Case Studies

As shown in the case studies below, GNL has the ability to outperform fixed income/corporate bonds through comparable investments in corporate real estate.

Appreciation Potential Versus No Chance of Capital Appreciation

Unlike a corporate bond investment which has a fixed rate of return, as demonstrated below, rental income from commercial real estate properties tends to appreciate over time through contractually-backed forms of lease increases such as those that link rental payments to the change in the consumer price index, or CPI.

Secured By Hard Assets

An investment in commercial real estate is a hard asset – the land and structure itself have intrinsic value. Corporate bonds offer no such security.

Higher Yield

The blue arrow shown in the case studies represent the difference in the yield between the rental income generated by GNL-owned corporate real estate and the return on a bond issued by that same corporate tenant. We see that yield on the real estate investment is considerably higher.

RWE Headquarters - Essen, Germany
Baa1 Investment Grade Credit Rating

Baa1 Investment Grade Credit Rating

German-based RWE is one of Europe’s five leading electricity and gas companies with respect to sales of electricity and gas. The company is active at all levels of the energy production and distribution chain – operating gas, coal, nuclear and renewables power plants, and marketing and distributing energy to approximately 24 million customers across the continent.

  • Acquisition date: November 17, 2014
  • Rental escalations: 100% of German CPI built into rental agreement
  • Year 5 Yield on RWE bond*: 2.64%
  • Year 5 Yield on GNL-owned RWE Property: 8.5%
  • Year 5 Spread: 586 bps

*€800 million bond of the same covenant maturing January 17, 2014

Achmea Office Property - Leusden, Netherlands
A - Investment Grade Credit Rating

Baa1 Investment Grade Credit Rating

Achmea is one of the oldest and largest suppliers of financial services (mainly insurance) in the Netherlands. The company was founded in 1811 and serves about half of all Dutch households.

  • Acquisition date: July 31, 2014
  • Rental escalations: Rent indexation every 1st of January based on CPI
  • Year 5 Yield on Achmea bond*: 4.09%
  • Year 5 Yield on GNL-owned Achmea Property: 9.3%
  • Year 5 Spread: 521 bps

*€750m bond of the same covenant with a call date of February 4, 2025

FINNAIR - Vantaa-Helsinki Airport, Finland
Aaa Investment Grade Credit Rating

Aaa Investment Grade Credit Rating

Finnair is a European network carrier with operations in passenger and cargo traffic, offering smooth and fast connections in the northern hemisphere. Finnair’s route network connects Europe, Asia and North America through its hub at Helsinki-Vantaa Airport.

  • Acquisition date: September 23, 2015
  • Rental escalations: Upward only annual indexations of 100% of the Finnish cost-of-living index
  • Year 5 Yield on FINNAIR bond*: 7.85% (it is a hybrid security with the interest rate based on a fixed rate + 2 month Libor, the 7.857% is from the prospectus)
  • Year 5 Yield on GNL-owned FINNAIR Property: 11.32%
  • Year 5 Spread: 334 bps

*€200m bond of the same covenant with a maturity date of October 1, 2020