In a move that would position the company as a pure-play, single-tenant net lease company, Global Net Lease Inc. (GNL) has entered into a binding agreement to sell its multi-tenant portfolio of 100 non-core properties to a subsidiary of RCG Ventures Holdings LLC for approximately $1.8 billion at an 8.4% cash cap rate.
GNL launched its strategic disposition initiative in 2024, with the objectives of significantly reducing debt, enhancing financial flexibility and lowering its cost of capital. Following the completion of the multi-tenant portfolio sale — which would represent the most significant step in this initiative to date — GNL expects to have completed by the end of 2025 nearly $3 billion in dispositions since the start of 2024, inclusive of properties in its disposition pipeline.
GNL expects to use the net proceeds from the multi-tenant portfolio sale to significantly reduce the outstanding balance on GNL’s revolving credit facility.
“We believe the proposed sale of our multi-tenant portfolio is a strategic and prudent transaction that will bolster our balance sheet and position GNL for continued success,” said Michael Weil, CEO of GNL. “The proposed transaction greatly decreases operational complexities, G&A expenses and capital expenditures associated with multi-tenant retail properties. The announcement marks a pivotal milestone in our strategic disposition initiative, offering a range of benefits with a clear emphasis on long-term value. The transaction reflects a disciplined and measured approach to accelerating debt reduction.”
The transaction is expected to positively impact GNL’s key portfolio metrics by boosting occupancy to 98%, extending weighted average remaining lease term to 6.4 years, increasing the proportion of investment-grade tenants to 66% and enhancing annual rent escalations to 89%.
It is expected to close in three phases: the unencumbered portfolio is scheduled to close by the end of Q1 2025, while the encumbered portfolio is set to close in two stages by the end of Q2 2025, pending approval of the respective loan assumptions and other customary closing conditions.
BofA Securities is serving as GNL’s exclusive financial advisor for the multi-tenant portfolio sale, and BMO Capital Markets is also acting as an advisor to the company. Paul, Weiss, Rifkind, Wharton & Garrison LLP is providing legal counsel to the company.
Truist Securities Inc. served as a financial advisor to RCG Ventures and provided committed financing for the transaction. McGuireWoods LLP is providing legal counsel to RCG Ventures in respect of real estate acquisition and financing matters and King & Spalding LLP is providing legal counsel to RCG Ventures in respect of fund formation and transaction-related matters. Gibson Avenue Capital LLC is also serving as an advisor to RCG Ventures.
