Q2 2024 Global Net Lease Inc Earnings Call

Unknown Executive: Greetings, welcome to the Global Net Lease second quarter 2024 earnings call. This time, I'll dispense with her in listen-only mode.

Greetings and welcome to the global net lease second quarter 2024 earnings call.

Operator: Welcome to the Global Net Lease 2nd Quarter, 2024 Earnings Fall. This time, if distance are in listen-only mode, the question and answer session, we'll follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero on your telephone keypad.

Speaker Change: At this time, all participants are in listen only mode a.

Unknown Executive: The question and answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. At this time, I'll turn the conference over to Jordyn Schoenfeld.

Speaker Change: A question and answer session will follow the formal presentation.

Speaker Change: If anyone today should require operator assistance during the conference. Please press star zero on your telephone keypad.

Operator: Please note, this conference is being recorded.

Speaker Change: Please note this conference is being recorded.

Jordyn Schoenfeld: At this time, I'll turn the conference over to Jordyn Schoenfeld. Jordyn, you may now begin.

Speaker Change: At this time I'll turn the conference over to Jordan Schoenfeldt Jordan you May now begin.

Jordyn Schoenfeld: Thank you. Good morning, everyone, and thank you for joining us for G&L 2nd quarter of 2024 earnings call. Joining me today on the call is Michael Weil, G&L's Chief Executive Officer, and Chris Masterson, G&L's Chief Financial Officer.

Jordyn Schoenfeld: Thank you. Good morning, everyone, and thank you for joining us for G&L's second quarter 2024 earnings call. Joining me today on the call is Michael Weil, G&L's Chief Executive Officer, and Chris Masterson, G&L's Chief Financial Officer. The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please review the forward-looking and cautionary statements section at the end of our second quarter 2024 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today.

Jordan Schoenfeldt: Thank you good morning, everyone and thank you for joining us for Gnl's second quarter 2024 earnings call. Joining me today on the call is Michael while Gnl's, Chief Executive Officer, and Chris Masterson, Gnl's Chief Financial Officer.

Unknown Executive: The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please review the forward-looking and cautionary statement section at the end of our 2nd quarter, 2024 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today. 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.

Jordan Schoenfeldt: The following information contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095. Please.

Jordan Schoenfeldt: Please review the forward looking and cautionary statements section at the end of our second quarter 2024 earnings release for various factors that could cause actual results to differ materially from forward looking statements made during our call today.

Jordyn Schoenfeld: 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 certain non-GAAP financial measures which we believe can be useful in evaluating the company's financial performance. Descriptions of those non-GAAP financial measures that we use, such as AFFO and net debt to adjusted EBITDA, and reconciliations of these measures to our results as reported in accordance with GAAP are detailed in our earnings release and in our quarterly report on Form 10-Q for the second quarter of 2024. I will now turn the call over to our CEO, Michael Weil. Thank you.

Jordan Schoenfeldt: As stated in our SEC filings GNL disclaims any intent or obligation to update or.

Jordan Schoenfeldt: To revise these forward looking statements, except as required by law.

Unknown Executive: Also, during today's call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. Description of those non-GAAP financial measures that we use, such as AFFO and net debt, to adjust the EBITDA and reconciliation of these measures to our result as reported in accordance with GAAP, are detailed in our earnings release and in our quarterly report on Form 10-Q for the 2nd quarter, 2024.

Jordan Schoenfeldt: Also during today's call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance description of those non-GAAP financial measures that we use such as <unk> and net debt to adjusted EBITDA and reconciliations of these measures to our results as reported in the core.

Jordan Schoenfeldt: With gap are detailed in our earnings release and in our quarterly report on Form 10-Q for the second quarter 2024, I will now turn the call over to our CEO, Michael while Mike.

Jordyn Schoenfeld: I'll now turn the call over to our CEO, Michael Weil. Mike?

Michael Weil: Thanks, Jordyn. Good morning, and thank you all for joining us today. At the beginning of 2024, G&L initiated a comprehensive business plan with clear financial objectives. We're currently on track to achieve or exceed these objectives following another successful quarter marked by increased guidance for our strategic disposition initiative, further leverage reduction, efficient balance sheet execution, AFFO per share growth, strong leasing momentum, and continued synergies and internalization-related savings. At the start of 2024, GNL implemented an asset disposition program and provided guidance of $400 million to $600 million in total sale proceeds from dispositions to be used for debt paydown, with a cash cap rate between 7% and 8% on occupied assets.

Michael Weil: Thanks, Jordan.

Michael: Thanks, Jordan good morning, and thank you all for joining us today.

Michael Weil: Good morning, and thank you all for joining us today. At the beginning of 2024, G&L initiated a comprehensive business plan with clear financial objectives. We're currently on track to achieve or exceed these objectives following another successful quarter marked by increased guidance of our strategic disposition initiative, further leverage reduction, efficient balance sheet execution, AFFO per share growth, strong leasing momentum, and continued synergies and internalization-related savings. At the start of 2024, G&L implemented an asset disposition program and provided guidance of $400 million to $600 million in total sale proceeds from dispositions to be used for debt paydown, with a cash cap rate between 7% and 8% on occupied assets.

Michael: At the beginning of 2020 for GNL initiated a comprehensive business plan with clear financial objectives. We're currently on track to achieve or exceed these objectives. Following another successful quarter marked by increased guidance of our strategic disposition initiative further leverage reduction efficient balance sheet execution.

Michael: <unk> per share growth strong leasing momentum and continued synergies and internalization related savings.

Michael: At the start of 2020 for GNL implemented an asset disposition program and provided guidance of $400 million to $600 million in total sale proceeds from dispositions to be used for debt paydown with our cash cap rate between 7% and 8% on occupied assets.

Michael Weil: The primary objectives are to reduce our net debt to adjust the EBITDA, lower our cost of capital, and align our leverage with industry peers. We're excited about the significant progress we have achieved to date. As of August 1st, total transactions, including our closed dispositions plus pipeline, total $728 million at a cash cap rate of 7.3% on occupied assets, with a weighted average remaining lease term of 5.3 years. This includes $371 million from successfully closed dispositions at a cash cap rate of 7.4% on occupied assets. $227 million in dispositions currently under PFA at a cash cap rate of 6.7% on occupied assets, and $130 million in dispositions with executed LOIs at a cash cap rate of 7.7% on occupied assets.

Michael Weil: The primary objectives are to reduce our net debt to adjust to DBDA, lower our cost of capital, and align our leverage with industry peers. We're excited about the significant progress we have achieved to date. As of August 1st, total transactions, including our closed dispositions plus pipeline, total $728 million at a cash cap rate of 7.3% on occupied assets, with a weighted average remaining lease term of 5.3 years. This includes $371 million from successfully closed dispositions at a cash cap rate of 7.4% on occupied assets. $227 million in dispositions currently under PSA at a cash cap rate of 6.7% on occupied assets and $130 million in dispositions with executed LOIs at a cash cap rate of 7.7% on occupied assets.

Michael: The primary objectives are to reduce our net debt to adjusted EBITDA, lower our cost of capital and align our leverage with industry peers.

Michael: We're excited about the significant progress we have achieved to date as of August 1st total transactions, including our closed dispositions plus pipeline totaled $728 million at a cash cap rate of seven 3% on occupied assets with a weighted average remaining lease term of five three years.

Michael: This includes $371 million from successfully closed dispositions at a cash cap rate of seven 4% occupied assets to.

Michael: $227 million in dispositions currently under PSA at a cash cap rate of six 7% occupied assets and $130 million in dispositions with executed LOI at a cash cap rate of seven 7% occupied assets.

Michael Weil: As a result of the robust pipeline, we have built in the early stages of our strategic disposition effort. We have raised our guidance for the disposition initiative to $650 million to $800 million of closed transactions in 2024 within our state at 7-8% cash cap rate. We believe the 7.3% cash cap rate achieved on the occupied dispositions demonstrates the value of our primarily investment grade portfolio, representing a significant premium compared to GNL's current implied cap rate. We remain committed to reducing leverage into 2025, and we plan to disclose additional information on incremental dispositions as part of our 2025 business plan.

Michael Weil: As a result of the robust pipeline we have built in the early stages of our strategic disposition effort, we have raised our guidance for the disposition initiative to $650 million to $800 million of closed transactions in 2024 within our stated 7% to 8% cash cap rate. We believe the 7.3% cash cap rate achieved on the occupied dispositions demonstrates the value of our primarily investment-grade portfolio, representing a significant premium compared to G&L's current implied cap rate.

Michael: As a result of the robust pipeline, we have built in the early stages of our strategic disposition effort. We have raised our guidance for the disposition initiative to $650 million to $800 million of closed transactions in 2024 within our state at 7% to 8% cash cap rate we.

Michael: Believe the seven 3% cash cap rate achieved on the occupied dispositions demonstrates the value of our primarily investment grade portfolio, representing a significant premium compared to gnl's current implied cap rate.

Michael Weil: We remain committed to reducing leverage into 2025, and we plan to disclose additional information on incremental dispositions as part of our 2025 business plan. These dispositions are focused on non-core assets with shorter weighted average remaining lease terms compared to our portfolio average, as well as opportunistic sales. As part of this strategy, we anticipate further reducing our office portfolio through non-core dispositions targeting an exposure below 20% of total portfolio straight line rent by the end of 2024. Notable sales in the quarter include 20 single-tenant retail properties leased to Truist for over $50 million at a 6.4% cash cap rate, and a portfolio of nine properties leased to AmeriCold for $170 million.

We remain committed to reducing leverage into 2025, and we plan to disclose that information on incremental dispositions as part of our 2025 business plan.

Michael Weil: These dispositions are focused on non-core assets with shorter weighted average remaining lease term compared to our portfolio average, as well as opportunistic sales. As part of this strategy, we anticipate further reducing our office portfolio through non-core dispositions, targeting an exposure below 20% of total portfolio straight line rent by the end of 2024. Notable sales in the quarter include 20 single tenant retail properties, lease to Truest, totaling over $50 million at a 6.4% cash cap rate, and a portfolio of nine properties lease to AmeriCold for $170 million. The AmeriCold portfolio, with its 3.3 years of weighted average remaining lease term and renewal uncertainties, generated $170 million of gross proceeds, which we used to pay on our 2025 maturing debt balance during the quarter, with the remaining proceeds used to further pay down our revolving credit facility.

Michael: These dispositions are focused on noncore assets with shorter weighted average remaining lease term compared to our portfolio average as well as the opportunistic sales.

Michael: As part of this strategy, we anticipate further reducing our office portfolio through noncore dispositions targeting an exposure below 20% of total portfolio straight line rent by the end of 2024.

Michael: Notable sales in the quarter include 20 single tenant retail properties leased to truest totaling over $50 million at a six 4% cash cap rate and a portfolio of nine properties leased to americold for $170 million.

Michael Weil: The AmeriCold portfolio, with its 3.3 years of weighted average remaining lease term and renewal uncertainties, generated $170 million of gross proceeds, which we used to pay off our 2025 maturing debt balance during the quarter, with the remaining proceeds used to further pay down our revolving credit facility. This strategy exemplifies G&L's commitment to enhancing asset value and delivering long-term shareholder returns. Additionally, we have nearly $180 million in vacant property dispositions that are closed or under agreement, which are expected to eliminate over $3 million of annualized operating expenses, assuming the closing of the transactions contemplated by such agreement.

Michael: The americold portfolio with its three three years of weighted average remaining lease term and renewal uncertainties generated $170 million of gross proceeds, which we used to pay our 2025 maturing debt balance during the quarter with the remaining proceeds used to further pay down our revolving credit.

Michael: Facility.

Michael Weil: This strategy exemplifies GNL's commitment to enhancing asset value and delivering long-term shareholder returns. Additionally, we have nearly $180 million in vacant property dispositions that are closed or under agreement, which are expected to eliminate over $3 million of annualized operating expenses, assuming closing of the transactions contemplated by such agreements. We're pleased to report that our progress in the 2024 Strategic Disposition Plan has enabled us to achieve a net debt to adjusted EBITDA ratio of 8.1 times at the end of the second quarter, down from 8.4 times last quarter. While we have more work ahead of us, we're optimistic about the progress we've made this far and are confident in our ability to further reduce leverage in the second half of the year without negatively impacting our AFFO per share.

Michael: This strategy exemplifies gnl's commitment to enhancing asset value and delivering long term shareholder returns.

Speaker Change: Additionally, we have nearly $180 million in vacant property dispositions that are closed or under agreement, which are expected to eliminate over $3 million of annualized operating expenses, assuming closing of the transactions contemplated by such agreements.

Michael Weil: We're pleased to report that our progress on the 2024 strategic disposition plan has enabled us to achieve a net debt to adjusted EBITDA ratio of 8.1 times at the end of the second quarter, down from 8.4 times last quarter. While we have more work ahead of us, we're optimistic about the progress we've made this far and are confident in our ability to further reduce leverage in the second half of the year without negatively impacting our AFFO per share.

We're pleased to report that our progress in the 2024, our strategic disposition plan has enabled us to achieve a net debt to adjusted EBITDA ratio of eight one times at the end of the second quarter down from eight four times last quarter. While we have more work ahead of US we're optimistic about the progress we've made thus far.

Speaker Change: Far and are confident in our ability to further reduce leverage in the second half of the year without negatively impacting our <unk> per share.

Michael Weil: I want to emphasize that a key priority of our disposition strategy is selling assets held on our revolving credit facility. As these assets incur the highest interest cost and allow us to deliver it on an earnings-neutral basis. If a sale involves assets not on our revolving credit facility, our intent is to allocate the remaining proceeds to reduce our revolving credit facility balance as we did with our AmeriCold disposition.

Michael Weil: I want to emphasize that a key priority of our disposition strategy is selling assets held on our revolving credit facility, as these assets incur the highest interest costs and allow us to deleverage on an earnings-neutral basis. If a sale involves assets not on our revolving credit facility, our intent is to allocate the remaining proceeds to reduce our revolving credit facility balance, as we did with our AmeriCold disposition.

Speaker Change: I wanted to emphasize that a key priority of our disposition strategy is selling assets held on our revolving credit facility as these assets incur the highest interest costs and allow us to delever. It on an earnings neutral basis.

Speaker Change: If a sale involves assets not on a revolving credit facility. Our intent is to allocate the remaining proceeds to reduce our revolving credit facility balance as we did with our americold disposition.

Michael Weil: Another financing tool that provides GNL with a significant advantage is our ABS master. To provide some context for those who are not familiar. The Master Trust allows for a flexible collateral pool with the ability to substitute or release assets, which gives G&L more flexibility than what is traditionally found in other types of finance. As we dispose of assets that currently fit on our ABS at an approximately 3.6% interest rate, we replace them with assets from our revolving credit facility, which currently carry a 7.3% floating interest rate on the US dollar portion. This generates over 300 basis points of interest rate savings and allows us the flexibility to continue focusing on reducing our cost of capital as we continue to dispose of assets.

Michael Weil: Another financing tool that provides G&L with a significant advantage is our ABS MasterTrust. To provide some context for those who are not familiar, the Master Trust allows for a flexible collateral pool with the ability to substitute or release assets, which gives GNL more flexibility than what is traditionally found in other types of financing, as we dispose of assets that currently sit on our ABS at an approximately 3.6% interest rate. We replace them with assets from our revolving credit facility, which currently carries a 7.3% floating interest rate on the U.S. dollar portion.

Speaker Change: Another financing tool that provides GNL with a significant advantage is our ABS Master Trust.

To provide some context for those who are not familiar the master trust allows for a flexible collateral pool with the ability to substitute or re lease assets, which gives GNL more flexibility than what is traditionally found in other types of financings.

Speaker Change: As we dispose of assets that currently sit on our ABS and then approximately three 6% interest rate.

Speaker Change: We replace them with assets from our revolving credit facility, which currently carries a seven 3% floating interest rate on the U S dollar portion.

Michael Weil: This generates over 300 basis points of interest rate savings and allows us the flexibility to continue focusing on reducing our cost of capital as we continue to dispose of assets. As mentioned, G&L continues to place a strong emphasis on de-risking our balance sheet, focusing on managing near-term debt maturities and increasing the proportion of fixed-rate debt in our portfolio. We have been proactive in addressing near-term debt maturities, and as of August 1, we have successfully addressed 100% of the debt that was scheduled to mature in 2024 through dispositions or refinancing onto a revolving credit facility. As a result, G&L currently has no debt maturities through July 2025.

Speaker Change: This generates over 300 basis points of interest rate savings and allows us the flexibility to continue focusing on reducing our cost of capital as we continue to dispose of assets.

Michael Weil: As mentioned, G&L continues to place a strong emphasis on derisking our balance sheet, focusing on managing near-term debt maturities and increasing the proportion of fixed-rate debt in our portfolio. We have been proactive in addressing near-term debt maturities, and as of first, we have successfully addressed 100% of the debt that was scheduled to mature in 2024 through dispositions or refinancing onto our revolving credit facility. As a result, G&L currently has no debt maturities through July of 2025. Additionally, we previously announced we expect to achieve $75 million in savings, resulting from the merger and internalization of our management functions by the end of Q3 2024.

Speaker Change: As mentioned GNL continues to place a strong emphasis on derisking, our balance sheet, focusing on managing near term debt maturities and increasing the proportion of fixed rate debt in our portfolio. We have been proactive in addressing near term debt maturities and as of August 1st we have successfully addressed one.

Speaker Change: As a percent of the debt that was scheduled to mature in 2024 through dispositions or refinancing onto our revolving credit facility. As a result, GNL currently has no debt maturities through July of 2025.

Michael Weil: Additionally, we previously announced we expect to achieve $75 million in savings resulting from the merger and internalization of our management functions by the end of Q3 2024. We're excited to announce that through Q2 2024, we've already recognized over $74 million of cost synergies, with the remaining balance to be realized next quarter. During the second quarter of 2024, we also showcased our strong asset management capabilities through robust leasing activity. We achieved positive leasing spreads encompassing nearly 1.5 million square feet with attractive renewal spreads that were 4.3% higher than expiring rent.

Speaker Change: Additionally, we previously announced we expect to achieve $75 million in savings, resulting from the merger and internalization of our management functions by the end of Q3 2024, we're excited to announce that through Q2 2024, we've already recognized over $74 million of cost synergies.

Michael Weil: We're excited to announce that, through Q2 2024, we've already recognized over $74 million of cost synergies, with the remaining balance to be realized next quarter. During the second quarter of 2024, we also showcased our strong asset management capabilities through robust leasing activity. We achieved positive leasing spreads encompassing nearly 1.5 million square feet, with attractive renewal spreads that were 4.3% higher than firing rents. New leases that were completed in the second quarter of 2024 have a weighted average lease term of 8.3 years, while the renewals that were completed during this period have a weighted average lease term of 8.5 years.

Speaker Change: With the remaining balance to be realized next quarter. During the second quarter of 2024, we also showcased our strong asset management capabilities through robust leasing activity.

Speaker Change: We achieved positive leasing spreads encompassing nearly one 5 million square feet with attractive renewal spreads that were four 3% higher than expiring rents.

Michael Weil: New leases that were completed in the second quarter of 2024 had a weighted average lease term of 8.3 years, while the renewals that were completed during this period had a weighted average lease term of 8.5 years.

Speaker Change: New leases that were completed in the second quarter of 2024 have a weighted average lease term of eight three years, while the renewals that were completed during this period have a weighted average lease term of eight five years.

Michael Weil: Notably, the single tenant segment completed 16 new leases and renewals, highlighted by an 8.5% renewal spread. The multi-tenant segment completed 81 new leases and renewals, resulting in a 2% renewal spread, consistent with the high demand we're experiencing at our suburban shopping centers. Turning to our portfolio, as of the end of the second quarter, we owned 1,242 properties spanning over 64 million square feet and a weighted average remaining lease term of 6.5 years. Our weighted average remaining lease term remains steady quarter over quarter, which is directly attributable to our strategic focus on disposing of assets with short remaining lease terms and leasing efforts.

Michael Weil: Notably, the single tenant segment completed 16 new leases and renewals, highlighted by an 8.5% renewal spread. The multi-tenant segment completed 81 new leases and renewals, resulting in a 2% renewal spread, consistent with the high demand we're experiencing at our suburban shopping center. Turning to our portfolio, as of the end of the second quarter, we own 1,242 properties spanning over 64 million square feet and a weighted average remaining lease term of 6.5 years.

Speaker Change: Notably the single tenant segment completed 16, new leases and renewals highlighted by an eight 5% renewal spread.

Speaker Change: The multi tenant segment completed 81, new leases and renewals, resulting in a 2% renewal spreads consistent with the high demand we are experiencing at our suburban shopping centers.

Speaker Change: Turning to our portfolio as of the end of the second quarter. We owned 242 properties spanning over 64 million square feet and a weighted average remaining lease term of six five years.

Michael Weil: Our weighted average remaining lease term remains steady quarter over quarter, which is directly attributable to our strategic focus on disposing of assets with short remaining lease terms and successful leasing efforts. We believe G&L is well positioned to continue to navigate external macro challenges given the diverse composition of our net lease portfolio, which is unmatched across geography, asset type, tenant, and industry. Regarding other tenant exposure, G&L maintains limited exposure to Family Dollar for only seven basis points of straight line rent, and cons and big lots each represent just eight basis points of straight line rent. We had minimal exposure to Route 21, accounting for only five basis points of straight line rent, and no exposure to Red Lobster, which both recently filed for bankruptcy.

Speaker Change: Our weighted average remaining lease term remains steady quarter over quarter, which is directly attributable to our strategic focus on disposing of assets with short remaining lease terms.

Speaker Change: Releasing efforts.

Michael Weil: We believe GNL is well positioned to continue to navigate external macro challenges given the diverse composition of our net lease portfolio, which is unmatched across geography, asset type, tenant, and industry. Regarding other tenant exposure, GNL maintains limited exposure to Family Dollar of only seven basis points of straight line rent, and Cons and Big Lots each represent just eight basis points of straight line rent. We had minimal exposure to Route 21, accounting for only five basis points of straight-line rent and no exposure to Red Lobster, which both recently filed for bankruptcy. This is a testament to our portfolio's impressive diversification and credit underwriting.

Speaker Change: We believe GNL is well positioned to continue to navigate external macro challenges given the diverse composition of our net lease portfolio, which is unmatched across geography asset type tenant and industry.

Speaker Change: Regarding other tenant exposure GNL maintains limited exposure to family dollar of only seven basis points of straight line rent and cons and big lots each represent just eight basis points of straight line rent we.

Speaker Change: We had minimal exposure to route 21 accounting for only five basis points of straight line rent and no exposure to Red lobster, which both recently filed for bankruptcy.

Michael Weil: This is a testament to our portfolio's impressive diversification and credit underwriting. No single tenant accounts for more than 3.2% of total straight-line rent, and the top ten tenants collectively contribute only 21% of total straight-line rent. We continue to monitor all tenants in our portfolio and their business operations on a regular basis. Geographically, 80% of our straight line rent is earned in North America and 20% from Europe. The portfolio features a stable tenant base and a high quality of earnings, with an industry-leading 59% of tenants receiving an investment grade or implied investment grade rating.

Speaker Change: This is a testament to our portfolio's impressive diversification and credit underwriting.

Michael Weil: No single tenant accounts from within 3.2% of total straight-line rent, and the top 10 tenants collectively contribute only 21% of total straight-line rent. All tenants in our portfolio and their business operations on a regular basis. Geographically, 80% of our straight line rent is earned in North America and 20% from Europe. The portfolio features a stable tenant base and a high quality of earnings, with an industry leading 59% of tenants receiving an investment grade or implied investment grade rating. The portfolio features an average annual contractual rental increase of 1.3%, which excludes the impact of 14% of the portfolio with CPI link leases that have historically experienced significantly higher rental increases.

Speaker Change: No single tenant accounts for more than three 2% of total straight line rent and the top 10 tenants collectively contribute only 21% of total straight line rent.

Speaker Change: We continue to monitor all tenants in our portfolio and their business operations on a regular basis.

Speaker Change: Basically 80% of our straight line rent is earned in North America, and 20% from Europe.

Speaker Change: The portfolio features a stable tenant base and a high quality of earnings with an industry, leading 59% of tenants receiving an investment grade or implied investment grade rating. The portfolio features an average annual contractual rental increase of one 3%, which excludes the impact of 14% of the portfolio with <unk>.

Michael Weil: The portfolio features an average annual contractual rental increase of 1.3%, which excludes the impact of 14% of the portfolio, with CPI-linked leases that have historically experienced significantly higher rental increases. I encourage everyone to look at our Q2 2024 investor presentation on our website for more details on each segment of our portfolio. We remain committed to executing on our systematic and prudent approach to achieving our financial objectives, focusing on reducing net debt to adjusted EBITDA without negatively impacting earnings while organically enhancing NOI through lease-up initiatives and contractual rent growth.

Speaker Change: <unk> link leases that have historically experienced significantly higher rental increases.

Michael Weil: Compared everyone to look at our Q2 2024 investor presentation on our website for more details on each segment of our portfolio. We remain committed to executing on our systematic and prudent approach to achieving our financial objectives, focusing on reducing net debt to adjusted EBITDA without negatively impacting earnings while organically enhancing NOI through lease-up initiatives and contractual rent growth. We are pleased with our first half achievements and look forward to sustaining this momentum in the second half of 2024.

Speaker Change: Everyone to look at our Q2 2024 investor presentation on our website for more details on each segment of our portfolio.

Speaker Change: We remain committed to executing on our systematic and prudent approach to achieving our financial objectives, focusing on reducing net debt to adjusted EBITDA without negatively impacting earnings while organically enhancing NOI through lease up initiatives and contractual rent growth.

Michael Weil: We're pleased with our first half achievements and look forward to sustaining this momentum in the second half of 2024. I'll turn the call over to Chris to walk you through the financial results and balance sheet matters in more detail.

Speaker Change: With our first half achievements and look forward to sustaining this momentum in the second half of 2024.

Christopher Masterson: I'll turn the call over to Chris to walk you through the financial results and balance sheet matters in more detail. Chris?

Speaker Change: I'll turn the call over to Chris to walk through the financial results and balance sheet matters in more detail Chris.

Christopher Masterson: Thanks, Mike. Please note that, as always, a reconciliation of GAAP net income to non-GAAP measures can be found in our earnings release, which is posted on our website. For the second quarter of 2024, we recorded revenue of 203 million and a net loss attributable to common stockholders of 47 million, compared to 206 million and 35 million in Q1 2024, respectively. AFSL grew 2% to 77 million or 33 cents per share in the second quarter of 2024, compared to 75 million or 33 cents per share in Q1 2024, representing a 2% AFSL per share increase from last quarter.

Chris Masterson: Thanks, Mike. Please note that, as always, a reconciliation of gap net income to non-gap measures can be found in our earnings release, which is posted on our website. For the second quarter of 2024, we recorded revenue of $203 million and a net loss attributable to common stockholders of $47 million, compared to $206 million and $35 million in Q1 2024, respectively. AFFO grew 2% to $77 million, or $0.33 per share, in the second quarter of 2024, compared to $75 million, or $0.33 per share, in Q1 2024, representing a 2% AFFO per share increase from the previous quarter.

Mike: Thanks, Mike.

Chris: Note that as always a reconciliation of GAAP net income to non-GAAP measures can be found in our earnings release, which is posted on our website.

Chris: For the second quarter 2024, we recorded revenue of $203 million and a net loss attributable to common stockholders of $47 million compared to $206 million and $35 million in Q1 2024, respectively.

Speaker Change: <unk> grew 2% $77 million or <unk> 33 per share in the second quarter of 2024 compared to $75 million or <unk> 33 per share in Q1, 2024, representing a 2% <unk> per share increase from last quarter.

Christopher Masterson: We achieved the significant reduction in income tax expense in Q2 2024, driven by the continued benefits from the successful European tax restructure and a 3.8 million tax benefit recognized in the quarter.

Chris Masterson: We achieved a significant reduction in income tax expense in Q2 2024, driven by the continued benefits from the successful European tax restructure and a $3.8 million tax benefit recognized in the quarter. Looking at our balance sheet, our debt comprises $1 billion in senior notes, $1.7 billion on the multi-currency revolving credit facility, and $2.4 billion of outstanding gross mortgage debt, with zero debt maturing for the remainder of the year. Our debt includes 90% fixed rate debt, which incorporates floating rate debt with in-place interest rate swaps, and our interest coverage ratio was 2.4 times.

Speaker Change: We achieved a significant reduction in income tax expense in Q2 2024, driven by the continued benefits from the successful European tax restructure and a $3 8 million tax benefit recognized in the quarter.

Christopher Masterson: Looking at our balance sheet, our debt comprises 1 billion in senior notes, 1.7 billion on the multi currency revolving credit facility, and 2.4 billion about standing gross mortgage debt, with zero debt return for the remainder of the year. Our debt includes 90% sixth rate debt, which incorporates floating rate debt within place interest rate swaps, and our interest coverage ratio was 2.4 times. It's important to note that even though 90% of our debt is subject to fixed rates, the current sustained high interest rate environment has a temporary effect on the portion of our debt that isn't fixed or swaps.

Speaker Change: Looking at our balance sheet, our debt comprises $1 billion in senior notes $1 7 billion on the multi currency revolving credit facility and $2 4 billion of outstanding gross mortgage debt.

Speaker Change: With zero debt maturing for the remainder of the year.

Speaker Change: Our debt includes 90% fixed rate debt, which incorporates floating rate debt with in place interest rate swaps and our interest coverage ratio was two four times.

Chris Masterson: It's important to note that even though 90% of our debt is subject to fixed rates, the current sustained high interest rate environment has a temporary effect on the portion of our debt that isn't fixed or swapped. To mitigate this,

Speaker Change: It is important to note that even though 90% of our debt is subject to fixed rate. The current sustained high interest rate environment has a temporary effect on the portion of our debt that isn't fixed or swapped.

Christopher Masterson: Midagate this in April, we reduced variable rate that exposure through $237 million TNBS refinancing and swapped $300 million of the US dollar portion of our revolving credit facility to an interest rate that is 120 basis points lower than the current floating interest rate effective April 1, 2024. Additionally, in March, we entered into 200 million of GBP swaps that are approximately 90 basis points lower than the one month zone yet. These proactive cost-cutting actions have reduced our rated average interest rate to 4.7%, down from 4.8% in Q1, 2024, and increase the portion of our debt that is fixed rate to 90%, up from 84% in Q1, 2024.

Michael Weil: In April, we reduced variable rate debt exposure through a $237 million CMBS refinancing and swapped $300 million of the U.S. dollar portion of our revolving credit facility to an interest rate that is 120 basis points lower than the current floating interest rate, effective April 1, 2024. Additionally, in March, we entered into 200 million GBP swaps that are approximately 90 basis points lower than the one month. These proactive cost-cutting actions have reduced our weighted average interest rate to 4.7%, down from 4.8% in Q1 2024, and increased the portion of our debt that is fixed at 90%, up from 84% in Q1 2020.

Speaker Change: Mitigate that in April we reduced variable rate debt exposure for with $237 million <unk> refinancing and swapped $300 million of the U S. Dollar portion of our revolving credit facility to an interest rate that is 120 basis points lower than the current floating interest rate effective April one 2020.

Speaker Change: Sure.

Speaker Change: Additionally, in March we entered into $200 million of GBP swaps that approximately 90 basis points lower than the one month selling yet.

Speaker Change: These proactive cost cutting actions have reduced our weighted average interest rate of four 7% down from four 8% in Q1 2024.

Speaker Change: And increased the portion of our debt is fixed rate to 90% up from 84% in Q1 2000 2012.

Christopher Masterson: At the end of the second quarter, our net debt to adjusted EBITDA ratio is 8.1 times based on net debt of 5 billion, a decrease of 0.3 times from prior quarter, largely due to the 277 million of disposition closed in Q2. We have successfully managed to reduce our outstanding debt balance by 251 million from Q1 2024, and we intend to further reduce our outstanding debt balance as we close on the disposition currently in our pipeline. We have liquidity of approximately 220 million and 214 million of capacity on our revolving credit facility. As of June 30 of 2024, we are approximately 230.8 million common shares outstanding and approximately 230.4 million shares outstanding on a weighted average basis.

Michael Weil: At the end of the second quarter, our net debt to adjusted EBITDA ratio was 8.1 times based on net debt of $5 billion, a decrease of 0.3 times from the prior quarter, largely due to the $277 million of dispositions closed in Q10. We have successfully managed to reduce our outstanding debt balance by $251 million from Q1 2024, and we intend to further reduce our outstanding debt balance as we close on the disposition currently in our pipeline.

Speaker Change: At the end of the second quarter, our net debt to adjusted EBITDA ratio was eight one times based on net debt of 5 billion a decrease of <unk> three times from prior quarter, largely due to the $277 million of dispositions closed in Q2.

Speaker Change: We have successfully managed to reduce our outstanding debt balance by $251 million from Q1, 2024, and we intend to further reduce our outstanding debt balance as we close on the disposition currently in our pipeline.

Michael Weil: We have liquidity of approximately $220 million and $214 million of capacity on our revolving credit facility. As of June 30, 2024, we had approximately 230.8 million common shares outstanding and approximately 230.4 million shares outstanding on a weighted average basis. Turning to our outlook for the remainder of 2024, based on progress to date, we are reaffirming our AFFO per share guidance range of $1.30 to $1.40 and a net debt to adjusted EBITDA range of 7.4 times to 7.8. As Mike mentioned, we have increased guidance related to our disposition initiative to $650 million to $800 million from $400 million to $600 million. I'll now turn the call back to Mike for some closing remarks.

Speaker Change: We have liquidity of approximately $220 million and $214 million capacity on our revolving credit facility.

Speaker Change: As of June 30 of 2024, we had approximately $230 8 million common shares outstanding and approximately 234 million shares outstanding on a weighted average basis.

Christopher Masterson: Turning to our outlook for the remainder of 2024, based on progress to date, we are reaffirming our AFFO per share guidance range of $1.30 to $1.40 and a net debt to adjusted EBITDA range of 7.4 times to 7.8 times. As Mike mentioned, we have increased guidance related to our disposition initiative to 650 million to 800 million, from 400 million to 600 million.

Speaker Change: Turning to our outlook for the remainder of 2024 based on progress to date, we are reaffirming our <unk> per share guidance range of $1 30 to $1 40, and our net debt to adjusted EBITDA range of seven four times to seven eight times.

Speaker Change: As Mike mentioned, we have increased guidance related to our disposition initiative to $650 million to $800 million from $400 million to $600 million.

Michael Weil: I'll now turn the call back to Mike for some closing remarks. Thanks, Chris. GNL made significant progress in the first half of 2024. Effectively executing the business plan, we set forth at the beginning of the year and demonstrating strong performance across multiple strategic initiatives. We're pleased with the velocity of our 2024 Strategic Disposition Plan, with closed and pipeline dispositions totaling $728 million at favorable cash cap rates, underscoring the strength of our investment-grade portfolio. This initiative has been crucial in our efforts to align our leverage with industry peers by reducing net debt to adjusted EBITDA. During the successful second quarter, we saw a 0.3 times decrease in net debt to adjusted EBITDA to 8.1 times, with further reductions anticipated in the second half of the year.

Speaker Change: I'll now turn the call back to Mike for some closing remarks.

Mike: Thanks, Chris.

Michael Weil: G&L made significant progress in the first half of 2024, effectively executing the business plan we set forth at the beginning of the year and demonstrating strong performance across multiple strategic initiatives. We're pleased with the velocity of our 2024 strategic disposition plan, with closed and pipeline dispositions totaling $728 million at favorable cash cap rates, underscoring the strength of our investment-grade portfolio. This initiative has been crucial in our efforts to align our leverage with industry peers by reducing net debt to adjusted EBITDA.

Mike: <unk> made significant progress in the first half of 2024 effectively executing the business plan, we set forth at the beginning of the year and demonstrating strong performance across multiple strategic initiatives.

Speaker Change: We're pleased with the velocity of our 2024, our strategic disposition plan with closed and pipeline dispositions totaling $728 million at favorable cash cap rates underscoring the strength of our investment grade portfolio.

Speaker Change: This initiative has been crucial in our efforts to align our leverage with industry peers by reducing net debt to adjusted EBITDA. During the successful second quarter. We saw a 0.3 times decrease in net debt to adjusted EBITDA to eight one times with further reductions anticipated in the second half of the year or.

Michael Weil: During the successful second quarter, we saw a 0.3 times decrease in net debt to adjusted EBITDA to 8.1 times, with further reductions anticipated in the second half of the year. Our disposition initiative is being executed on an earnings-neutral basis, as demonstrated by our AFFO per share growth quarter over quarter. And importantly, it's worth reiterating that our proactive approach to managing near-term debt maturities has resulted in zero debt maturities through July 2025, further solidifying our financial stability.

Michael Weil: Our disposition initiative is being executed on an earnings-neutral basis, as demonstrated by our AFFO per share growth quarter over quarter. And importantly, it's worth reiterating that our proactive approach to managing near-term debt maturities has resulted in zero debt maturities through July 2025, further solidifying our financial stability. We've raised disposition guidance to a new range of $650 million to $800 million of closed dispositions in 2024 from an initial range of $400 million to $600 million, reflecting the rapid progress and effectiveness of our initiative. We've recognized 99% of the anticipated cost synergies from the merger and internalization, and expect to realize the full balance by next quarter as originally projected.

Speaker Change: Disposition initiative is being executed on an earnings neutral basis as demonstrated by our <unk> per share growth quarter over quarter and.

Speaker Change: And importantly, it's worth reiterating that our proactive approach to managing near term debt maturities has resulted in zero debt maturities through July 2025, further solidifying our financial stability.

Michael Weil: We've raised disposition guidance to a new range of $650 million to $800 million of closed dispositions in 2024 from an initial range of $400 million to $600 million, reflecting the rapid progress and effectiveness of our initiative. We've recognized 99% of the anticipated cost synergies from the merger and internalization and expect to realize the full balance by next quarter as originally projected. Additionally, continued strong leasing activities have increased portfolio occupancy and generated positive renewal spread.

Speaker Change: We've raised disposition guidance to a new range of $650 million to $800 million of closed dispositions in 2024 from initial range of $400 million to $600 million rich.

Speaker Change: Reflecting the rapid progress and effectiveness of our initiatives.

Speaker Change: We've recognized 99% of the anticipated cost synergies from the merger and internalization and expect to realize the full balanced by next quarter as originally projected.

Michael Weil: Additionally, continued strong leasing activities have increased portfolio occupancy and generated positive renewal spreads. As we look ahead, we believe the net lease industry continues to offer stable and predictable income, as demonstrated by GNL's successful second quarter results. We remain committed to executing our 2024 business plan and are optimistic about maintaining positive momentum, especially with tailwinds from potential rate cuts.

Speaker Change: Additionally continued strong leasing activities have increased portfolio occupancy and generated positive renewal spreads as we look ahead. We believe the net lease industry continues to offer stable and predictable income as demonstrated by GNL successful second quarter results.

Michael Weil: As we look ahead, we believe the net lease industry continues to offer stable and predictable income, as demonstrated by G&L's successful second quarter results. We remain committed to executing our 2024 business plan and are optimistic about maintaining positive momentum, especially with tailwinds from potential rate cuts. As always, we're available to answer any questions you may have on this quarter after the call. Operator, please open the line for questions.

Speaker Change: We remain committed to executing our 2024 business plan and are optimistic about maintaining positive momentum, especially with tailwind from potential rate cuts.

Michael Weil: As always, we're available to answer any questions you may have on this quarter after the call.

Speaker Change: As always we're available to answer any questions. You may have on this quarter. After the call operator, please open the line for questions.

Operator: Operator, please open the line for questions. Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad, and a confirmation tone indicate your lines in the question queue. You may press star two if you'd like to restore your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, so we pull for questions. Thank you.

Unknown Executive: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad, and the confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Thank you.

Speaker Change: At this time, we'll be conducting a question and answer session.

Speaker Change: If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press star two relates to withdraw your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Unknown Executive: One moment, please, while we poll for questions. Thank you. Thank you. And our first question comes from the line of John Kim with BMO Capital Markets. Please proceed with your question. Good morning, John.

Speaker Change: One moment. Please so we pull for questions. Thank you.

John Kim: Thank you, and our first question comes from the line of John Kim with BMO Capital Markets. Please see if you have any questions.

Speaker Change: Thank you and our first question comes from the line of John Kim with BMO Capital markets. Please proceed with your question.

John Kim: Good morning, John. Thanks. Good morning, and thank you. I wanted to ask about the dispositions that you've added to the poll this year and the additional disclosure on the assets that are in letter of intent at a 7-7 cap rate. Michael, I think from your commentary that this is mostly office assets, but I just wanted to confirm that's the case. And also, if you could just comment on the overall transaction market and how investor appetite has changed with the change in rates.

John Kim: Good morning, John. Thank you. Good morning, and thank you.

Speaker Change: Good morning, John.

John Kim: Good morning.

John Kim: I wanted to ask about the dispositions that you've added to the poll this year and the additional disclosure on the assets that are in better of intense at a 7-7 cap rate. Michael, I think from your commentary that this is mostly office assets, but I just wanted to confirm that's the case.

John Kim: Thank you.

John Kim: Wanted to ask about the dispositions that you've added to the pool this year.

Speaker Change: And the additional disclosure.

Speaker Change: On the assets that are better if intense at 707 cap rate.

Speaker Change: Michael I think from your commentary that this is mostly office assets, but I just wanted to confirm that's the case.

Michael Weil: And also, if you could just comment on the overall transaction market and how investor appetite has changed with the changing rates. Well, I think that we're going to see an increase in activity in the market. The expectation of lowering rates is only going to be a positive. So considering where we've been in the first half of the year, when it was not certain of timing on potential rate cuts, I think it will only help us and really be winded our back. As far as the executed LOI portion of what we're anticipating closing in the remainder of 2024, that's going to continue to change.

Speaker Change: And also if you could just comment on the overall transaction market and how investor appetite has changed with the change in rates.

Michael Weil: Well, I think that we're going to see an increase in activity in the market, and the expectation of lowering rates is only going to be positive. So considering where we were in the first half of the year when it was not certain of the timing of potential rate cuts, I think it will only help us and really be a wind at our back. As far as the executed LOI portion of what we're anticipating closing in the remainder of 2024, that's going to continue to change. It's just at the moment.

Speaker Change: Well I think that we're going to see.

Speaker Change: Ed.

Ed: Increase in activity in the market the expectation of lowering rates is only going to be a positive.

Speaker Change: So considering where we've been in the first half of the year when it was not certain of timing on potential rate cuts.

Speaker Change: It will only help us and really be winded our back.

Speaker Change: As far as the executed LOI portion of what we're anticipating closing and the remainder of 2024, that's going to continue to change its just at the moment.

Michael Weil: It's just at the moment. The average cap rate is a 7.7. As you've seen in the first quarter, we were 7.3 on closed assets. In the second quarter, we're 7.4. And we've got an upcoming allocation that's under PFA that's at a 6.7. So I don't think this is just a moment in time type of analysis. And there are some assets that are going to be at a higher cap rate. It is a disposition mix that does include office as well.

Speaker Change: Average cap rate is seven 7% as you've seen.

Michael Weil: The average cap rate is 7.7. As you've seen, in the first quarter, we were 7.3. On closed assets in the second quarter, we're 7.4. And we've got an upcoming allocation that's under PSA that's at 6.7. So I don't think, you know, this is just a moment in time type of analysis, and there some assets are going to be at a higher cap rate. It is a disposition mix that does include office as well, and as we move from LOI to CLOSE, we will continue to provide property-level details on those dispositions.

Speaker Change: In the first quarter were seven three on closed assets in the second quarter were seven four and we've got an upcoming.

Speaker Change: Allocation thats under PSA that's at a $6 seven so I don't think this is just a moment in time type of analysis.

Speaker Change: And there are some assets are going to be at a higher cap rate.

Speaker Change: It is of.

Speaker Change: <unk> mix that doesn't include office as well and as we move from low LOI to close we will continue to provide.

Michael Weil: And as we move from LOI to close, we will continue to provide property-level details on those dispositions. But I don't think the 7.7 is any indication of where we're trending in our continued disposition strategy, and when we increased the guidance to 650 to 800, we still think that we're going to be in this operating range. And it's going to help us continue to pay down debt.

Speaker Change: Property level detail on those dispositions, but I don't think the seven seven is any indication of where we're trending in our continued disposition strategy and when we increased the guidance.

Michael Weil: But I don't think the 7-7 is any indication of where we're trending in our continued disposition strategy. And when we increased the guidance to 6-50, to... We still think that we're going to be in this. Operating range, I don't know that we'll be exactly at 7.3%, but it's going to be valuable, and it's going to help us continue to pay down debt. I'd like to just reiterate how happy we are with the results of being able to pay down the debt in the quarter and not seeing any erosion of earnings. That's something that we've been very focused on, and when we identify as the disposition of non-core assets, that's part of what we focus on. Reducing leverage is certainly the top goal, but so are earnings.

Speaker Change: To $6 50.

Speaker Change: Two.

Speaker Change: 800.

Speaker Change: We still think that we're going to be in this <unk>.

Speaker Change: Operating range I don't know that will be exactly at seven 3%, but.

Speaker Change: It is going to be valuable and it's going to help us continue to pay down debt.

Michael Weil: I'd like to just reiterate again how happy we are with the results of being able to pay down the debt in the quarter, but not seeing any erosion of earnings. I think that's something that we've been very focused on, and when we identify as disposition of non-core assets, that's part of really what we focus on because reducing leverage is certainly the top goal, but so are earnings.

Speaker Change: I'd like to just reiterate again.

Speaker Change: How happy we are with the results of being able to pay down the debt in the quarter, but not seeing any erosion of earnings.

Speaker Change: That's something that we've been very focused on and when we identify as disposition of noncore assets. That's part of really what we focus on because.

Speaker Change: Reducing leverage is certainly the top goal.

Speaker Change: But so our earnings.

Speaker Change: Yes.

Michael Weil: Yep, I understand that a 7.7 cap rate is likely due to mix, but just wanted to know if it contains a higher proportion of offices or non-US assets and that's what's driving the higher yield? No, it is primarily US dispositions. Again, it is a blend that includes office.

Michael Weil: Yep, I understand the 7, 7 cap rate is likely due to mix, but just wanted to know if it contains a higher proportion of office or non-U.S. assets and that's what's driving that higher yield?

Speaker Change: Yes, I understand the seven seven cap rate is likely.

Speaker Change: Slightly due to mix, but.

Speaker Change: Just wanted to know.

Speaker Change: Contains a higher proportion of losses or non U S assets.

Speaker Change: What's driving that higher yield.

Michael Weil: No, it is primarily U.S. dispositions. Again, it is a blend that includes office space, and as we said on the earnings call itself, this is going to drive our office portfolio percentage under 20% overall because we do see value in continuing to lower that.

Speaker Change: No. It is not it is.

Speaker Change: Primarily U S dispositions again it is a blend that includes office and as we said.

Michael Weil: And as we said on the earnings call itself, this is going to drive our office portfolio percentage under 20% overall because we do see value in continuing to lower that.

Speaker Change: The earnings call itself.

Speaker Change: This is going to drive our office portfolio percentage under 20% overall.

We do see.

Speaker Change: Value in continuing to lower that.

Speaker Change: Okay. This.

John Kim: This quarter, you had a nice pickup and occupancy on your multi-tenant retail portfolio. How do you see that progressing over the next year, year and a half? And specifically, you have a target of 91.20% based on the near-term pipeline. And we're just wondering what the headwinds are to that 91.20%.

Michael Weil: This quarter, you had a nice pick-up in occupancy on your multi-tenant retail portfolio. How do you see that progressing over the next year, year and a half? And specifically, you have a target of 91.8% based on The Near-Term Pipeline, and I'm just wondering what the headwinds are to that 91-120% if you look at expirations and known move-outs in the portfolio.

Speaker Change: This quarter, you had a nice pick up in occupancy on your multi tenant retail portfolio. How do you see that progressing over the next year year and a half.

Speaker Change: Specifically you have a target of 91, 8% based on the.

Speaker Change: The near term pipeline and.

Speaker Change: I'm just wondering what the headwinds are to that 90, 120%. If you look at exploration and known move outs in the portfolio.

Michael Weil: Let's see, look at expirations and known lose outs in the portfolio. Well, the asset management team has remained very busy and fully engaged. I believe that what you've seen in 2024, the first two quarters, is what you should expect to continue to see through the best of 24 and into 25. It's all been factored into our earnings guidance of $1.30 to $1.40. It does include continued uptake of occupancy. And besides the obvious value of leasing and increasing revenue, there's also the benefit of improving further the off-ex reimbursement rate. So it just, again, positive momentum on the revenue side of the balance sheet as we're also equally focused on lowering the debt side.

Michael Weil: Well, the asset management team has remained very busy and fully engaged. I believe that what you've seen in 2020 for the first two quarters is what you should expect to continue to see through the best of 24 and into 25. It's all been factored into our earnings guidance of $1.30 to $1.40. It does include continued uptake of occupancy.

Speaker Change: While the asset management team has remained very busy and fully engaged.

Speaker Change: I believe that what you've seen in 2020 for the first two quarters.

Speaker Change: Is what you should expect to continue to see through the balance of 'twenty four and into 25, it's all been factored into our earnings guidance of $1 30 to $1 40. It does include continued uptake of occupancy and.

Speaker Change: Besides the obvious value of leasing and increasing revenue. There's also the benefit of.

Michael Weil: And besides the obvious value of leasing and increasing revenue, there's also the benefit of improving the off X reimbursement rate further. So it's just, again, positive momentum on the revenue side of the balance sheet as we're also equally focused on lowering the debt side. Positive feedback on the shopping centers, as I've said in earnings calls prior, bringing in significant anchors makes the shopping centers more valuable in general; it creates Business Opportunities for the regional and local retailers that want to be in those centers.

Speaker Change: Improving further the.

Speaker Change: The opex reimbursement rate.

Speaker Change: So it just again positive momentum on the revenue side of the balance sheet. As we are also equally focused on lowering the debt side.

Michael Weil: So positive feedback on the shopping centers, as I've said in earnings calls prior, bringing in significant anchors makes the shopping centers more valuable in general. It creates business opportunities for the regional and local retailers that want to be in those centers. And I think you've seen from our release. We've avoided a lot of the retailers that are headline bankruptcies, and I don't ever want to say that we're infallible, but it is an intentional part of our underwriting; it didn't come as a surprise to us. We've made some strategic decisions four or five years ago regarding certain retailers and not wanting to have significant exposure to them.

Speaker Change: So.

Speaker Change: Positive feedback on the shopping centers as Ive said in earnings calls prior.

Bringing in significant anchors make.

Speaker Change: It makes the shopping centers more valuable in general.

Speaker Change: It creates business opportunities for the regional and local retailers that want to be in those centers and I think you've seen from our release.

Michael Weil: And I think you've seen from our release. We've avoided a lot of the retailers that are headline bankruptcies, and I don't ever want to say that we're infallible, but it is an intentional part of our underwriting. It didn't come as a surprise to us. We made some strategic decisions four or five years ago regarding certain retailers and not wanting to have significant exposure to them. That, you know, we never knew when, but we did believe in a tight credit market, they could potentially have problems. And I'm sorry to see that they did, but I'm happy to see that it didn't have an impact on our portfolio. Okay, great. Thank you. Thanks, John.

Speaker Change: We've avoided a lot of the retailers that are headline bankruptcies.

Speaker Change: And I don't ever want to say that we're infallible, but it is an international part of our underwriting it didn't come as a surprise to us.

Speaker Change: We've made some strategic decisions four or five years ago regarding certain retailers and not wanting to have significant exposure to them.

Speaker Change: That we never knew when but we did believe in a in a tight credit market.

Michael Weil: We never knew when, but we did believe in a tight credit market; they could potentially have problems, and I'm sorry to see that they did, but I'm happy to see that it doesn't have an impact on our portfolio.

Speaker Change: Could potentially have problems and I'm, sorry to see that they did but I'm happy to see that it doesn't have an impact on our portfolio.

John Kim: Okay, great, thank you.

Speaker Change: Okay, great. Thank you.

John Kim: Thanks, John.

John Kim: Thanks, John.

Bryan Maher: Our next question is from the line of Bryan Maher with B. Riley Security. Please just see with your questions.

Unknown Executive: Our next question is from the line of Bryan Maher with B. Reilly Securities. Please proceed with your question.

John Kim: Our next question is from the line of Bryan Maher with B Riley Securities. Please proceed with your questions.

Bryan Maher: Good morning, Bryan. Thank you.

Bryan Maher: Good morning, Michael Gorman and Chris. A couple of me this morning, so 8.4 to 8.1 without any earnings degradation. Pretty impressive for the second quarter. I think you're headed to the mid-7s. The peers are trained in kind of high fives and at the EBITDA.

John Kim: Good morning, Brian Good morning, Good morning, Michael Good morning, Chris.

Bryan Maher: Good morning. Good morning, Michael. Good morning, Chris. A couple for me this morning.

Bryan Maher: Couple from me. This morning, so eight four to eight one without any earnings degradation pretty impressive for the second quarter.

Michael Weil: So, 8-4 to 8-1 without any earnings degradation, pretty impressive for the second quarter. I think you're headed to the mid-7s. The peers are trading kind of high fives, net debt to EBITDA. Where's the end game? Can you share with us? Are you happy getting to the 6s eventually and maybe how long that takes?

Speaker Change: You are headed to the mid seven the peers that trade in kind of high <unk> net debt to EBITDA, whereas the yen gain can you share with US are you happy getting to the <unk> eventually and maybe how long that takes.

Michael Weil: Where's the end game? Can you share with us? Are you happy getting to the 6s eventually, and maybe how long that takes? Yeah, so the end game is to look essentially like our peers because that's what shareholders want to see. And, as we said last quarter, we have to start somewhere, and we want to do it in a rational way because, obviously, earnings really do matter. We will continue to use strategic dispositions as the driver. And there are other certain things you heard a little bit about. Our ability to move assets from the credit facility onto our ABS Master Trust.

Michael Weil: Yes, so the end game is to look essentially like our peers, because that's what shareholders want to see. And as we said last quarter, you know, we have to start somewhere. And we want to do it in a rational way, because obviously, earnings really do matter. We will continue to use strategic dispositions as the driver.

Bryan Maher: Yes.

Bryan Maher: And game is.

Speaker Change: To look essentially like our peers, because that's what shareholders want to see.

Speaker Change: And as we said last quarter, we have to start somewhere and we want to do it in a rational way.

Speaker Change: Because obviously earnings really do matter.

We will continue to use strategic dispositions as the driver.

Michael Weil: And there are other certain things you heard a little bit about our ability to move assets from the credit facility on to our ABS master trust, which is at a pretty significant lower cost of debt. That'll increase earnings. So as we think about net debt to adjusted EBITDA, obviously, debt is half of that equation. But with lease up, with balance sheet management, with doing things like we've done, restructuring our European assets, etc., we can lower leverage, and we can grow EBITDA.

Speaker Change: And there are other certain things you heard a little bit about our ability to move assets from the credit facility onto our ABS Master Trust.

Michael Weil: That is at a pretty significant lower cost of debt. That'll increase earnings. So, as we think about net debt to adjusted EBITDA, obviously debt is half of that equation. But with lease up, with balance sheet management, with doing things like we've done restructuring our European assets, et cetera, we can lower leverage and we can grow EBITDA. And this is going to be a multi-prong approach. I think we've been very clear with people that we're not going to be able to get from 8-4 first quarter to where we want to ultimately be within the calendar year.

Speaker Change: That is a pretty significant lower cost of debt.

Speaker Change: It will increase earnings.

Speaker Change: So as we think about net debt to adjusted EBITDA, obviously that is half of that equation.

Speaker Change: With lease up with balance sheet management, we're doing things like we've done restructuring our European assets et cetera.

Speaker Change: Lower leverage and we can grow EBITDA.

Michael Weil: And this is going to be a multi-pronged approach. You know, I think we've been very clear with people that we're not going to be able to get from 8-4 in the first quarter to where we want to ultimately be within the calendar year. But as we start to prove to the market our ability to execute, other doors are going to open that are going to let us take some steps strategically that could accelerate that next step, from the mid-7s closer to where our peers are.

Speaker Change: And this is going to be a multi pronged approach I think we've been very clear with people that we're not going to be able to get from eight for first quarter.

Speaker Change: To where we want to ultimately be within the calendar year.

Michael Weil: But as we start to prove to the market our ability to execute, others are going to open that are going to let us take some steps strategically that could accelerate that next step from the mid-7s closer to where our peers are. Okay, and then as we look at dispositions, I guess you're at 730 or so now for 2024. You raised your outlook to 650 to 800. Are you pretty firm about that 730, give or take 20, or do you think you could go even higher? I suspect you wouldn't put it on paper if you thought it would be lower.

Speaker Change: But as we start to prove to the market our ability to execute other issuers are going to open that are going to let us take some steps strategically.

Speaker Change: That could accelerate.

Speaker Change: Right that next step.

Speaker Change: From the mid Sevens closer to where our peers are.

Michael Weil: Okay, and then as we look at dispositions, I guess you're at 730 or so now for 2024. You raised your outlook to 650 to 800. Are you pretty firm about that 730, give or take 20? Or do you think you could go even higher? I suspect you wouldn't put it on paper if you thought it would be lower.

Speaker Change: Okay, and then as we look at dispositions I guess, you're at 730 or so now for 2020 for you.

Speaker Change: You raised your outlook to $2 50 to 800 are you pretty firm about that seven.

Speaker Change: Give or take 20 or do you think you could go even higher I suspect you wouldn't put it on paper if you thought it would be lower.

Michael Weil: Well, the $730 million that we talked about, we do know that some of those assets are going to be closing in the first quarter of 2024. So when we raised our guidance from $650 million to $800 million, that is based on closed dispositions in calendar year 2024, which was originally $400 million to $600 million.

Michael Weil: Well, the 730 that we talk about, we do know that some of those assets are going to be closing in the first quarter of 2024. So, when we raised our guidance from to 650 to 800 million, that is of closed dispositions in calendar year 2024, which was originally the 400 to 600. There's a site line on how we're going to achieve that. And as you and I have spoken about, the company is ultimately focused on achieving our net debt to EBITDA goals. I think it's the most important thing that we can continue to execute on, and we will.

Speaker Change: Well the 730 that we talked about we do know that some of those assets are going to be closing in the first quarter of 2024. So when we raised our guidance from <unk> to $6 $50 million to $800 million that is closed dispositions in calendar year 2024.

Speaker Change: Which was originally the 400 to 600.

Michael Weil: We have a pretty clear sight line on how we're going to achieve that, and as you and I have spoken about, the company is ultimately focused on achieving our net debt to EBITDA goals. I think it's the most important thing that we continue to execute on, and we will, and if there's a way to accelerate it, we'll do that as well. But this is part of the plan. I did say in the first quarter, "We're trading these assets in the low 7% cap rate range on an implied cap rate range."

Speaker Change: We have a pretty clear sight line on how we're going to achieve that.

Speaker Change: And as you and I have spoken about the company is ultimately focused on achieving our net debt to EBITDA goals I think it's the most important thing that we can continue to execute on and we will and if theres a way to accelerate it we will do that as well.

Michael Weil: And if there's a way to accelerate it, we'll do that as well. But this is part of the plan. I did say in the first quarter, we're trading these assets in the low 7% cap rate range on an inflate implied cap rate range. We're not trading anywhere near that. So, we're going to continue to prove value in this portfolio. We were really excited to see the positive momentum of the stock as we came into earnings. And we think that that's what's driving it. And we will continue to communicate our successes and execute on this plan.

Speaker Change: But this is part of the plan I did say in the first quarter.

Speaker Change: We're trading these assets in the low 7% cap rate range.

Speaker Change: And in plate implied cap rate range, we're not trading anywhere near that.

Michael Weil: We're not trading anywhere near that, so we're going to continue to prove value in this portfolio. We were really excited to see the positive momentum of the stock as we came into earnings, and we think that that's what's driving it, and we will continue to communicate our successes and execute on this plan.

Speaker Change: So we're going to continue to prove value in this portfolio.

Speaker Change: We were really excited to see the positive momentum of the stock as we came into earnings.

Speaker Change: And we think that's what's driving it and we will continue to.

Speaker Change: Communicate our successes and execute on this plan.

Michael Weil: So, we were surprised by the veracity of the decision. Can you give us a little bit of color on who the buyers are, the private equity, regional, smaller players. And what process are you using? Are you marketing these by brokers? Are these in-house outbound calls? Can you give us a little color on how you're achieving this? Yeah, you know, it's just coming to work every day and pounding the phones are our brokerage team, which I'm really proud of. They work with local brokers in each market where we have target dispositions. They identify who they think is the best set of boots on the ground and who knows the market the best.

Michael Weil: So we were surprised by the veracity of the dispositions. Can you give us a little bit of color on who the buyers are? You know, are they private equity? Are they, you know, regional, smaller players?

Speaker Change: So we were surprised by the veracity of the debt. The dispositions can you give us a little bit color on who the buyers are they private equity or are they regional or smaller players and what process are you using are you marketing needs by brokers or these in house outbound calls can you give us a.

Michael Weil: And what process are you using? Are you marketing these by brokers? Are these in-house, outbound calls? Can you give us a little color on how you're doing?

Speaker Change: A little color on how you're achieving this.

Michael Weil: Yeah, well, you know, um... It's just coming to work every day and pounding the phones, our brokerage team, which I'm really proud of. They work with local brokers in each market where we have target dispositions. They identify who they think is the best set of boots on the ground and who knows the market best. We have not really had a lot of institutional buyers because, Frankly, they tend to be more value-motivated, and we're looking for what we think is full value for the assets. A lot of the buyers are local. We continue to access the 1031 market.

Michael Weil: Yeah, well, you know,

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: It's just coming to work every day and pounding the phones are brokerage team, which really proud of.

Speaker Change: They work with local brokers in each market, where we have targeted dispositions.

Speaker Change: Identify who they think is the best set of boots on the ground and who knows the market the best.

Michael Weil: We have not really had a lot of institutional buyers because, frankly, they tend to be more value-motivated, and we're looking for what we think is full value for the assets. A lot of the buyers are local. We continue to access the 1031 market. We've also found a number; we've actually have relationships with a number of developers that see redevelopment opportunities in some of these assets. And we don't want to be in that business. We don't think that's a good use of our time or capital. So we would rather see those assets trade into someone else's hands and use the proceeds for our near-term goals, which is pay-down of outstanding debt.

Speaker Change: We have not really had a lot of institutional buyers because.

Speaker Change: Frankly, they tend to be more value motivate it and we're looking for.

Speaker Change: What we think is full value for the assets.

Speaker Change: The buyers are local we continue to access the 10 31 market.

Michael Weil: We've actually had relationships with a number of developers that see redevelopment opportunities in some of these assets, and we don't want to be in that business. We don't think that's a good use of our time or capital. So we would rather see those assets trade into someone else's hands and use the proceeds for our near-term goals, which is the pay down of outstanding debt.

Speaker Change: We've also found a number.

Speaker Change: We've actually have relationships with a number of <unk>.

Speaker Change: Developers that see redevelopment opportunities in some of these assets.

Speaker Change: And we don't want to be in that business.

Speaker Change: Don't think that's a good use of our time or capital.

Speaker Change: So we would rather.

Speaker Change: See those assets trade into someone else's hands and use the proceeds for our near term goals, which is pay down of outstanding debt.

Michael Weil: Thanks, and just last, for me, maybe a little two-part question. Who are the types of retailers who are driving your multi-tenant occupancy higher? Like who's out there growing their footprint? And then kind of the, you know, opposite of that, is there anybody in your tenant base, you know, with the consumer softening, and you touched upon some of the retailers who've had issues who are currently making you a little bit nervous? And that's all for me. Thank you, Bryan.

Michael Weil: But I can just look at some, maybe a little two-part question. Who are the types of retailers who are driving your multi-tenant occupancy higher? Like who's out there growing their footprint? And then kind of the opposite of that, is there anybody in your tenant base with the consumer softening, and you touched upon some of the retailers who've had issues who are currently making you a little bit nervous?

Speaker Change: Thanks, and then just lastly, maybe a two part question who are the types of retailers, who are driving your multi tenant occupancy higher like who's out there growing their footprint and then the.

Speaker Change: Opposite to that is there anybody in your tenant base with the consumer softening and you touched upon some of the retailers have had issues who are currently making you a little bit nervous and that's all for me.

Michael Weil: And that's all for me. Thank you, Brian. So the shopping center occupancy pickup has really been in expanding some great relationships that we've already had. We've spent some great time working with exporting goods, who I really frankly think is one of the best retailers in the country. They've been executing on their plan, dominating their sector, and really providing a lot of value in the communities where their stores are located. So it's fun to see companies like that that have a great model and continue to look to expand it, and we're proud to be a partner with them.

Speaker Change: Brian.

Speaker Change: <unk>.

Michael Weil: So the Shopping Center Occupancy Pickup has really been about expanding some great relationships that we've already had. We've had some great time working with Dick's Sporting Goods, who I frankly think is one of the best retailers in the country. They've been executing on their plan, dominating their sector, and really providing a lot of value in the communities where their stores are located. So it's fun to see companies like that that have a great model and continue to look to expand it, and we're proud to be a partner with them. You know, the national retailers; we continue to see great stuff from the discount apparel operators. Ross is always in the top ten in our multi-tenant portfolio.

So the shopping center occupancy pickup has really been an expanding some great relationships that we've already had.

We've spent some great time, working with Dick's sporting goods.

Speaker Change: Who I really frankly think is one of the best retailers in the country.

Speaker Change: They have been executing on their plan dominating their sector and really providing a lot of value in the communities where their stores are located.

Speaker Change: So it's fun to see companies like that that have a great model and continue to look to expand it and we're proud to be a partner with them.

Michael Weil: The national retailers, we continue to see great stuff from the discount of power operators. Ross is always a top tenant in our multi-tenant portfolio. But then there are also a lot of local or regional retailers. They could be independent pet supply. They can be hair and nail. They can be dry cleaners. But they, as I said in my earlier comments, benefit from the strong foot traffic that the retailers, the national retailers, bring into the center. So they're willing to pay a higher rent because their revenue is benefit from that. And we can negotiate better renewal terms. And it's really kind of one of those things that good tenants drive better results.

Speaker Change: The national retailers.

Speaker Change: We continue to see.

Speaker Change: Great stuff from the discount apparel operators.

Speaker Change: Ross is always a top tenant.

Speaker Change: Our multi tenant portfolio.

Michael Weil: But then there are also a lot of... local or regional retailers. They could be independent pet supplies. They can be, you know, hair and nail.

Speaker Change: But then there are also a lot of.

Speaker Change: Local or regional retailers, they could be independent pet.

Speaker Change: Pet supply they can be hair and nail they can be dry cleaners, but they as I said in my earlier comments they benefit from the strong foot traffic that the retailers the national retailers bring into the center.

Michael Weil: They can be dry cleaners. But they, as I said in my earlier comments, benefit from the strong foot traffic that the retailers, the national retailers, bring into the center. So they're willing to pay a higher rent because their revenues benefit from that. And we can negotiate better renewal terms. And it's really kind of one of those things that good tenants drive better results, and that's what we're focused on.

Speaker Change: So they are willing to pay a higher rent because their revenues benefit from that and we can negotiate better renewal terms.

Speaker Change: And it really kind of.

Speaker Change: One of those things that.

Speaker Change: Good tenants drive better results and that's what we're focused on.

Michael Weil: And that's what we're focused on.

Bryan Maher: Thank you. Thanks, man.

Speaker Change: Okay. Thank you.

Brian: Thanks, Brian.

Paul Rana: Our next questions are from one of you, Paul Rana, with Keepin Captain Markins. Please see you at your questions. Hey, how are you?

Unknown Executive: Our next questions are from Milena Upal Rana with KeyBank Capital Markets. I'm pleased to see you with your questions. Hey, how are you? How are you? Good morning, guys.

<unk> Rama: Our next questions are from the line of <unk> Rama with Keybanc capital markets. Please proceed with your question.

Upal Rana: Hey, good morning, guys. Just a few from me.

<unk> Rama: Hi.

Michael Weil: Hey, good morning, guys. Just a few from me. You highlighted a few of your tenant credit exposures to some trouble tenants and your prepared remarks. Yeah, the add up to about 20 basis points. How much was embedded into your guidance and of that 20 basis points, how much do you think is actually at risk here? First of all, I take every tenant's health seriously, but I'm very comfortable with where we are in this credit cycle. And it is not impacting our guidance. We have not been negatively surprised. And again, having a very strong asset management platform, a very tight control on rent collection and timing of rent collection.

Rama: How are you hey, good morning, guys.

<unk> Rama: A few from me.

Upal Rana: You know, you highlighted a few of your tenant credit exposures to some troubled tenants in your prepared remarks that add up to about 20 basis points. How much was embedded into your guidance? And of that 20 basis points, how much do you think is actually at risk here?

Rama: You highlighted a few of your tenant credit exposures to some troubled tenants in your prepared remarks that add up to about 20 basis points. How much was embedded into your guidance and of that 20 basis points. How much do you think is actually at risk here.

Michael Weil: First of all, I take every tenant's health seriously, but I'm very comfortable with where we are in this credit cycle. And it is not impacting our guidance. We have not been negatively surprised. And, again, having a very strong asset management platform, very tight control on rent collection and timing of rent collection. We're not seeing anything that gives us great concern. As a matter of fact, I think you'll notice the overall investment grade rating of the portfolio actually went up a percentage point this quarter from 58% to 59%. And that focus on credit from the beginning has been incredibly valuable for us and something that gives me comfort as I think about credit and guidance for the rest of 2024.

Speaker Change: First of all.

Speaker Change: I take every.

Speaker Change: Tenant health seriously, but I'm very comfortable with where we are in this credit cycle.

And it is not impacting our guidance is we have not been negatively surprised.

Speaker Change: And again, having a very strong asset management platform.

Speaker Change: Very tight control on rent collection and timing of rent collection.

Michael Weil: We're not seeing anything that gives us great concern. As a matter of fact, I think you'll notice the overall investment grade rating of the portfolio actually went up a percentage point this quarter from 58% to 59%. And that focus on credit from the beginning has been incredibly valuable for us and something that gives me comfort as I think about credit and guidance for the rest of 2024. Okay, great. That was helpful.

Speaker Change: Not seeing anything that gives us great concern as a matter of fact, I think youll notice on the overall investment grade rating of the portfolio actually went up a percentage point this quarter from 58% to 59%.

Speaker Change: And that focus on credit from the beginning.

Speaker Change: <unk> has been.

Speaker Change: Incredibly valuable for us and something that.

Speaker Change: Gives me comfort as I think about credit and guidance for the rest of 2024.

Michael Weil: Okay, great. That was helpful. And, you know, what percentage of your core portfolio would you say that you plan on keeping is currently vacant? And how is that potential lease-up of those properties trending?

Okay, Great that was helpful and then.

Michael Weil: And, you know, what percentage of your core portfolio would you say that you plan on keeping is currently vacant? And how is that potential lease-up of those properties trending? So the majority of the vacancy in the portfolio, as you know, is in the multi-tenant portfolio, where we continue to have gains on a net absorption basis and coupled with strong renewal activity. I believe that, you know, throughout the course of the year, we didn't give specific occupancy guidance, but it will be a benefit to earnings as we continue through the quarter. You know, I believe the multi-tenant portfolio; I've said this before, I believe that a good shopping center portfolio, you know, should really be in the mid-90s on an occupancy basis.

Speaker Change: What percentage of your core portfolio would you say that you plan on keeping is currently vacant and how was how has that potential lease up of those property is trending.

Michael Weil: So the majority of the vacancy in the portfolio, as you know, is in the multi-tenant portfolio, where we continue to have gains on a net absorption basis and, coupled with strong renewal activity. I believe that, throughout the course of the year, we didn't give specific occupancy guidance, but it will. A benefit to earnings as we continue through the quarter, you know. I believe the multi-tenant portfolio, I've said this before, I believe that a good shopping center portfolio should really be in the mid-90s on an occupancy basis. So we do have some additional earnings potential from the work that we'll continue to focus on and do. But it is a stable portfolio with a little bit of upside that I think is valuable.

Speaker Change: So the majority of the vacancy in the portfolio as you know is in the multi tenant portfolio.

Speaker Change: Where we continue to have gains on a net absorption basis and coupled with strong renewal activity.

Speaker Change: I believe that.

Speaker Change: The course of the year, we didn't give specific occupancy guidance.

Speaker Change: Sure.

Speaker Change: But it will be.

Speaker Change: A benefit to earnings as we continue through the quarter.

Speaker Change: I believe the multi tenant portfolio I've said this before I believe that good.

Speaker Change: Good shopping center portfolio should really be in the mid nineties on an occupancy basis. So we do have some additional earnings pickup potential from the work that we will continue to focus on and do.

Paul Rana: So we do have some additional earnings pick-up potential from the work that will continue to focus on and do, but it is a stable portfolio with a little bit of upside that I think is valuable. Okay, great. Thanks.

Speaker Change: But it is a stable portfolio with a little bit of upside that I think is valuable.

Michael Weil: Okay, great. Thanks. And then last for me, is there any update on the status of the three vacant Klausner locations? I believe two were expected to close during 2Q, and then the last property was still being shopped around. So any color that would be helpful? Yes.

Speaker Change: Okay, great. Thanks, and then last one for me.

Michael Weil: And then last for me, is there any update on the status of the three vacant closener locations? I believe two were expected to close during 2Q, and the last property was still being shopped around. So, any color that would be helpful? Yes. So one of the assets that was under contract closed in the quarter, in the second quarter; the other asset is closing in the third quarter. It's through due diligence, and it's just now, you know, a matter of days until we see that. And the final and fifth asset is still being marketed, as we had said. It's being marketed for sale or lease, but having addressed four of the five closener properties in a very quick amount of time, the impact on the portfolio will be very small.

Is there any update on the status of the three vacant clauser locations I believe two are expected to close during <unk>.

The last property was still being shopped around so any color there would be helpful. Yes.

Speaker Change: Yes.

Speaker Change: Hello.

Michael Weil: Yes. So, one of the assets that was under contract closed in the quarter, in the second quarter. The other asset is closing in the third quarter. It's going through due diligence, and it's just a matter of days until we see that. And the final and fifth asset is still being marketed, as we had said. It's being marketed for sale or lease, but having addressed four of the five Klausner properties in a very short amount of time, the impact on the portfolio will be very small.

Speaker Change: One of the assets that was under contract closed in the quarter in the second quarter the <unk>.

Other asset is closing in the third quarter, it's drew.

Through due diligence and it's just now.

Speaker Change: The matter of days until we see that.

Speaker Change: And the final and fifth assets is still being marketed as we had said.

Speaker Change: It is being marketed for sale or lease, but having addressed four of the five klausner properties in a very quick amount of time the impact on the portfolio.

Speaker Change: L B.

Speaker Change: Very small.

Paul Rana: Okay, great.

Upal Rana: Okay, great. That's all for me. Thanks.

Speaker Change: Okay, Great. That's all for me Thanks, Alright. Thanks.

Paul Rana: That's all for me. Thanks. All right. Thanks.

Operator: Thank you.

Unknown Executive: Thank you. As a reminder, remember to star 1 to ask a question. The next questions are from the line of Mitch Germain with Citizens JMP. Please submit your questions.

Speaker Change: Thank you.

Operator: As a reminder, remember to start one to ask a question.

Speaker Change: A reminder, remember star one to ask a question.

Mitch Dermain: The next questions are from the line of Mitch Dermain with Citizen JMP.

Speaker Change: The next question is from the line of Mitch Germain with citizens JMP. Please proceed with your questions.

Mitch Dermain: This is your questions. Hi, Mitch. Hey, hey, Harriet.

Mitch Germain: Hi Mitch. Hey, how are you? Good. Quick question. You mentioned Michael, you mentioned obviously office sales, and I'm curious. It seems like fundamentals across Europe, or at least the view toward offices across Europe is a bit more normalized, to like a pre-pandemic level. So are you going to be looking to trim exposure to properties outside the US? Just maybe some insight on your office sales strategy, please.

Mitch Germain: Hi, Mitch.

Mitch Germain: Hey, how are you.

Mitch Dermain: Good. The quick question you mentioned, Mike Lee mentioned, obviously, office sales. And I'm curious; you know, it seems like fundamentals across your, or at least the view toward office across Europe is a bit more normalized to like pre-pandemic levels.

Mitch Germain: A quick question.

Mitch Germain: You mentioned, Michael you mentioned, obviously office sales.

Speaker Change: And I'm curious.

Speaker Change: It seems like fundamentals across Europe.

Speaker Change: Or at least.

Speaker Change: The view toward office across Europe is a bit more normalized.

Speaker Change: Pre pandemic levels so.

Michael Weil: So, are you going to be looking to trim exposure to properties outside the US? Just maybe some insight on your office sales strategy, please. Yeah, so we think that there are opportunities in the office portfolio, both in the US and Europe, and we are exploring those opportunities. And as we have information to publish, we certainly will. So, short answer is yes; it is absolutely part of the targeted strategy.

Speaker Change: Are you going to be looking to trim exposure to <unk>.

Speaker Change: Properties outside of the U S. Just maybe some insight on your office sales strategy. Please.

Michael Weil: So, um... We think that there are opportunities in the office portfolio, both in the US and Europe, and we are exploring those opportunities, and as we have information to publish, we certainly will. So the short answer is yes, it is absolutely part of the targeted strategy.

Yes.

Speaker Change: <unk>.

Speaker Change: We think that there are opportunities in the office portfolio, both in the U S and Europe.

Speaker Change: And we are exploring those opportunities.

Speaker Change: And as we have.

Speaker Change: Information to publish we certainly will.

Speaker Change: So short answer is yes. It is absolutely part of the targeted strategy.

Speaker Change: Okay.

Speaker Change:

Michael Weil: The renewal spreads within the shopping center portfolio, been some volatility there. I think they were like, if I'm not mistaken, around 2% this quarter. Was there anything that influenced that, that was like one time in nature, or is that a pretty clean number? Well, every quarter it's a little bit different depending on who the primary renewals occur with. If it's a tenant that has an annual escalator on an initial term of 10 or 15 years, their renewal rate is not going to be significantly higher than their expiring rate because they're very at market already. If you have a tenant that maybe has an escalator every five years, when that renewal comes, you're going to see a catch-up with market; it could be 8% like we've seen in prior quarters.

Michael Weil: The renewal spreads within the shopping center portfolio didn't show any volatility there; I think they were, if I'm not mistaken, around 2% this quarter. Was there anything that influenced that? Was that like one-time in nature, or is that a pretty clean number?

Speaker Change: The renewal spreads within the shopping center portfolio.

Speaker Change: Been some volatility there I think they were like if I'm not mistaken around 2%.

Speaker Change: This quarter was there anything that influenced that.

Speaker Change: That was like one time in nature or is that a pretty clean number.

Michael Weil: Well, every quarter it's a little bit different depending on who the primary renewals occur with. If it's a tenant that has an annual escalator on an initial term of 10 or 15 years, their renewal rate is not going to be significantly higher than their expiring rate because they're very much at market already. If you have a tenant that maybe has an... escalator every five years, when that renewal comes, you're going to see a catch up with the market.

Speaker Change: Well every quarter, it's a little bit different depending on who the primary renewals occur with <unk>.

Speaker Change: If it's a tenant that has an annual escalator on an initial term of 10 or 15 years.

Speaker Change: Their renewal rate is not going to be significantly higher than their expiring rate because they're very at market already.

Speaker Change: If you have a tenant that maybe has a.

Speaker Change: Escalator every five years when that renewal comes youre going to see a catch up with market it could be 8% like we've seen in prior quarters.

Michael Weil: It could be 8% like we've seen in prior quarters. So I think it's important that you have the renewal spreads, but in the multi-tenant, it's something that we've always seen quarter over quarter, some variability, but that's really the reason.

Christopher Masterson: So, I think it's important that you have the renewal spreads, but in the multi-tenant, it's something that we've always seen quarter over quarter, some variability. But that's really the reason. Gotcha.

Speaker Change: So I think it's important that you have the renewal spreads but in the multi tenant it's something that we've always seen quarter over quarter some variability.

Speaker Change: But that's that's really the reason.

Mitch Germain: Gotcha. And then I have a couple of model questions, Chris.

Speaker Change: Gotcha, and then a couple of model questions Chris.

Christopher Masterson: And then, a couple of model questions, Chris, to tax benefit. That's one time in nature; is that the way to think about that. Obviously, the savings on the euro tax restructure is going to flow through, but that 3.8 million benefit that's just for the quarter, correct? Yes, that's not a run rate item. That's something our team identified as we were looking to file the prior year return. So, that is not run rate. I would say the run rate going forward is that roughly about two and a half to three million. Okay.

Speaker Change #100: The tax benefit that's onetime in nature or is that the way to think about that obviously the savings on the euro tax restructure is going to flow through but that $3 8 million benefit that just for the quarter correct.

Chris Masterson: The tax benefit, that's one-time in nature, is that the way to think about that? Obviously, the savings on the Euro tax restructure are going to flow through, but that 3.8 million benefit, that's just for the quarter, correct?

Speaker Change #101: Yes, that's not a run rate item, that's something our team identified.

Chris Masterson: Yes, that's not a run rate item. That's something our team identified as we were looking to file the prior year return. So that is not a run rate item. I would say the run rate going forward is roughly about two and a half to three million.

Speaker Change #102: We're looking to file the prior year return so that that is not run rate I would say the run rate going forward is that roughly about two and a half to $3 million.

Mitch Germain: Okay. And then, obviously, it doesn't really affect your bottom line, but I'm just more curious about, you know, looking at your financials, it looks like your non-cash interest expense increased pretty dramatically. Was there anything behind that? I mean, obviously, you've been pretty active, you had the CMBS deal, you paid down debt. You know, anything that kind of is the motivating factor behind that?

Speaker Change #103: Okay, and then obviously it doesn't really affect your bottom line, but I'm just more curious about.

Christopher Masterson: And then, obviously, it doesn't really affect your bottom line, but I'm just more curious about, you know, looking at your financials. It looks like your non-cash interest expense increased pretty dramatically. Was there anything behind that? I mean, obviously, you've been pretty active. You have the CNBS deal; you pay down debt, you know, anything that kind of is the motivating factor behind that? Yes. So, what you'll see is, as we sell properties and we pay down some of the debt that has large discounts, we have to accelerate the discounts as we pay down that debt. So, that's all this quarter, as we pay down some of the legacy RTL debt, which had the discounts.

Speaker Change #104: Looking at your financials it looks like your noncash interest expense increased pretty dramatically.

Speaker Change #105: There anything behind that I mean, obviously, you've been pretty active near the CBS deal you pay down debt.

Speaker Change #104:

Speaker Change #104: That kind of.

Speaker Change #106: It was the motivating factor behind that.

Chris Masterson: Yes, so what you'll see is as we sell properties and pay down some of the debt that has large discounts, we have to accelerate the discounts as we pay down that debt. So that's what we saw this quarter as we paid down some of the legacy RTL debt, which had the discounts.

Speaker Change #107: Yes, so what Youll see is as we sell properties and we pay down some of the debt that has large discounts we have to accelerate the discounts as we pay down that debt. So that you saw this quarter as we paid down some of the legacy RTL debt, which had the discounts.

Chris Masterson: Gotcha, so that just flows off next quarter, is that the way to think about it? It's going to be choppy, depending on

Christopher Masterson: Gosh, so that just flows off next quarter, is that the way to think about it? It's going to be choppy, depending on our sales and the debt that we're paying down. Understood. Thank you.

Speaker Change #108: Got you so that just flows off next quarter or is that the way to think about it.

Chris Masterson: It's going to be choppy, depending on our sales and the debt that we're paying down.

Speaker Change #109: It's going to be choppy, depending on our sales and the debt that we're paying down.

Speaker Change #110: Understood. Thank you.

Mitch Dermain: Thank you, Mitch. Thank you.

Mitch Germain: Thank you Mitch.

Unknown Executive: Thank you. At this time, we've reached the end of our question and answer session, and I'll hand the floor back to management for closing remarks.

Speaker Change #111: Thank you at this time, we've reached the end of our question and answer session and I'll hand, the floor back to management for closing remarks.

Operator: At this time, we've reached the end of our question-answer session.

Michael Weil: I'll hand the floor back to management for closing remarks. Great. Well, first, thanks everybody for taking some time to catch up with G&L. We continue to be very active and successful in our achieving our goals. One thing I did want to just point out again that I think is important is we have no further debt maturities in 2024, as you saw in our deck and prepared comments. But in addition to that, the upcoming debt maturity doesn't occur until the third quarter of 2025. We've already lowered that by $200 million through the disposition strategy. So, we think that we're in really great shape on a balance sheet basis, and we're excited to continue to do this work and really see the value opportunity come to be with G&L.

Michael Weil: Great. Well, first, thanks everybody for taking some time to catch up with G&L. We continue to be very active and successful in achieving our goals. One thing I did want to just point out again that I think is important is that we have no further debt maturities in 2024, as you saw in our deck and prepared comments. But in addition to that, the upcoming debt maturity doesn't occur until the third quarter of 2025.

Speaker Change #112: Great well first thanks, everybody for taking some time to catch up with GNL, we continue to be very active and successful in our.

Speaker Change #113: Achieving our goals one thing I did want to just point out again.

Speaker Change #113: That I think is important is we have.

No further debt maturities in 2024 as you saw in our deck in prepared comments.

Speaker Change #113: But in addition to that the upcoming debt maturity that doesn't occur until third quarter of 2025, we've already lowered that by $200 million.

Michael Weil: We've already lowered that by $200 million through the disposition strategy. So we think that we're in really great shape on a balance sheet basis, and we're excited to continue to do this work and really see the value opportunity come to be with G&L. So thank you all, and we look forward to talking to you during the quarter.

Speaker Change #113: Through the disposition strategy. So we think that we're in really great shape on a balance sheet basis and we're excited.

Speaker Change #113: <unk>.

Speaker Change #113: To do this work and really see the value opportunity come to be with GNL. So thank you all and we look forward to talk to you through the quarter.

Michael Weil: So, thank you all, and we look forward to talking you through the quarter.

Speaker Change #113: Yes.

Operator: This will conclude today's conference. May this catch your lines at this time. Thank you for your participation.

Unknown Executive: This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Speaker Change #114: This will conclude today's conference you may disconnect. Your lines at this time and thank you for your participation and have a wonderful day.

Operator: Have a wonderful...