Global Net Lease is set to acquire Modiv Industrial, a REIT focused on single-tenant net-leased industrial manufacturing real estate, in a $535M all-stock deal, the companies announced Monday.
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New York City-based Global Net Lease plans to repay Modiv’s debt as part of the deal, which is already approved by both companies’ boards of directors. The transaction values Modiv shares at $18.82 each, a 17% premium to its Friday closing price, according to the press release.
GNL, a pure-play net lease REIT, will acquire Modiv’s portfolio of mission-critical net-leased industrial assets, which have an average weighted lease term of 15 years and 2.4% average annual rent escalations. Without disclosing specifics, the release indicates the portfolio is “geographically well-diversified” and will integrate seamlessly with GNL’s portfolio.
GNL said the merger will enhance its scale, diversification and capital flexibility. Unlike a string of buyers that have taken REITs private over the past year, GNL is publicly traded.
Modiv shareholders will receive just under two newly issued shares of GNL stock for each Modiv share held at the completion of the transaction, which is expected in the third quarter. Existing GNL stockholders will own 89% of the combined company, with Modiv stockholders owning the remaining 11%.
“We have long believed that our portfolio’s quality was historically mispriced by the marketplace and that we would be receptive if someone sought to close the value gap sooner than we could,” Modiv CEO Aaron Halfacre said in a statement.
Modiv fielded “a range of suitors” over the past year, including unsolicited offers, Halfacre added. GNL distinguished itself by creating long-term opportunities and compelling value for Modiv investors, he said.
Modiv’s initial public offering was in February 2022. Its portfolio was valued at $597M as of December.
GNL has assets valued at $5.3B. The REIT’s 820-property portfolio was 97% occupied and made up of 46% industrial and distribution, 27% retail and 27% office properties as of December, according to its website.
GNL merged with The Necessity Retail REIT in 2023, creating the third-largest listed net lease REIT.
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