Global Net Lease, Inc.

Good morning and welcome to the Global Net Lease fourth 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 touchtone phone. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Louisa Corto. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for G&L's fourth quarter and year-end 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 Masterson, GNL'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 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. Throughout today's call, we will use the term implied investment grade with respect to tenants. Please refer to our earnings release for more information about what we consider to be implied investment grade. 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, G&L 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 supplements. both of which are posted to our website at www.globalnetlease.com. I'll now turn the call over to our CEO, Jim Nelson. Jim?

Thank you, Louisa, and thanks again to everyone for joining us on today's call. I am extremely proud of how G&L has performed throughout a year of unprecedented change and dislocation in the market. Our resilience through the last year is a testament to the strength of our strategy, including the deliberate construction of our portfolio our focus on mission critical industrial distribution or office properties and the execution of our prudent strategy in prior years to reduce our exposure to other asset classes such as retail. From this solid base, we launched our inaugural unsecured notes offering in the fourth quarter. The notes received an investment grade rating from S&P of BBB minus and a rating from Fitch of BBB plus. We continue to acquire high quality accretive assets, and build momentum headed into 2021. This morning, Chris and I will briefly discuss all of these initiatives, as well as our fourth quarter and full 2020 results, before taking your questions. Our best-in-class $4.3 billion portfolio consists of 306 properties in the United States, Canada, the UK, and Europe that are diversified across 130 tenants and 48 separate industries. Our property mix is currently 49% industrial and distribution, 46% office, and 5% retail. Portfolio occupancy at the end of the year was 99.7%, with a weighted average remaining lease term of 8.5 years as of December 31, 2020. 67% of our annualized straight-line rent is derived from investment-grade or implied investment-grade tenants. Compared to our peers, our occupancy is unmatched and the weighted average remaining lease term in the portfolio is among the best in the sector. We also believe the credit quality of our tenants compares favorably to our peers. With no near-term expirations and with embedded contractual rent growth in 94% of leases, we believe our diversified portfolio remains stable and well-positioned to create value over the long term for our shareholders. Rent collection for G&L remained at or above 97% in the second, third, and fourth quarters of 2020. Because of the strategic importance of many of our assets, our tenants' credit quality, our proactive approach to collection, and our strong relationships with our tenants. In the fourth quarter, we collected 99% of the cash rent due across our portfolio, including 99% in the UK and 100% in the rest of Europe. We collected 100% of the cash rent due from our top 20 tenants, representing almost half of our annual cash rent. I want to be clear that all rent collection percentages we discuss are calculated based on the original rent we would have expected to receive before COVID started, and they're not adjusted for negotiated deferrals or other amendments. We are very pleased with the acquisitions we made during the year, all of which were industrial distribution and mission-critical office assets. In total, we closed on over $460 million of acquisitions. The weighted average cap rate for these acquisitions was 7.9%, with a weighted average remaining lease term of 14.5 years at closing. The fourth quarter was particularly active as we closed $292.8 million of transactions that will eventually contribute over $21 million of annualized straight-line rent to our portfolio. Many of these acquisitions closed in late December and as a result did not meaningfully contribute to our fourth quarter or full year results. One of the largest acquisitions in the fourth quarter was a four-property U.S. industrial portfolio, including three properties leased to DSD Output, LLC, a wholly-owned subsidiary of Broadridge Financial Solutions, Inc. The property is leased to SKF USA, a wholly-owned subsidiary of ABSKF, the world's largest bearing manufacturer and distributor. The 1.3 million square foot portfolio is geographically diversified with properties in California, Missouri, New York, and Connecticut, and features three mission critical production facilities and a state-of-the-art manufacturing facility. The in-place net leases have 1.8% average annual rent escalations and a weighted average remaining lease term of 9.1 years. In addition to acquisitions, We were also active signing strategic lease extensions in 2020 in Helsinki. We signed an early lease extension on two leases with our implied investment grade tenants, Finnair, the flag carrier and largest airline in Finland and majority owned by the Finnish government. We extended the lease term by 6.4 years for over 650,000 square feet, representing 1.8% of our portfolio closer to home. in Germantown, PA, we signed a long-term lease extension with the GSA, which is backed by the full faith and credit of the US government. This lease is for almost 15,000 square feet and it would extended by 8.3 years. In total, we negotiated and completed 12 such extensions for over 1.6 million square feet or 4.3% of our portfolio. These extensions collectively increased the weighted average remaining lease term at these properties to 10.8 years from 4.7 years. These extensions also reduced the concentration of leases scheduled to expire in 2024 from 17% to 12%. And we had no lease expirations in 2020 that were not renewed. Addressing lease expirations three years in advance is part of our aggressive and proactive approach to asset management. From our tenant's perspective, signing early and long-term lease extensions signals the mission-critical nature of these properties and our tenants' commitment to remaining in their space long-term. The result of all these efforts produced year-over-year growth in adjusted EBITDA, total revenue, NOI, and dividend coverage. Adjusted EBITDA increased by 6% year-over-year to $248.7 million in 2020 compared to $234.5 million in 2019. Total revenue for the year rose 7.8% to $330.1 million from $306.2 million in the prior year. Net operating income also grew 7.1% to $297.7 million from $277.9 million in 2019. In the fourth quarter, we completed a $500 million senior unsecured note offering. The notes have an effective interest rate of 3.75%. and mature on December 15, 2027. Standard & Poor's Rating Services issued an investment-grade rating of BBB- on the notes, and Fitch Ratings rated the notes BB+. GNL also received a corporate credit rating of BB- from both S&P and Fitch. The notes were well-received by the market, and we were pleased with the demand for the offering. The rate achieved during a period of historically low interest rates and the credit ratings both on the notes and on the companies. We believe that the success of the transaction is a testament to our hard work to enhance G&L's primarily investment-grade portfolio over the past several years, robust rent collection throughout the pandemic, and disciplined acquisition focus. The notes allowed us to repay in full our outstanding borrowings under our revolving credit facility, pay off $88 million of secured debt, and partially repay our term loan, all while adding new long-dated debt the seven-year notes also increased our weighted average debt maturity to 5.4 years as of the end of the year. By strengthening and diversifying our balance sheet and obtaining corporate-level credit ratings, we are laying the foundation for GNL's continued growth and ability to issue unsecured notes on attractive terms in the future. We remain committed to executing on our global investment strategy by leveraging our unique capacity to acquire assets throughout Europe and North America, Last year was a testament to the effectiveness of our strategy. We believe we will build on the substantial momentum we're carrying into 2021. We expect that momentum to dovetail with continued improvement in global economic conditions and ultimately drive a very successful year. We believe we remain well positioned to take advantage of evolving real estate markets and benefit from the added diversification that comes with holding a balanced portfolio of global assets located in numerous economic regions. We believe our demonstrated ability to underwrite transactions with an eye toward long-term value is what continues to set G&L apart in the net lease sector. We will continue to execute on our strategy in 2021 and beyond as we grow G&L's global and diversified portfolio. I'll turn the call over to Chris to walk through the operating results in more detail, and then I will follow up with some closing remarks. Chris?