Global Net Lease, Inc. (GNL) stock intrinsic value fair value estimate & owner earnings analysis

Global Net Lease owns 820 net-lease properties (40.7 million square feet, 97% leased, average remaining lease term 6.1 years at year-end 2025). Rent is split 46% industrial and distribution, 27% retail and 27% office, and roughly 74% of rent comes from the U.S. and Canada and 26% from Europe. Tenants pay most property costs, so cash flow is essentially rent less interest, general costs and a small amount of upkeep spending. What changed: in the first half of 2025 the company sold 99 multi-tenant retail properties to RCG Venture Holdings and used the proceeds to pay down about $1.1 billion of revolver borrowings and about $547 million of mortgage principal. Earlier years therefore describe a larger, more indebted business. We measure the current business from the second half of 2025: operating cash flow was about $112 million in the second half of 2025 and about $107 million in the first half of 2026, so the level has held for three consecutive half-years. How we measured earnings: owner earnings are operating cash flow, less working-capital swings, less stock compensation (about $16 million a year), less upkeep capital spending (about $17 million a year, based on the last three half-years). Before the preferred stock this comes to about $159 million a year. The company also pays about $43.7 million a year of preferred dividends that sit ahead of common shareholders, so we deduct them, leaving about $115 million, or roughly $0.55 per share on about 211 million shares. Lease acquisition-related amortisation is a non-cash charge and is not deducted. Last fiscal year our per-share owner earnings measure fell from $1.23 to $0.91, mostly because the sold portfolio stopped contributing; we assume year one is roughly flat against the current level rather than a recovery, because the first half of 2026 shows no further decline. One item could not be reconciled: the narrative in the annual report does not fully bridge net loss and non-cash items to operating cash flow (a gap of roughly $30 million), so we relied on the reported operating cash flow itself. The main issue is debt. Total debt was $2.645 billion at a 4.2% average rate, including $500 million of 3.75% notes due 2027. Maturities are about $631 million in 2027, $816 million in 2028 and $971 million in 2029. Interest expense was $194.7 million in 2025. Refinancing this much low-rate debt at current market rates will cost more, and that is the largest driver in every case. Base case: about $7 per share... see figures below. Contractual rent increases are credited: 86% of leases carry escalators averaging 1.4% a year, which we credit as about $4.9 million a year for six years (roughly the remaining lease term). Debt maturing 2027 to 2029 is refinanced at 6%, adding about $44 million a year of interest once complete. Owner earnings to common dip to about $91 million in 2030, recover to about $101 million, and are held level for 30 years. The value is $6.57 per share. No acquisitions, buybacks or asset-sale debt reduction are credited, because none is contracted. Bear case ($2.35): refinancing at 7% adds about $68 million a year of interest, and 20% of the rent expiring in 2028 to 2030 (which are 11.2%, 14.7% and 11.7% of rent, with office leases averaging only 4.3 years remaining) is not renewed and drops through to cash flow, costing about $31 million a year. Rent increases are credited at half the contractual pace. Owner earnings to common fall to about $28 million a year and the story ends after 25 years. Bull case ($8.00): refinancing at 5.5% adds about $32 million a year, and the contractual escalators are credited for ten years instead of six. Owner earnings to common reach about $113 million and are held level for 30 years. What we left out: acquisitions, share repurchases, further property sales and any rise in rents beyond contractual escalators, because none is secured. The value is sensitive to the refinancing rate and to office and near-term lease renewals; either could push results toward the bear case. Leverage is charged only in the bear case, and no debt is deducted from the values.