NEW YORK - Global Net Lease , Inc. (NYSE: NYSE:GNL), a real estate investment trust, has successfully sold a portfolio of nine cold storage properties for $170 million. The properties, leased to subsidiaries of Americold Realty Trust (NYSE: NYSE:COLD), were offloaded at a 7.88% cash capitalization rate, with an average of 3.3 years remaining on the leases.
The transaction, completed on Thursday, is part of a previously announced disposition strategy aiming to optimize GNL's portfolio and financial standing. The sale's cap rate falls within the full-year 2024 guidance provided by the company, which anticipated a range of 7% to 8%.
GNL's CEO, Michael Weil, expressed satisfaction with the sale, noting its role in reducing portfolio risk and aligning the company's debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio more closely with that of its industry peers. The proceeds from the sale are earmarked for debt reduction, which is expected to lower the company's leverage.
This disposition is a component of GNL's larger $567 million closed and pipeline dispositions, which were previously reported to the U.S. Securities and Exchange Commission on June 3, 2024. The company acquired the cold storage portfolio for $153.4 million and views its strategic sale as a step towards narrowing the gap between the value of its real estate assets and its stock price.
Global Net Lease focuses on acquiring and managing a diversified global portfolio of net lease assets in the United States and parts of Europe. The company's strategic moves, including this recent disposition, are closely watched by investors seeking to understand the real estate investment trust's market position and financial health.
In other recent news, Americold Realty Trust has been making significant strides in its operational efficiency, leading to an improved growth outlook. This development led JPMorgan (NYSE:JPM) to upgrade the company's stock from Neutral to Overweight, a change attributed to Americold's promising earnings trajectory for 2024 and into 2025. The investment firm also established a new price target of $30.00 for the company's shares, suggesting confidence in Americold's potential for stock price appreciation.
The company started 2024 strongly, reporting a 28% year-over-year increase in its Adjusted Funds From Operations (AFFO) per share, reaching $104.9 million or $0.37 per share. Americold also raised its full-year 2024 AFFO per share guidance to between $1.38 and $1.46, indicating a 12% increase from the previous year.
Despite a challenging economic environment in Europe, Americold maintains a strong pipeline of new business. The company's same-store services margins have significantly improved, and strategic partnerships continue to advance with new projects in Kansas City and Dubai, as well as an expansion in Sydney, Australia. However, the company's customer-dedicated automated retail distribution facilities are ramping up slower than expected, but Americold remains confident in its ability to maintain a 9% handling margin for the full year.
InvestingPro Insights
As Global Net Lease, Inc. (NYSE: GNL) continues to refine its investment strategy with the recent sale of its cold storage properties, investors are keen to assess the company's current market position and future potential. Americold Realty Trust (NYSE: COLD), the lessee of the sold properties, is a significant player in the Industrial REITs industry. Despite not being profitable over the last twelve months, analysts are optimistic about Americold's future, predicting a return to profitability this year.
InvestingPro data provides a snapshot of Americold's financial standing, with a market capitalization of $7.26 billion and a trailing twelve months revenue of $2.66 billion as of Q1 2024. The company's revenue has seen a slight decrease of 7.76% during the same period. Additionally, Americold's gross profit margin stands at 28.99%, reflecting the efficiency of its operations.
InvestingPro Tips suggest that while Americold is currently trading at a high EBIT valuation multiple, the expected growth in net income this year could justify the valuation. With a dividend yield of 3.44% as of the most recent data, Americold offers an attractive return for income-focused investors. Moreover, the company's strategic position in the industry could bode well for its long-term growth prospects.
For investors looking to delve deeper into Americold Realty Trust's financials and future outlook, there are additional InvestingPro Tips available. By using the exclusive coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at Investing.com. This subscription provides access to comprehensive analysis and real-time data that can help make informed investment decisions.
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