Global Net Lease Closes Modiv Acquisition

Global Net Lease has completed its acquisition of Modiv Industrial Inc. in an all-stock deal that valued Modiv’s mostly industrial net-lease property portfolio at approximately $535 million.

The transaction is another milestone in GNL’s transformation strategy to increase its industrial holdings to roughly 50 percent of its overall portfolio.

The move is also another step to enhance GNL’s portfolio quality and durability of its cash flows. The transaction is expected to be immediately 4 percent accretive to adjusted funds from operations per share. Additional earnings will come from annual contractual rent increases averaging 2.4 percent.

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The planned acquisition was announced in early May. The closing followed approval by Modiv stockholders at a special meeting Monday. GNL stockholders did not need to vote on the transaction.

Under the terms of the merger agreement, each share of Modiv common stock was converted into the right to receive 1.975 newly issued shares of GNL common stock. Each share of Modiv preferred stock converted into the right to receive an amount in cash equal to $25, plus any accrued and unpaid dividends. Once the transaction closed, Modiv’s common stock and preferred stock were delisted from the New York Stock Exchange.

Modiv increases GNL’s industrial holdings

The deal adds 40 Modiv net-lease properties totaling approximately 4.2 million square feet, according to an SEC filing. There are 37 industrial properties, representing approximately 82 percent of the portfolio, and three non-core properties, which comprise roughly 18 percent of the portfolio, as of June 30.

GNL reported that its portfolio as of June 30 consisted of 798 properties spanning 40 million square feet. The majority—74 percent—of the assets are in the United States and Canada, with European holdings making up the remaining 26 percent. The portfolio is 97 percent occupied with 63 percent investment-grade tenants.

The REIT’s top overall tenant is FedEx. Other major tenants include Whirlpool, ING, Dollar General, Kroger and Truist. Boots, the largest health and beauty pharmacy chain in the U.K., is a top tenant in Europe.

Michael Weil, GNL CEO, said in prepared remarks that the firm believes the Modiv industrial assets will increase the REIT’s industrial exposure to approximately 50 percent of annual straight-line rent while extending weighted average remaining lease term.

One of Modiv’s largest industrial tenants was Lindsay Precast, a manufacturer of engineered precast concrete and prefabricated steel structures. Modiv completed a $56.1 million acquisition of an eight-property Lindsay Precast portfolio in April 2022.

Transforming GNL through M&A and dispositions

GNL announced in 2024 that it would begin transitioning its portfolio away from retail and office holdings as it focused on becoming a pure-play single-tenant net lease company. Last June, the company closed on a $1.8 billion transaction to sell a 99-property, 14 million-square-foot multi-tenant retail portfolio to RCG Ventures LLC. The sale was completed in three phases.

In August 2024, GNL sold The Plant, a 367,000-square-foot super regional retail center in San Jose, Calif., to a partnership between Arc Capital Partners and Milan Capital Management for $95 million.

Also that summer, the firm sold a 366,000-square-foot office property in Shinfield Park, Reading, U.K., for more than $27 million. The REIT had owned the Foster Wheeler office asset for about eight years.