such charges are uncertain.
Following the Mergers, if consummated, we may be unable to integrate the business of Modiv successfully or realize the anticipated synergies and related benefits of the Mergers and the transactions contemplated by the Merger Agreement or do so within the anticipated time frame.
The Mergers involves the combination of two companies which currently operate as independent public companies. We will be required to devote significant management attention and resources to integrating their business practices and operations. Potential difficulties we may encounter in the integration process include the following:
•the inability to successfully combine Modiv’s business and operations with ours in a manner that permits the combined company to achieve the cost savings anticipated to result from the Mergers, which would result in some anticipated benefits of the Mergers not being realized in the time frame anticipated or at all;
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•loss of revenue as a result of certain clients of either of us or Modiv deciding not to do business with the combined company;
•the complexities of combining two companies;
•the failure to retain key employees;
•potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Mergers and the transactions contemplated by the Merger Agreement; and
•performance shortfalls as a result of the diversion of management’s attention caused by consummating the Mergers and integrating Modiv’s operations with ours.
For all these reasons, you should be aware that it is possible that the integration process could result in the distraction of our management, the disruption of our ongoing business or inconsistencies in our services, standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, vendors, joint venture partners and employees or to achieve the anticipated benefits of the Mergers, or could otherwise adversely affect our business and financial results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table presents our Common Stock share repurchase activity for the quarter ended March 31, 2026 (dollars in thousands, except per share amounts):
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||||||||||||||
| (In Thousands) | ||||||||||||||||||||||||||
| January 1, 2026 to January 31, 2026 | 1,807,714 | $ | 8.80 | 1,807,714 | $ | 164,140 | ||||||||||||||||||||
| February 1, 2026 to February 28, 2026 | — | — | — | 164,140 | ||||||||||||||||||||||
| March 1, 2026 to March 31, 2026 | 2,410,647 | 9.28 | 2,410,647 | 141,771 | ||||||||||||||||||||||
| Total | 4,218,361 | $ | 9.07 | 4,218,361 | 141,771 | |||||||||||||||||||||
(1) All of the above repurchases were made on the open market at prevailing market rates plus related expenses under our Share Repurchase Program, which authorized the repurchase of up to $300.0 million of our outstanding Common Stock. We publicly announced this program on February 26, 2025.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During our last fiscal quarter, no director or officer, as defined in Rule 16a-1(f), adopted terminated
Item 6. Exhibits.
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (and are numbered in accordance with Item 601 of Regulation S-K).
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| Exhibit No. | Description | |||||||
2.1 | Agreement and Plan of Merger, dated May 3, 2026, by and among Global Net Lease, Inc., Global Net Lease Operating Partnership, L.P., Modiv Industrial, Inc., Modiv Operating Partnership, LP and the other parties thereto (incorporated by reference to Exhibit 2.1 to the Form 8-K, filed by Global Net Lease, Inc. on May 4, 2026). | |||||||
31.1 * | Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
31.2 * | Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
32 * | Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS * | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH * | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL * | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF * | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB * | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE * | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104 * | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
_________
*Filed or furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Global Net Lease, Inc. | ||||||||
| By: | /s/ Edward M. Weil, Jr. | |||||||
| Edward M. Weil, Jr. | ||||||||
| Chief Executive Officer and President | ||||||||
| By: | /s/ Christopher J. Masterson | |||||||
| Christopher J. Masterson | ||||||||
| Chief Financial Officer, Treasurer, and Secretary (Principal Financial Officer and Principal Accounting Officer) | ||||||||
Dated: May 6, 2026
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FAQ
How did Global Net Lease (GNL) perform financially in the quarter ended March 31, 2026?
Global Net Lease posted a much smaller net loss of $5.1 million, compared with $189.4 million a year earlier. The improvement came mainly from lower impairment charges, reduced depreciation and amortization, and a shift to income from discontinued operations after the large prior-year retail portfolio sale.
What happened to Global Net Lease (GNL) revenue and expenses in Q1 2026?
Revenue from tenants decreased to $109.3 million from $132.4 million, reflecting portfolio changes. Total expenses dropped to $86.2 million from $158.6 million as impairment charges fell to $11.1 million and depreciation and amortization declined, helping swing operating results to a profit.
What is the status of Global Net Lease (GNL) after the Multi-Tenant Retail Disposition?
Global Net Lease completed the $1.780 billion Multi-Tenant Retail Disposition in 2025, selling 100 properties. In Q1 2026, discontinued operations produced income of $3.3 million, including a $0.7 million gain on sale and gains from an embedded derivative linked to a $22.0 million disposition receivable.
What does Global Net Lease’s (GNL) balance sheet look like as of March 31, 2026?
As of March 31, 2026, Global Net Lease reported total assets of $4.15 billion, total liabilities of $2.59 billion and stockholders’ equity of $1.56 billion. Real estate investments, net, were $3.71 billion, and cash, cash equivalents and restricted cash totaled $137.5 million.
How leveraged is Global Net Lease (GNL) and what are its main debt obligations?
Global Net Lease had gross mortgage notes payable of $1.27 billion, senior notes with $1.0 billion aggregate principal, and $290.0 million outstanding on its multi-currency Revolving Credit Facility. Most borrowings are fixed-rate or hedged, and the company reported compliance with related covenants as of March 31, 2026.
What cash flows did Global Net Lease (GNL) generate in Q1 2026?
Global Net Lease generated $39.7 million in net cash from operating activities and $70.0 million from investing, mainly from property sales and disposition receivable collections. Financing activities used $165.2 million, reflecting debt repayments, common and preferred dividends, and $38.4 million of common share repurchases.
How large and occupied is Global Net Lease’s (GNL) property portfolio?
As of March 31, 2026, Global Net Lease owned 809 properties totaling 40.3 million rentable square feet, with 97% of the space leased. The portfolio was 47% Industrial & Distribution, 27% Retail and 26% Office by annualized straight-line rent, primarily across the U.S., Canada and Europe.