Good day, and welcome to the Global Net Lease First Quarter 2019 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Louisa Quarto, Executive Vice President. Please go ahead.

Thank you, operator. Good morning everyone, and thank you for joining us for GNL's first quarter 2019 earnings call. This call is being webcast in the Investor Relations section of GNL's website at www.globalnetlease.com. Joining me today on the call to discuss the quarter's results are Jim Nelson, Chief Executive Officer; and Chris Masterson, Chief Financial Officer. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize actual results may differ materially from those expressed or implied by the forward-looking statements. We refer all of you to our SEC filings, including the annual report on Form 10-K for the year ended December 31, 2018 filed on February 28, 2019 and all other filings with the SEC after that date for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements or portfolio information provided during this conference call are only made as of the date of this call. As stated in our SEC filings GNL disclaims any intent or obligation to update or revise these forward-looking statements or portfolio information except as required by law. During today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the Company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of GAAP net income to the non-GAAP measures can be found in our earnings release supplement and Form 10-Q, all of which are posted to our website at www.globalnetlease.com. I'll now turn the call over to our CEO, Jim Nelson.

Thanks, Louisa and good morning, everyone. Thank you all for joining us on today's call. We are pleased to report a great start to 2019 as we delivered strong results across key performance metrics including increases in rental revenue and adjusted EBITDA. The portfolio continues to grow with $185.3 million of closed and pipeline acquisitions this year with ample capacity to complete additional transactions as attractive opportunities are identified. During the quarter, we strengthened GNL's high quality net lease U.S. and Western European portfolio through acquisitions, capital market initiatives, and the refinancing of certain European properties at attractive rates. The quarter's results also reflect the full benefit of the $212 million in acquisitions GNL closed late in the fourth quarter of 2018. Total rental income for the first quarter was $70.1 million, up 9.9% from $63.8 million in the first quarter of 2018. AFFO also increased in the first quarter to $39.5 million, up 12.6% from the $35.1 million first quarter 2018 figure. AFFO per share decreased to $0.48 per common diluted share from $0.52 per share in the first quarter of 2018, primarily due to the increase in share count from the $153 million of gross common equity issuance as we completed in the first quarter. The real estate acquisitions, we have closed so far in the second quarter 2019 and those in our current acquisition pipeline will be funded primarily from the equity proceeds; we raised and will resolve the natural timing differences we saw this quarter. Overall, our 343 global net leased property portfolio is 99.5% leased, up from 327 properties at the same time in 2018. 274 of these properties are in the U.S. and 69 are in the U.K. and Western Europe, representing 55.8% and 44.2% of annualized rental revenue, respectively. Our investment grade or…

Thanks, Jim. This morning we announced first quarter revenue of $75.5 million, up 10.8% over the first quarter 2018 figure; FFO of $36.2 million, up 13.6%; core FFO of $36.5 million, up 10.2%; and AFFO of $39.5 million, up 12.6%. During the quarter we paid common stock dividends of $43.3 million. As Jim mentioned, our strong first quarter results reflect the effect of a full quarter of results from the $212 million in acquisitions we closed towards the end of the fourth quarter. On our balance sheet we ended the first quarter with net debt, which is debt less cash and cash equivalents, of $1.6 billion at a weighted average interest rate of 3% per annum. Our weighted average debt maturity has lengthened to 4.2 years at the end of the first quarter, an improvement from 3.6 years at the close of 2018 first quarter. The components of GNL's debt include $260.4 million on the multi-currency revolving credit facility, $273.4 million on the term loan, and $1.1 billion of outstanding gross mortgage debt. This debt was approximately 83.7% fixed rate, which is inclusive of floating rate debt with in place interest rate swaps. An improvement over the quarter ended December 31st 2018 was 79.9% was fixed. Our net debt to annualized adjusted EBITDA improved to 6.9 times with a strong interest coverage ratio of 4.3 times. As of March 31st 2019, liquidity was approximately $244.4 million, which comprises $95.3 million of cash on hand and $149.2 million of availability under the credit facility. GNL's net debt to enterprise value was 47.8%, with an enterprise value of $3.3 billion based on the March 29, 2019 closing share price of $18.90 for common stock and $25.67 for the Series A preferred shares. During the quarter, we sold 7,759,322 shares of common stock…

Thanks. Chris. GNL continues to perform well on all fronts. This quarter we delivered strong results across important metrics such as revenue, adjusted EBITDA, FFO, core FFO and AFFO. The portfolio and the rental income it provides continue to grow. We are well-positioned with available capital to close on already identified $108.6 million of upcoming acquisitions and have ample dry powder to complete additional transactions as opportunities are identified. We continue to demonstrate a proven ability to source investment opportunities by leveraging direct relationships with landlords and developers to identify off market transactions, allowing us to achieve what we believe are better than market capitalization rates at more favorable terms than are generally available, generating improved results for the company and our shareholders. Finally as Chris just discussed, during the first quarter GNL's ability to negotiate favorable financing in local markets contributes meaningfully to the bottom line. We are pleased with quarterly results and will remain proactive and disciplined in our acquisition strategy to identify compelling opportunities to acquire net lease assets with a continued near term focus on U.S. industrial and distribution facilities. We will also remain opportunistic when it comes to selectively adding to our international footprint. We will continue our efforts to deliver steady growth and enhance long term value for our shareholders. With that operator we can open the line for questions.

Thank you. [Operator Instruction] Our first question comes from Bryan Maher with B. Riley FBR. Please go ahead.

Good morning. And then maybe this is a question more for Chris. Can you tell us what prompted the increase in the operating fees related parties in the quarter?

Sure. So I would say that the largest driver is actually related to the reversal of the incentive fee in the fourth quarter. So in the third quarter we had booked $361,000 as part of our quarterly analysis. And then as we went through the fourth quarter and did our quarterly analysis, the hurdle was not met so that amount was reversed out in for Q4 for $361,000. So if you actually just looked at your asset management fees and property management fees they only increased $300,000 quarter-over-quarter which would equate to the increase driven by the shares that were sold in 1Q.

Okay. And then were there any onetime items in the G&A line?

So in the G&A line, that's really driven by a lot of activity that took place during the first quarter between the proxy, the filing of all of our tax returns, bad tax returns, some additional internal audit work during the quarter and also completion of the audit. So that's really the driver over the fourth quarter.

And what do you think is the G&A run rate for the balance of the year roughly?

For the balance of the year, I don't have any exact number and I don't want to give a forecast. But I would say that, this is probably one of both the higher quarters just given the activity volume that took place during the quarter.

Okay. And then maybe a bigger picture question for Jim. Do you think that you may make or take a pause in your acquisition appetite given what's going on with a potential trade war with China, and its possible impact on industrial assets, logistic facilities in the U.S. We're seeing some overdramatic moves it would seem in trucking companies or services of trucking companies based upon what's going on this week. How do you think about what's going on this week as it relates to your business and your appetite for acquisitions?

Good question, Bryan. And again thanks for joining the call and it's always good to talk to you. We watch this very carefully. We -- as you know we buy the best quality properties. We can buy long duration high quality tenants, a large percentage of investment grade tenants. So we look very carefully when we underwrite acquisitions and the things we ultimately decide to buy. We're very confident in what we're buying. We will continue our asset acquisition program during the year but being very, very careful and watching the political outcomes from this trade war with China. But as you know, our pipeline is funded from the equity proceeds we raised and we will -- and those -- we will continue to be very selective and continue to grow the business as appropriate.

Thanks, Jim.

Thank you, Bryan.

Our next question comes from Mitch Germain with JMP Securities. Please go ahead.

Hi. How are you?

Hey, Mitch we're good. How are you?

I'm great. Thanks for asking. So it seems like retail is not exactly a fit based on how you've been allocating capital. And I'm curious what your thoughts is of the assets that you hold in that segment.

Well, I think the assets -- it's also another very good question. The assets that we hold are very good performing assets. They're solid. They're long-term leases in place with good tenants. We continually monitor our portfolio. As you see the percentage of retail assets we have is declining as the portfolio grows, we're down to 8% now of the overall portfolio. So we're pretty comfortable with the retail assets that we have. And we're not buying any new retail assets as you well know, but I think we're comfortable with what we have and we do watch it very carefully. And they're all performing very well.

Got you. And I guess you made the comment that you're starting to identify some prospective deals in Europe. Obviously most of the capital you've been allocating over the last 24 months or so has been targeted to the U.S. I'm curious about what -- has there have been a change in the pricing dynamic or is the competitive environment become more favorable to allocate capital, what's spurring that change?

Again it's a number of factors. One of the factors being that we have our own team on the ground in London now. And they have been really out -- uncovering some very strong potential acquisitions. And I'd like to give at this point kudos to our acquisition team, because they've just done an incredible job bringing us excellent acquisitions certainly as long as I've been here. And they continue to bring us a very, very strong, very high quality potential acquisitions. So what we're finding in Europe? We are finding some good opportunities. Again Europe it was slowing down for a while but that seems to be abating and Europe seems to be starting to do a little bit better. So I think we're little more comfortable buying assets in Europe. But all-in-all, we have a disciplined approach to our acquisitions both in Europe and in the U.S. and we will continue to follow that.

Great. And obviously you -- I believe you acquired a office building this quarter. I'm just curious -- it seems like most of the deal still continue to be focused in on the industrial sector. But -- obviously very competitive out there, particularly when it comes to identifying industrial deals, I mean could we see you potentially be allocating more capital to the office segment going forward?

There's no plan to do that. Primarily, we're buying distribution -- industrial and distribution facilities. But there will be the occasional -- potentially the occasional office property that's a compelling buy. And we certainly have the ability to execute on it. But our focus is primarily on industrial distribution as you've seen from what we've bought in the last year and a half.

Thank you.

Thank you.

[Operator Instructions] And our next question comes from John Massocca with Ladenburg Thalmann. Please go ahead.

Good morning.

Hey John good morning.

So do you think kind of maybe beyond the current pipeline you listed that given the amount of equity you raised in 1Q that you have additional runway for acquisitions. I mean I just look at it -- I think I calculated a roughly kind of $173 million $175 million of stuff you've closed in 1Q -- closed in 2Q and then have under kind of in the pipeline if you will. And it seems like you might have more runway beyond that just with the equity you have on hand. I mean is that a fair way to think about it or is the equity…

No that's a very -- I'm sorry John. I don't mean to interrupt you. But that's a very fair way to look at it. We do have dry powder and as I said in the last call our acquisition team has just been really bringing us a lot of great properties to look at.

But essentially the amount you raised in 1Q is not maybe an effort to operate at a lower leverage level than you traditionally have.

It wasn't an initial focus.

Okay.

Really the capital raise during first quarter was for the purpose of acquiring additional properties.

Okay. And then on the balance sheet side again, with regards to the potential German debt refinancing and kind of understanding you might still be negotiating this. But should we expect a lower interest rate on this debt versus the existing mortgages or relatively the same or maybe higher?

It's going to be relatively same. They'll be right around 1.9% or 2%.

Okay. That's it for me. Thank you very much.

Great John. Thanks for calling in.

This concludes our question-and-answer session. I would like turn the conference back over to Jim Nelson for any closing remarks.

Yes. I'd like to thank you all for dialing in this morning. We certainly are very pleased with the results that GNL is delivering. We intend to continue delivering outstanding results moving forward. We have a very slow and steady approach to growing this company and we're very careful with what we buy. We focus as you all know on high quality tenants long lease durations. And we've been very fortunate to be able to buy a lot of good assets and we intend to continue with that program. At this point I'll just say thank you all for dialing in. And we'll talk to you next quarter. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.