Global Net Lease Inc

Previous wording

We are a REIT that focuses on acquiring and managing a global portfolio of income producing net lease assets across the U.S., and Western and Northern Europe. Historically, we focused on acquiring and managing a globally diversified portfolio of strategically-located commercial real estate properties, which consisted primarily of mission-critical, single tenant net-lease assets. As a result of acquiring RTL in September 2023, we acquired a diversified portfolio of 989 properties consisting of primarily necessity-based retail single-tenant and multi-tenant properties located in the U.S. Until September 12, 2023, we were managed by the former Advisor, who managed our day-to-day business with the assistance of the Property Manager, who managed and leased our properties to third parties. Prior to September 12, 2023, the former Advisor and the Property Manager were under common control with AR Global, and these related parties had historically received compensation and fees for various services provided to us. On September 12, 2023, we internalized our advisory and property management functions as well as the advisory and property management functions of RTL as a result of the Internalization Merger (as defined below). For additional details on our acquisition of RTL and the internalization of our advisory and property management services and the advisory and property management functions of RTL, also see Note 1 — Organization, Note 3 — The Mergers and Note 12 — Related Party Transactionsto our consolidated financial statements included in this Annual Report on Form 10-K.

Current wording

We are an internally managed REIT for U.S. federal income tax purposes that focuses on acquiring and managing a global portfolio of income producing net lease assets across the U.S., and Western and Northern Europe. Historically, we focused on acquiring and managing a globally diversified portfolio of strategically-located commercial real estate properties, which consisted primarily of mission-critical, single tenant net-lease assets. As a result of acquiring RTL in the quarter ended September 2023, we acquired a diversified portfolio of 989 properties consisting of primarily necessity-based retail single-tenant and multi-tenant properties located in the U.S. Until September 12, 2023, we were managed by the former Advisor, who managed our day-to-day business with the assistance of the Property Manager, who managed and leased our properties to third parties. Prior to September 12, 2023, the former Advisor and the Property Manager were under common control with AR Global, and these related parties had historically received compensation and fees for various services provided to us. On September 12, 2023, we internalized our advisory and property management functions as well as the advisory and property management functions of RTL. For additional information on the acquisition of RTL and the internalization of our advisory and property management services and RTL’s advisory and property management functions, see Note 3 — The Mergers and Note 12 — Related Party Transactionsto our consolidated financial statements included in this Annual Report on Form 10-K.

Previous wording

As of December 31, 2023, we owned 1,296 properties consisting of 66.8 million rentable square feet, which were 96% leased, with a weighted-average remaining lease term of 6.8 years. Based on the percentage of annualized rental income on a straight-line basis as of December 31, 2023, approximately 80% of our properties were located in the U.S. and Canada and approximately 20% were located in Europe. In addition, as of December 31, 2023, our portfolio was comprised of 32% Industrial & Distribution properties, 27% Multi-Tenant retail properties, 21% Single-Tenant Retail properties and 20% Office properties. These represent our four reportable segments and the percentages are calculated using annualized straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of December 31, 2023. The straight-line rent includes amounts for tenant concessions.

Current wording

As of December 31, 2024, we owned 1,121 properties consisting of 60.7 million rentable square feet, which were 97% leased, with a weighted-average remaining lease term of 6.2 years. Based on the percentage of annualized rental income on a straight-line basis as of December 31, 2024, approximately 80% of our properties were located in the U.S. and Canada and approximately 20% were located in Europe. In addition, as of December 31, 2024, our portfolio was comprised of 34% Industrial & Distribution properties, 28% Multi-Tenant retail properties, 21% Single-Tenant Retail properties and 17% Office properties. These represent our four reportable segments and the percentages are calculated using annualized straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of December 31, 2024. The straight-line rent includes amounts for tenant concessions.

Previous wording

Our portfolio is leased to primarily “Investment Grade” rated tenants in well established markets in the U.S. and Europe. A total of 57.6% of our rental income on an annualized straight-line basis for leases in place as of December 31, 2023 was derived from Investment Grade rated tenants, comprised of 33.4% leased to tenants with an actual investment grade rating and 24.2% leased to tenants with an implied investment grade rating. For our purposes, “Investment Grade” includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied investment grade may include actual ratings of the tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or tenants that are identified as investment grade by using a proprietary Moody’s Analytics tool, which generates an implied rating by measuring an entity’s probability of default. Ratings information is as of December 31, 2023.

Current wording

Our single-tenant properties and our multi-tenant anchor spaces are leased to primarily “Investment Grade” rated tenants in well established markets in the U.S. and Europe. For our purposes, “Investment Grade” includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied investment grade may include actual ratings of the tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or tenants that are identified as investment grade by using a proprietary Moody’s Analytics tool, which generates an implied rating by measuring an entity’s probability of default. Ratings information is as of December 31, 2024. A total of 60.5% of our rental income on an annualized straight-line basis for leases in place as of December 31, 2024 was derived from Investment Grade rated tenants, comprised of 31.4% leased to tenants with an actual investment grade rating and 29.1% leased to tenants with an implied investment grade rating.

Previous wording

Our revenues, which are derived primarily from lease contracts, which include rents that each tenant pays in accordance with the terms of each lease agreement and are reported on a straight-line basis over the initial term of the lease. As of December 31, 2023, these leases had a weighted-average remaining lease term of 6.8 years. Because many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record a receivable for, and include in revenues, unbilled rent receivables that we will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. As of December 31, 2023 and 2022, our cumulative straight-line rents receivable in the consolidated balance sheets was $84.3 million, and $73.0 million, respectively. For the years ended December 31, 2023, 2022 and 2021, our revenue from tenants included the impact of unbilled rental revenue of $10.4 million, $9.6 million and $5.7 million, respectively, to adjust contractual rent to straight-line rent.

Current wording

Our revenues, which are derived primarily from lease contracts, which include rents that each tenant pays in accordance with the terms of each lease agreement and are reported on a straight-line basis over the initial term of the lease. As of December 31, 2024, these leases had a weighted-average remaining lease term of 6.2 years. Because many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record a receivable for, and include in revenues, unbilled rent receivables that we will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. As of December 31, 2024 and 2023, our cumulative straight-line rents receivable in the consolidated balance sheets was $99.5 million, and $84.3 million, respectively. For the years ended December 31, 2024, 2023 and 2022, our revenue from tenants included the impact of unbilled rental revenue of $19.2 million, $10.4 million and $9.6 million, respectively, to adjust contractual rent to straight-line rent.

Previous wording

In accordance with lease accounting rules, we record uncollectible amounts as reductions in revenue form tenants. Amounts recorded as reductions of revenue during the years ended December 31, 2023, 2022 and 2021 totaled and $3.5 million, $0.7 million, and $1.1 million, respectively.

Current wording

In accordance with lease accounting rules, we record uncollectible amounts as reductions in revenue form tenants. Amounts recorded as reductions of revenue during the years ended December 31, 2024, 2023 and 2022 totaled and $3.4 million, $3.5 million, and $0.7 million, respectively.

Previous wording

Disposal of real estate investments representing a strategic shift in operations that will have a major effect on our operations and financial results are required to be presented as discontinued operations in our consolidated statements of operations. No properties were presented as discontinued operations as of December 31, 2023 and 2022. Properties that are intended to be sold are designated as “held for sale” on our consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year. We evaluate probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. As of December 31, 2023, we had two properties classified as held for sale. We did not have any assets held for sale as of December 31, 2022.

Current wording

Disposal of real estate investments representing a strategic shift in operations that will have a major effect on our operations and financial results are required to be presented as discontinued operations in our consolidated statements of operations. No properties were presented as discontinued operations as of December 31, 2024 and 2023. Properties that are intended to be sold are designated as “held for sale” on our consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year. We evaluate probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. As of December 31, 2024, we had 13 properties classified as held for sale. We had two properties classified as held for sale as of December 31, 2023.

Previous wording

In both a business combination and an asset acquisition, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an as- if vacant basis. Intangible assets may include the value of in-place leases, and above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above- or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. Other than the Mergers, which were accounted for as a business combination, all of the other acquisitions during the years ended December 31, 2023, 2022 and 2021 were asset acquisitions.

Current wording

In both a business combination and an asset acquisition, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an as- if vacant basis. Intangible assets may include the value of in-place leases, and above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above- or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. Other than the Mergers, which were accounted for as a business combination, all of the other acquisitions during the years ended December 31, 2023 and 2022 were asset acquisitions. There were no acquisitions during the year ended December 31, 2024.

Previous wording

In accordance with the lease accounting standard, all of our leases as lessor prior to adoption of ASC 842 were accounted for as operating leases and we continued to account for them as operating leases under the transition guidance. We evaluate new leases originated after the adoption date (by us or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than major part of remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. During the three-year period ended December 31, 2023, we did not have any leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules.

Current wording

In accordance with the lease accounting standard, all of our leases as lessor prior to adoption of ASC 842 were accounted for as operating leases and we continued to account for them as operating leases under the transition guidance. We evaluate new leases originated after the adoption date (by us or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than major part of remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. During the three-year period ended December 31, 2024, we did not have any leases as a lessor that would be considered as sales-type leases or financings.

Previous wording

As of December 31, 2023, we had two parcels of land leased to tenants that qualify as financing leases which were acquired in the REIT Merger. The carrying value of these leases was $6.6 million as of December 31, 2023 and the amounts are included in prepaid expenses and other assets on our consolidated balance sheet as of December 31, 2023. Income of $0.2 million relating to these two leases is included in revenue from tenants in our consolidated statement of operations for the year ended December 31, 2023.

Current wording

As of December 31, 2024, we had two parcels of land leased to tenants that qualify as financing leases which were acquired in the REIT Merger. The carrying value of these leases was $6.7 million and $6.6 million as of December 31, 2024 and 2023, respectively, and the amounts are included in prepaid expenses and other assets on our consolidated balance sheets as of December 31, 2024 and 2023. Income of $0.7 million and $0.2 million relating to these two leases is included in revenue from tenants in our consolidated statement of operations for the years ended December 31, 2024 and 2023, respectively.

Previous wording

The Company is the lessee under certain land leases which were previously classified prior to adoption of ASC 842 and will continue to be classified as operating leases under transition elections unless subsequently modified, as well as land leases and other operating leases that were acquired or entered into in connection with the Mergers. These leases are reflected on the balance sheet as right of use assets and operating lease liabilities and the rent expense is reflected on a straight-line basis over the lease term.

Current wording

We are the lessee under certain land leases which were previously classified prior to adoption of ASC 842 and will continue to be classified as operating leases under transition elections unless subsequently modified, as well as land leases and other operating leases that were acquired or entered into in connection with the Mergers. These leases are reflected on the balance sheet as right of use assets and operating lease liabilities and the rent expense is reflected on a straight-line basis over the lease term.

Previous wording

Deferred leasing commissions are recorded over the terms of the related leases. Amounts related to leasing commissions incurred from third parties are recorded in depreciation and amortization. Amounts related to leasing commissions incurred from the former Advisor are recorded within operating fees to related parties in the consolidated statements of operations.

Current wording

Deferred leasing commissions are recorded over the terms of the related leases. The amortization expense related to leasing commissions incurred from third parties are recorded in depreciation and amortization. Prior to the Mergers, amortization expense related to leasing commissions incurred from the former Advisor were recorded within operating fees to related parties in the consolidated statements of operations. As a result of the Mergers, we no longer pay any leasing commissions to the former Advisor.

Previous wording

We evaluate goodwill for impairment at least annually or upon the occurrence of a triggering event. A triggering event is an event or circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We evaluated the company's goodwill upon the completion of the Mergers as we viewed that as a triggering event, and goodwill was not impaired based on that assessment. We also performed our annual impairment evaluation in the fourth quarter of 2023 to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Based on our assessment, we determined that the goodwill was not impaired as of December 31, 2023. We will continue to assess for triggering events. Should any triggering event occur, we would evaluate the carrying value of our goodwill by segment through an impairment test. If impairment is warranted, the charge would be recorded through the combined income statement as a reduction to earnings.

Current wording

We will continue to assess for triggering events. A triggering event is an occurrence or circumstance that indicates it is more likely than not that goodwill may be impaired. In such cases, an interim impairment test is required before the next annual evaluation. Should any triggering event occur, we would evaluate the carrying value of our goodwill by segment through an impairment test. If impairment is warranted, the charge would be recorded through the consolidated statement of operations as a reduction to earnings. We assessed the potential sale of 100 of our multi-tenant retail properties pursuant to the RCG PSA (see Note 17 — Subsequent Eventsto our consolidated financial statements included in this Annual Report on Form 10-K for additional information) as a triggering event and determined that goodwill was not impaired as of December 31, 2024. We will continue to monitor the multi-tenant retail segment’s goodwill if and when the RCG Multi-Tenant Retail Disposition closes in 2025.

Previous wording

We maintain stock-based incentive plans under which our directors, officers, employees, consultants and, historically, entities that provide services to us are eligible to receive awards. Awards granted thereunder are accounted for under the guidance for employee share-based payments. The cost of services received in exchange for a stock award is measured at the grant date fair value of the award and the expense for such awards is included in equity-based compensation on consolidated statements of operations and is recognized over the vesting period or when the requirements for exercise of the award have been met.

Current wording

We have stock-based incentive plans under which our directors, officers, employees, consultants or entities that provide services to us are, or have historically been, eligible to receive awards. Awards granted thereunder are accounted for under the guidance for employee share-based payments. The cost of services received in exchange for a stock award is measured at the grant date fair value of the award and the expense for such awards is included in equity-based compensation in the consolidated statements of operations and is recognized over the vesting period or when the requirements for exercise of the award have been met.

Previous wording

We have issued restricted shares of Common Stock (“Restricted Shares”), RSUs and, during the three months ended December 31, 2023, PSUs. Also, although none remain outstanding as of December 31, 2023, we historically had issued long-term incentive plan units of limited partner interest in the OP (“GNL LTIP Units”) (see below for more information). For additional information on all of the equity-based compensation awards issued, see Note 13 — Equity-Based Compensation to our consolidated financial statements included in this Annual Report on Form 10-K.

Current wording

We have historically issued Restricted Shares, restricted stock units in respect of shares of Common Stock (“RSUs”), and performance stock units (“PSUs”). Also, although none remain outstanding as of December 31, 2024 or 2023, we historically had issued long-term incentive plan units of limited partner interest in the OP (“GNL LTIP Units”). For additional information on all of the equity-based compensation awards issued by us, see Note 13 — Equity-Based Compensationto our consolidated financial statements included in this Annual Report on Form 10-K.

Previous wording

In our Multi-Tenant Retail segment, we own, manage and lease multi-tenant properties where we generally pay for the property operating expenses for those properties and most of our tenants are required to pay their pro rata share of property operating expenses.

Current wording

In our Multi-Tenant Retail segment, we own, manage and lease multi-tenant properties where we generally pay for the property operating expenses for those properties and most of our tenants are required to pay their pro rata share of property operating expenses. We will dispose of substantially all of the properties in our Multi-Tenant Retail segment if the RCG Multi-Tenant Retail Disposition is consummated in accordance with the terms contemplated by the RCG PSA, and following the final closing we will no longer report results from the Multi-Tenant Retail segment as an operating segment or in the consolidated operating results of the Company. There can be no assurances that the RCG Multi-Tenant Retail Disposition will be consummated on the contemplated terms, if at all.

Previous wording

As more fully discussed in Note 1 — Organizationto our consolidated financial statements included in this Annual Report on Form 10-K, during the quarter ended September 30, 2023 we completed the Mergers which will affect comparable results from operations until the properties acquired have been held for all periods presented. As a result, comparisons of our period to period financial information as set forth herein may not be meaningful. The historical financial information included herein as of any date, or for any periods, prior to September 12, 2023 represents our financial information, prior to the Mergers, on a stand-alone basis.

Current wording

As more fully discussed in Note 1 — Organizationand Note 3 — The Mergersto our consolidated financial statements included in this Annual Report on Form 10-K, during the quarter ended September 30, 2023 we completed the Mergers which will affect comparable results from operations until the properties acquired have been held for all periods presented. As a result, comparisons of our period to period financial information as set forth herein may not be meaningful. The historical financial information included herein as of any date, or for any periods, prior to September 12, 2023 represents our financial information, prior to the Mergers, on a stand-alone basis.

Previous wording

Net loss attributable to common stockholders was $239.3 million for the year ended December 31, 2023, as compared to $8.4 million for the year ended December 31, 2022. The change in net loss income attributable to common stockholders is discussed in detail for each line item of the consolidated statements of operations in the sections that follow.

Current wording

Net loss attributable to common stockholders was $175.3 million for the year ended December 31, 2024, as compared to $239.3 million for the year ended December 31, 2023. The change in net loss attributable to common stockholders is discussed in detail for each line item of the consolidated statements of operations in the sections that follow.

Previous wording

Revenue from tenants in our Industrial & Distribution segment was $220.1 million and $211.5 million for the years ended December 31, 2023 and 2022, respectively. The increase in revenue from tenants was primarily driven by revenue of $9.7 million attributable to properties acquired from RTL on the Acquisition Date, with minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2023, when compared to the year ended December 31, 2022.

Current wording

Revenue from tenants in our Industrial & Distribution segment was $237.6 million and $220.1 million for the years ended December 31, 2024 and 2023, respectively. The increase in revenue from tenants was primarily driven by a full year of revenue attributable to properties acquired from RTL on the Acquisition Date for the year ended December 31, 2024, with minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2024, when compared to the year ended December 31, 2023.

Previous wording

Revenue from tenants in our Multi-Tenant Retail segment was $79.8 million for the year ended December 31, 2023 and there was no corresponding revenue in the prior year period since the revenue is all attributable to properties acquired from RTL on the Acquisition Date.

Current wording

Revenue from tenants in our Multi-Tenant Retail segment was $259.3 million and $79.8 million for the years ended December 31, 2024 and 2023, respectively. The increase in revenue from tenants was driven by a full year of revenue attributable to properties acquired from RTL on the Acquisition Date for the year ended December 31, 2024.

Previous wording

Revenue from tenants in our Single-Tenant Retail segment was $60.6 million and $12.4 million for the years ended December 31, 2023 and 2022, respectively. The increase was primarily due to revenue of $42.5 million attributable to properties acquired from RTL on Acquisition Date and revenue from other properties acquired since January 1, 2022, with minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2023, when compared to the year ended December 31, 2022.

Current wording

Revenue from tenants in our Single-Tenant Retail segment was $164.5 million and $65.5 million for the years ended December 31, 2024 and 2023, respectively. The increase was primarily due to a full year of revenue attributable to properties acquired from RTL on the Acquisition Date for the year ended December 31, 2024, with minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2024, when compared to the year ended December 31, 2023.

Previous wording

Revenue from tenants in our Office segment was $154.6 million and $154.9 million for the years ended December 31, 2023 and 2022, respectively. The minor change period-over-period was primarily driven by a decrease in revenue from properties disposed since January 1, 2022, partially offset by revenue attributable to properties acquired from RTL on the Acquisition Date and revenue from other properties acquired since January 1, 2022, as well as a minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2023, when compared to the year ended December 31, 2022.

Current wording

Revenue from tenants in our Office segment was $143.6 million and $149.7 million for the years ended December 31, 2024 and 2023, respectively. The decrease was primarily driven by dispositions during the year ended December 31, 2024, partially offset by a full period of revenue in the year ended December 31, 2024 attributable to properties acquired from RTL on the Acquisition Date for the year ended December 31, 2024, with minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2024, when compared to the year ended December 31, 2023.

Previous wording

Property operating expenses in our Industrial & Distribution segment were $15.5 million and $13.7 million for the years ended December 31, 2023 and 2022, respectively. The increase was primarily due to an increase in property operating expenses resulting from properties acquired from RTL on the Acquisition Date, with minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2023, when compared to the year ended December 31, 2022.

Current wording

Property operating expenses in our Industrial & Distribution segment were $21.8 million and $15.5 million for the years ended December 31, 2024 and 2023, respectively. The change was primarily due to the timing of our reimbursable costs and a full period of expenses attributable to properties acquired from RTL on the Acquisition Date for the year ended December 31, 2024, with minimal impact from dispositions and the year-over-year change in average foreign exchange rates during the year ended December 31, 2024, when compared to the year ended December 31, 2023.

Previous wording

Property operating expenses in our Multi-Tenant Retail were $27.0 million for the year ended December 31, 2023 and there were no corresponding property operating expenses in the prior year period since the expenses are all attributable to properties acquired from RTL on the Acquisition Date.

Current wording

Property operating expenses in our Multi-Tenant Retail were $86.0 million and $27.0 million for the years ended December 31, 2024 and 2023, respectively. The increase in property operating expenses was driven by a full period of expenses attributable to properties acquired from RTL on the Acquisition Date for the year ended December 31, 2024.

Previous wording

Property operating expenses in our Single-Tenant Retail were $5.3 million and $0.8 million for the years ended December 31, 2023 and 2022, respectively. The increase was primarily due to an increase in property operating expenses of $4.2 million resulting from properties acquired from RTL on the Acquisition Date, with minimal impact from the year-over-year change in average foreign exchange rates, when compared to the year ended December 31, 2022.

Current wording

Property operating expenses in our Single-Tenant Retail were $15.8 million and $6.0 million for the years ended December 31, 2024 and 2023, respectively. The increase was primarily due to an increase in property operating expenses resulting from a full period of expenses attributable to properties acquired from RTL on the Acquisition Date for the year ended December 31, 2024, with minimal impact from the year-over-year change in average foreign exchange rates, when compared to the year ended December 31, 2023.

Previous wording

Property operating expenses in our Office segment were $20.2 million and $18.4 million for the years ended December 31, 2023 and 2022, respectively. The increase was primarily due to an increase in property operating expenses resulting from properties acquired from RTL on the Acquisition Date and the year-over-year change in average foreign exchange rates, when compared to the year ended December 31, 2022.

Current wording

Property operating expenses in our Office segment were $18.9 million and $19.4 million for the years ended December 31, 2024 and 2023, respectively. The decrease was primarily due to the timing of our reimbursable expenses , with minimal impact from the year-over-year change in average foreign exchange rates,when compared to the year ended December 31, 2023.

Previous wording

Upon the closing of the Mergers, we no longer pay asset management fees to the former Advisor or property management fees to the Property Manager and we internalized our management functions. While we no longer pay the costs of the various fees and expense reimbursements previously paid to the former Advisor and the Property Manager, after the Internalization Merger, our expenses now include the compensation and benefits of our officers, employees, and consultants, as well as overhead expenses, previously paid by those entities in managing our business and operations and are being recorded in general and administrative expenses from the Acquisition Date forward, including in the form of equity compensation.

Current wording

Due to the completion of the Internalization Merger there were no operating fees paid to related parties in the year ended December 31, 2024. Upon the closing of the Mergers, we no longer pay asset management fees to the former Advisor or property management fees to the Property Manager and we internalized our management functions. While we no longer pay the costs of the various fees and expense reimbursements previously paid to the former Advisor and the Property Manager, after the Internalization Merger, our expenses now include the compensation and benefits of our officers, employees, and consultants, as well as overhead expenses, previously paid by those entities in managing our business and operations, which are recorded in general and administrative expenses from the Acquisition Date forward, including in the form of equity compensation. Operating fees paid to related parties were $28.3 million for the year ended December 31, 2023. For additional information, see Note 12 — Related Party Transactions to our consolidated financial statements included in this Annual Report on Form 10-K.

Previous wording

We recognized $54.5 million and $0.2 million of acquisition, transaction and other costs during the years ended December 31, 2023 and 2022, respectively. The increase was due to advisory, legal and other professional costs that were directly related to the Mergers.

Current wording

We recognized $6.0 million and $54.5 million of acquisition, transaction and other costs during the years ended December 31, 2024 and 2023, respectively. The decrease was due to higher advisory, legal and other professional costs incurred in the year ended December 31, 2023 that were directly related to the Mergers.

Previous wording

For the year ended December 31, 2023 we recognized settlement costs of $29.7 million which consists of the cash reimbursement of approximately $8.8 million of expenses to the Blackwells/Related Parties and non-cash equity expense of approximately $20.9 million for Common Stock issued to Blackwells under the Cooperation Agreement (as defined in Note 10 — Stockholders’ Equityto our consolidated financial statements in this Annual Report on Form 10-K).

Current wording

We recognized settlement costs of $29.7 million during the year ended December 31, 2023, which related to the cash reimbursement of approximately $8.8 million of expenses to the Blackwells/Related Parties (as defined in Note 10 — Stockholders’ Equity to our consolidated financial statements in this Annual Report on Form 10-K) and non-cash equity expense of approximately $20.9 million for Common Stock issued to Blackwells under the Cooperation Agreement (as defined in Note 10 — Stockholders’ Equityto our consolidated financial statements in this Annual Report on Form 10-K).

Previous wording

General and administrative expenses were $40.2 million and $17.7 million for the years ended December 31, 2023 and 2022, respectively, primarily consisting of professional fees including audit and taxation related services, employee compensation/payroll expenses, board member compensation, and directors’ and officers’ liability insurance. The overall increase in general and administrative expenses was primarily due to the internalization of our management functions (as discussed above), such as employee compensation/payroll expenses, and as a result of higher legal expenses and other costs in the year ended December 31, 2023.

Current wording

General and administrative expenses were $57.7 million and $40.2 million for the years ended December 31, 2024 and 2023, respectively, which primarily consist of employee compensation/payroll expenses, professional fees including audit and taxation related services, board member compensation, and directors’ and officers’ liability insurance. The overall increase in general and administrative expenses was primarily due to a full period of management expenses for the year ended December 31, 2024 as a result of the Internalization.

Previous wording

During the years ended December 31, 2023 and 2022, we recognized equity-based compensation expense of $17.3 million and $12.1 million, respectively. Equity-based compensation in both periods consists of (i) amortization expense related to the GNL LTIPs issued under the 2021 OPP (including accelerated vesting as described below); (ii) amortization of Restricted Shares granted to employees of the former Advisor or its affiliates who were involved in providing services to us prior to the Internalization, some of which vested at the closing of the Mergers; (iii) amortization of RSUs granted to our employees and independent directors. Equity-based compensation expense in the year ended December 31, 2023 also includes expense related to the PSUs, which were granted in November 2023.

Current wording

During the years ended December 31, 2024 and 2023, we recognized equity-based compensation expense of $8.9 million and $17.3 million, respectively. Equity-based compensation in both periods consists of (i) amortization of Restricted Shares granted to employees of the former Advisor or its affiliates who were involved in providing services to us prior to the Internalization, some of which vested at the closing of the Mergers; (ii) amortization of RSUs granted to our employees (after the Internalization) and our independent directors, and (iii) amortization expense related to PSUs that were issued in October of 2023. Equity-based compensation for the year ended December 31, 2023 included amortization expense for Restricted Shares, RSUs, PSUs and expense related to the 2021 OPP, which expired on September 11, 2023. The decrease in the year ended December 31, 2024 as compared to the prior year, was due to higher compensation expense recorded in the third quarter of 2023 as a result of an accelerated amortization expense due to a modification to the 2021 OPP (for additional information, see Note 13 — Equity-Based Compensation to our consolidated financial statements in this Annual Report on Form 10-K).

Previous wording

Depreciation and amortization expense was $222.3 million and $154.0 million for the years ended December 31, 2023 and 2022, respectively. The increase was due to additional depreciation and amortization expense recorded as a result of the impact of the REIT Merger and the year-over-year change in average foreign exchange rates during the year ended December 31, 2023, when compared to the year ended December 31, 2022.

Current wording

Depreciation and amortization expense was $349.9 million and $222.3 million for the years ended December 31, 2024 and 2023, respectively. The increase was due to the full year period of additional depreciation and amortization expense recorded as a result of the impact of the REIT Merger for a full year period in the year ended December 31 2024 and the year-over-year change in average foreign exchange rates during the year ended December 31, 2024, when compared to the year ended December 31, 2023.

Previous wording

(Loss) Gain on Dispositions of Real Estate Investments

Current wording

Gain (Loss) on Dispositions of Real Estate Investments

Previous wording

During the year ended December 31, 2023, we sold eleven properties, ten of which were acquired in the REIT Merger, and recorded an aggregate loss of $1.7 million.

Current wording

During the year ended December 31, 2023, we sold 11 properties, 10 of which were acquired in the REIT Merger, and recorded an aggregate loss of $1.7 million.

Previous wording

Interest expense was $179.4 million and $97.5 million for the years ended December 31, 2023 and 2022, respectively. The increase was due to the increase in the amount of our total gross debt outstanding of $2.4 billion as of December 31, 2022 to $5.4 billion as of December 31, 2023 and an increase in the weighted-average effective interest rate of our total debt from 4.0% as of December 31, 2022 to 4.8% as of December 31, 2023. The increase in the amount of our gross debt outstanding was primarily due to debt assumed in the REIT Merger and additional borrowings on our Revolving Credit Facility to repay amounts outstanding under RTL’s credit facility at the time of the REIT Merger.

Current wording

Interest expense was $326.9 million and $179.4 million for the years ended December 31, 2024 and 2023, respectively. The increase was due to higher non-cash amortization expense due to the amortization of discounts recorded on debt acquired in the REIT Merger. Our total gross debt outstanding was $4.7 billion as of December 31, 2024 as compared to $5.4 billion as of December 31, 2023. The weighted-average effective interest rate of our total debt was 4.8% as of each of December 31, 2024 and 2023.

Previous wording

As of the year ended December 31, 2023, approximately 10% of our total debt outstanding was denominated in EUR, 8% of our total debt outstanding was denominated in GBP and 1% was denominated in CAD. As of December 31, 2022, approximately 23% of our total debt outstanding was denominated in EUR, and 16% of our total debt outstanding was denominated in GBP.

Current wording

The increase in interest expense was also impacted by the year-over-year change in average foreign exchange rates during the year ended December 31, 2024, when compared to the year ended December 31, 2023. As of the year ended December 31, 2024, approximately 11% of our total debt outstanding was denominated in EUR, 9% of our total debt outstanding was denominated in GBP and 1% was denominated in CAD. As of December 31, 2023, approximately 10% of our total debt outstanding was denominated in EUR, 8% of our total debt outstanding was denominated in GBP, and 1% was denominated in CAD.

Previous wording

The loss on extinguishment of debt of $1.2 million during the year ended December 31, 2023 was primarily due to early pre-payment penalties from certain mortgage paydowns. The loss on extinguishment of debt of $2.0 million during the year ended December 31, 2022 primarily related to the early payoff of our mortgage loan that was secured by our properties located in France.

Current wording

The loss on extinguishment and modification of debt of $1.2 million during the year ended December 31, 2023 was primarily due to early pre-payment penalties from certain mortgage paydowns.

Previous wording

The loss on derivative instruments of $3.7 million and gain of $18.6 million for the years ended December 31, 2023 and 2022, respectively, reflect the marked-to-market impact from foreign currency and interest rate derivative instruments used to hedge the investment portfolio from currency and interest rate movements, and was mainly impacted by currency rate changes in the GBP and EUR compared to the USD. For the year ended December 31, 2023, the loss on derivative instruments consisted of unrealized losses of $7.3 million and realized gains of $3.6 million. For the year ended December 31, 2022, the gain on derivative instruments consisted of unrealized gains of $9.4 million and realized gains of $9.2 million. The overall gain (or loss) on derivative instruments directly impact our results of operations since they are recorded on the gain on derivative instruments line item in our consolidated results of operations. However, only the realized gains are included AFFO (as defined below).

Current wording

The gain (loss) on derivative instruments was a gain of $4.2 million for the year ended December 31, 2024 and a loss of $3.7 million for the year ended December 31, 2023. These amounts reflect the marked-to-market impact from foreign currency and interest rate derivative instruments used to hedge the investment portfolio from currency and interest rate movements, and was mainly impacted by currency rate changes in the GBP and EUR compared to the USD. For the year ended December 31, 2024, the gain on derivative instruments consisted of unrealized gains of $3.4 million and realized gains of $0.8 million. For the year ended December 31, 2023, the loss on derivative instruments consisted of unrealized losses of $7.3 million and realized gains of $3.6 million. The overall gain (or loss) on derivative instruments directly impact our results of operations since they are recorded on the gain on derivative instruments line item in our consolidated results of operations. However, only the realized gains are included AFFO (as defined below).

Previous wording

Unrealized Income (Loss) on Undesignated Foreign Currency Advances and Other Hedge Ineffectiveness

Current wording

Unrealized Gains on Undesignated Foreign Currency Advances and Other Hedge Ineffectiveness

Previous wording

We recorded income of $2.4 million on undesignated foreign currency advances and other hedge ineffectiveness, related to the accelerated reclassification of amounts in other comprehensive income to earnings as a result of certain hedged forecasted transactions becoming probable not to occur, for the year ended December 31, 2022. During the year ended December 31, 2023, we did not record any amounts due to currency changes on the undesignated excess foreign currency advances over the related net investments.

Current wording

We recorded gains of $3.2 million on undesignated foreign currency advances and other hedge ineffectiveness, related to the accelerated reclassification of amounts in other comprehensive income to earnings as a result of certain hedged forecasted transactions becoming probable not to occur, for the year ended December 31, 2024. During the year ended December 31, 2023, we did not record any amounts due to currency changes on the undesignated excess foreign currency advances over the related net investments.

Previous wording

Although as a REIT we generally do not pay U.S. federal income taxes on the amount of REIT taxable income that is distributed to shareholders, we recognize income tax (expense) benefit domestically for state taxes and local income taxes incurred, if any, and also in foreign jurisdictions in which we own properties. In addition, we perform an analysis of potential deferred tax or future tax benefit and expense as a result of book and tax differences and timing differences in taxes across jurisdictions. Income tax expense was $14.5 million and $11.0 million for the years ended December 31, 2023 and 2022, respectively. For additional information, see Note 16 — Income Taxes to our consolidated financial statements included in this Annual Report on Form 10-K.

Current wording

Although as a REIT we generally do not pay U.S. federal income taxes on the amount of REIT taxable income that is distributed to shareholders, we recognize income tax (expense) benefit domestically for state taxes and local income taxes incurred, if any, and also in foreign jurisdictions in which we own properties. In addition, we perform an analysis of potential deferred tax or future tax benefit and expense as a result of book and tax differences and timing differences in taxes across jurisdictions. Income tax expense was $4.4 million and $14.5 million for the years ended December 31, 2024 and 2023, respectively. For additional information, see Note 16 — Income Taxes to our consolidated financial statements included in this Annual Report on Form 10-K.