Global Net Lease, Inc.

Good day and welcome to the Global Net Lease Inc. Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. And I'd now like to turn the conference over to Luis Acuarto. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining us for G&L's second quarter 2020 earnings call. This call is being webcast in the investor relations section of G&L's website at www.globalnetlease.com. Joining me today on the call to discuss the quarter's results are Jim Nelson, G&L's Chief Executive Officer, and Chris Matterson, G&L's Chief Financial Officer. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. We refer all of you to our SEC filings, including the Form 10-K for the year ended December 31, 2019, filed on February 28, 2020, and all other filings with the SEC after that date, for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this conference call are only made as of the date of this call. As stated in our SEC filings, GNL disclaims any intent or obligation to update or revise these forward-looking statements except as required by law. Also, during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release and supplement, which are posted to our website at www.globalnetlease.com. Please also refer to our earnings release for more information about what we consider to be implied investment grade tenants, a term we will use throughout today's call. I'll now turn the call over to our CEO, Jim Nelson. Jim?

Thank you, Louisa. Good morning, everyone, and thanks again for joining us on today's call. I think it's safe to say that the second quarter was unlike any quarter I've experienced in my long career. Despite the challenges that COVID has presented, I am proud of our solid performance. For the quarter, we collected over 98% of cash rents that were payable, including 99% of the cash rent payable from our top 20 tenants. We attribute this excellent collection rate in large part to our historic emphasis on credit quality, underwriting, and due diligence, and to the relationships that we have built with our tenants over the years. On a geographic basis, G&L collected 99% of the cash rent payable from our UK-based assets, 100% from our other European tenants, and 96% from our US-based assets. While we have been successful in collecting rent throughout the COVID crisis, I am equally excited about our achievements on other fronts over the same time. We negotiated and closed on two significant financing transactions during the second quarter and in early July, as we completed the last step in the refinancing of all of our European debt with a 70 million euro loan in France, which was fixed via a swap agreement at the excellent interest rate of 2.5%. We also closed on 88 million of loans at an excellent interest rate of 3.45%, collateralized by our Whirlpool Corporation assets located in the U.S. We completed eight new acquisitions, all in the U.S., and all industrial or office properties, for an aggregate total of 31 million, bringing our total year-to-date acquisitions to almost 145 million. The second quarter acquisitions had an average remaining lease term of 18.1 years and were acquired at a weighted average cap rate of 8.45%. We remain actively engaged in the acquisition marketplace and continue to evaluate opportunities. Since the onset of COVID, the overall deal flow has softened, and although as a buyer we have adjusted our cap rate targets from historical precedents, In many cases, current sellers have not yet made similar changes to their pricing expectations. We believe that over time we will see bids and asks converge to establish a new, potentially more attractive normal. Our $3.9 billion, 296 property portfolio is nearly fully occupied at 99.6% leased, with a weighted average remaining lease term of 8.9 years, up from eight years a year ago. We have no 2020 lease expirations, and contractual rent growth is embedded in over 93% of our leases. 231 of our properties are in the U.S. and Canada, and 65 are in the U.K. and Western Europe, representing 65% and 35% of annualized rent revenue, respectively. Our property mix continues to evolve and is currently 48% office, 47% industrial and distribution, and 5% retail. compared to 53% office, 41% industrial and distribution, and 6% retail a year ago. Contributing to our success is our focus on tenant credit, industrial acquisitions, and retail dispositions over the last several years. Across the portfolio, 65% of straight line rent comes from investment grade or implied investment grade tenants. Industrial and distribution assets have been an increasingly significant segment of our portfolio. growing by nearly 15% year over year to make up 47% of our current assets when measured by straight line rent. This shift was particularly fortuitous in advance of the COVID-19 pandemic, where industrial and distribution businesses in the U.S. and Europe were among the least affected and some of the first employers to bring employees back to work. Our industrial acquisitions have included the sale leaseback transactions we completed with Whirlpool Corporation in the U.S. and Italy, as well as other industrial acquisitions totaling over $87 million year-to-date. These properties are leased to tenants such as CSTK, Metal Technologies, Klausner Industrial, and NSA. Other significant tenants in this segment include Finnair, Ocean, and Grupo Antolin. Though we are always seeking accretive acquisitions that meet our investment criteria, Our focus has been and will continue to be on industrial and distribution assets, along with opportunistic acquisitions of single-tenant, mission-critical office properties leased to investment-grade tenants similar to those that currently populate the office segment of our portfolio. Turning to our financial highlights, our portfolio produced year-over-year increases in revenue from tenants and net operating income. Total revenue was up 6.6% to $81.1 million in and net operating income grew 6.1% to $73.3 million from $69.1 million in the second quarter 2019 and 2% from $71.9 million the previous quarter. On a per-share basis, AFFO decreased year-over-year to $0.44 per share. The company distributed $35.8 million in common dividends to shareholders. AFFO was $39.8 million. With that, I'll turn the call over to Chris to walk through the operating results in more detail before I follow up with some closing remarks. Chris?