Global Net Lease: A Bullish Thesis with Transformation and Capital Return Opportunities

Global Net Lease (GNL) is undergoing a transformation from a poorly structured externally managed REIT to a traditional net lease peer. The company has deleveraged and rationalized its portfolio, completing nearly $3 billion of dispositions and reducing leverage from 8.3x to 6.5x. GNL trades at 7.4x FY25E AFFO, a significant discount to peers, and has authorized a $300 million buyback program. Management's FY25 guidance underestimates run-rate savings, with FY26 AFFO likely to exceed $1.00. The stock underwrites to a 25% three-year IRR at a conservative 10x multiple.

Global Net Lease (GNL) is undergoing a notable transformation, shifting from a poorly structured externally managed REIT to a traditional net lease peer. The company has been proactive in deleveraging and rationalizing its portfolio, completing nearly $3 billion in dispositions and reducing leverage from 8.3x to 6.5x These 6%- to 13%-Paying Landlords Love Jerome Powell Right Now^[1]. This strategic move positions GNL to resemble a more attractive investment, with a significant discount to peers, trading at 7.4x FY25E AFFO.

The transformation has not gone unnoticed by investors. GNL has authorized a $300 million buyback program, already repurchasing $50 million in Q1 2025, and is expected to generate ~$70 million of excess cash flow next year Global Net Lease, Inc. (GNL): A Bull Case Theory^[2]. This indicates a strong commitment to shareholder value and provides a significant opportunity for capital return.

Management's FY25 guidance underestimates run-rate savings, with FY26 AFFO likely to exceed $1.00, suggesting that the company is poised for further growth. Even on conservative estimates, the stock underwrites to a 25% three-year IRR at a 10x multiple Global Net Lease, Inc. (GNL): A Bull Case Theory^[2].

Despite the positive outlook, lingering concerns about office exposure and past governance issues persist. However, GNL's well-covered 11% dividend and strong investment-grade tenancy exposure position it favorably in the market. The company's transformation has simplified its business model, reducing complexity and improving portfolio quality.

GNL's stock price has appreciated since the transformation, reflecting investors' confidence in the company's strategic direction. With further deleveraging, continued buybacks, and the market's recognition of GNL as a pure-play net lease REIT, the company is well-positioned for continued growth. An outright sale remains a credible outcome if the valuation gap persists, offering multiple paths for investors to realize upside.