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Gladstone Commercial Corporation Reports Results for the Third Quarter Ended September 30, 2024

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Gladstone Commercial (Nasdaq:GOOD) reported financial results for Q3 2024. Key highlights include: total operating revenue of $39.2 million (up 5.9% quarter-over-quarter), net income of $11.7 million, and Core FFO of $16.3 million ($0.38 per share). The company maintained a 98.5% occupancy rate and collected 100% of cash rents during the quarter.

Notable Q3 activities included purchasing a 50,102 square foot property for $10.2 million, selling two non-core properties for $14.2 million, and issuing common stock for net proceeds of $38.9 million. The company renewed or leased 242,467 square feet across five properties and maintained quarterly distributions of $0.30 per common share.

Gladstone Commercial (Nasdaq:GOOD) ha riportato i risultati finanziari per il terzo trimestre del 2024. I punti salienti includono: entrate operative totali di 39,2 milioni di dollari (in aumento del 5,9% rispetto al trimestre precedente), reddito netto di 11,7 milioni di dollari e Core FFO di 16,3 milioni di dollari (0,38 dollari per azione). L'azienda ha mantenuto un tasso di occupazione del 98,5% e ha raccolto il 100% degli affitti in contante durante il trimestre.

Le attività significative del terzo trimestre hanno incluso l'acquisto di una proprietà di 50.102 piedi quadrati per 10,2 milioni di dollari, la vendita di due proprietà non strategiche per 14,2 milioni di dollari e l’emissione di azioni ordinarie per ricavi netti di 38,9 milioni di dollari. L'azienda ha rinnovato o affittato 242.467 piedi quadrati in cinque proprietà e ha mantenuto distribuzioni trimestrali di 0,30 dollari per azione comune.

Gladstone Commercial (Nasdaq:GOOD) informó sobre los resultados financieros del tercer trimestre de 2024. Los puntos destacados incluyen: ingresos operativos totales de 39,2 millones de dólares (un aumento del 5,9% en comparación con el trimestre anterior), ingreso neto de 11,7 millones de dólares y Core FFO de 16,3 millones de dólares (0,38 dólares por acción). La compañía mantuvo un tasa de ocupación del 98,5% y cobró el 100% de los alquileres en efectivo durante el trimestre.

Las actividades notables del tercer trimestre incluyeron la compra de una propiedad de 50,102 pies cuadrados por 10,2 millones de dólares, la venta de dos propiedades no estratégicas por 14,2 millones de dólares, y la emisión de acciones ordinarias por ingresos netos de 38,9 millones de dólares. La empresa renovó o arrendó 242,467 pies cuadrados en cinco propiedades y mantuvo distribuciones trimestrales de 0,30 dólares por acción común.

글래드스톤 상업 (Nasdaq:GOOD)은 2024년 3분기 재무 결과를 발표했습니다. 주요 하이라이트는 다음과 같습니다: 총 운영 수익이 3,920만 달러(전분기 대비 5.9% 증가), 순이익이 1,170만 달러, Core FFO가 1,630만 달러(주당 0.38 달러)입니다. 이 회사는 98.5%의 점유율을 유지했으며, 분기 동안 현금 임대료의 100%를 수집했습니다.

3분기의 주요 활동으로는 50,102 평방 피트의 부동산을 1,020만 달러에 구매하고, 두 개의 비핵심 부동산을 1,420만 달러에 판매하며, 순수익 3,890만 달러를 위한 보통주를 발행한 것입니다. 이 회사는 5개 부동산에서 242,467 평방 피트를 갱신하거나 임대했으며, 보통주당 분기 배당금을 0.30 달러로 유지했습니다.

Gladstone Commercial (Nasdaq:GOOD) a annoncé les résultats financiers du troisième trimestre 2024. Les faits marquants comprennent : un chiffre d'affaires total d'exploitation de 39,2 millions de dollars (augmentation de 5,9 % par rapport au trimestre précédent), un bénéfice net de 11,7 millions de dollars, et Core FFO de 16,3 millions de dollars (0,38 dollar par action). La société a maintenu un taux d'occupation de 98,5 % et a perçu 100 % des loyers en espèces au cours du trimestre.

Parmi les activités notables du T3, on trouve l'achat d'un bien de 50 102 pieds carrés pour 10,2 millions de dollars, la vente de deux biens non stratégiques pour 14,2 millions de dollars et l'émission d'actions ordinaires pour des produits nets de 38,9 millions de dollars. L'entreprise a renouvelé ou loué 242 467 pieds carrés sur cinq propriétés et a maintenu des distributions trimestrielles de 0,30 dollar par action ordinaire.

Gladstone Commercial (Nasdaq:GOOD) hat die finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht. Die wichtigsten Punkte sind: gesamte Betriebseinnahmen von 39,2 Millionen Dollar (Steigerung um 5,9% im Vergleich zum Vorquartal), Nettoeinkommen von 11,7 Millionen Dollar und Core FFO von 16,3 Millionen Dollar (0,38 Dollar pro Aktie). Das Unternehmen hielt eine Belegungsquote von 98,5% und sammelte 100% der Barmieten im Quartal.

Zu den bemerkenswerten Aktivitäten im 3. Quartal gehörten der Kauf einer 50.102 Quadratfuß großen Immobilie im Wert von 10,2 Millionen Dollar, der Verkauf von zwei nicht zum Kerngeschäft gehörenden Immobilien für 14,2 Millionen Dollar und die Ausgabe von Stammaktien mit einem Nettoerlös von 38,9 Millionen Dollar. Das Unternehmen erneuerte oder vermietete 242.467 Quadratfuß über fünf Immobilien und hielt vierteljährliche Ausschüttungen von 0,30 Dollar pro Stammaktie aufrecht.

Positive
  • Revenue increased 5.9% to $39.2 million quarter-over-quarter
  • Net income grew significantly to $11.7 million from $1.6 million in previous quarter
  • Core FFO increased 11.2% to $16.3 million
  • Maintained high occupancy rate of 98.5%
  • 100% rent collection rate throughout the quarter
  • Successfully raised $38.9 million through common stock issuance
Negative
  • Operating expenses increased 9.9% quarter-over-quarter
  • Total assets decreased by 0.8% to $1.09 billion
  • New debt issued at higher 5.60% interest rate compared to repaid debt at 4.04%

Insights

The Q3 2024 results show significant positive momentum for Gladstone Commercial. Key highlights include: $39.2M in operating revenue (5.9% increase), $11.7M net income (up from $1.6M) and Core FFO of $16.3M (11.2% increase). The company maintained a strong 98.5% occupancy rate and achieved 100% rent collection.

Notable achievements include successful capital recycling through the sale of two non-core properties for $14.2M, acquisition of a fully-occupied property at an attractive 9.94% cap rate and raising $38.9M through common stock issuance. The company's deleveraging efforts are evident in the 4.1% reduction in mortgage notes and borrowings.

The focus on industrial properties and target growth markets, combined with consistent rental growth and proactive portfolio management, positions the company well despite broader economic challenges.

The property portfolio restructuring strategy demonstrates strong execution. The sale of six non-core assets in 2024 with additional planned dispositions shows commitment to portfolio optimization. The successful leasing of 2.6M square feet to ten tenants reflects robust demand for their properties.

The 2% annual same-store rent growth trend is particularly noteworthy in the current market environment. The company's ability to maintain full occupancy and perfect rent collection through economic uncertainties validates their tenant credit underwriting approach.

The strategic focus on industrial properties in growth markets aligns with current market trends, as industrial remains one of the strongest performing commercial real estate sectors. The combination of deleveraging, strategic acquisitions and portfolio optimization creates a solid foundation for sustainable growth.

Please note that the limited information that follows in this press release is not adequate to make an informed investment judgment.

MCLEAN, VA / ACCESSWIRE / November 4, 2024 / Gladstone Commercial Corporation (Nasdaq:GOOD) ("Gladstone Commercial" or the "Company") today reported financial results for the third quarter ended September 30, 2024. A description of funds from operations, or FFO, and Core FFO, both non-GAAP (generally accepted accounting principles in the United States) financial measures, are located at the end of this press release. All per share references are to fully-diluted weighted average shares of common stock and Non-controlling OP Units, unless otherwise noted. For further detail, please also refer to both the quarterly financial supplement and the Company's Quarterly Report on Form 10-Q, which can be retrieved from the Investors section of our website at www.gladstonecommercial.com.

Summary Information (dollars in thousands, except share and per share data):

As of and for the three months ended

September 30, 2024

June 30, 2024

$ Change

% Change

Operating Data:

Total operating revenue

$

39,235

$

37,057

$

2,178

5.9

%

Total operating expenses

(28,546

)

(1)

(25,973

)

(2,573

)

9.9

%

Other income (expense), net

1,032

(2)

(9,484

)

(4)

10,516

(110.9

)%

Net income

$

11,721

$

1,600

$

10,121

632.6

%

Less: Dividends attributable to preferred stock

(3,106

)

(3,116

)

10

(0.3

)%

Less: Dividends attributable to senior common stock

(106

)

(105

)

(1

)

1.0

%

Add/Less: Gain (loss) on extinguishment of Series F preferred stock, net

2

(4

)

6

(150.0

)%

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders

$

8,511

$

(1,625

)

$

10,136

(623.8

)%

Add: Real estate depreciation and amortization

13,343

16,015

(2,672

)

(16.7

)%

Add: Impairment charge

4,549

-

4,549

100.0

%

Add: Loss on sale of real estate, net

-

47

(47

)

(100.0

)%

Less: Gain on sale of real estate, net

(10,319

)

-

(10,319

)

100.0

%

Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic

$

16,084

$

14,437

$

1,647

11.4

%

Add: Convertible senior common distributions

106

105

1

1.0

%

Funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted

$

16,190

$

14,542

$

1,648

11.3

%

Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic

$

16,084

$

14,437

$

1,647

11.4

%

Add: Bad debt write off

-

64

(64

)

(100.0

)%

Add: Asset retirement obligation expense

33

33

-

-

%

Add: Realized loss on interest rate hedging instruments

51

-

51

100.0

%

Core funds from operations available to common stockholders and Non-controlling OP Unitholders - basic

$

16,168

$

14,534

$

1,634

11.2

%

Add: Convertible senior common distributions

106

105

1

1.0

%

Core funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted

$

16,274

$

14,639

$

1,635

11.2

%

Share and Per Share Data:

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders - basic and diluted

$

0.20

$

(0.04

)

$

0.24

(600.0

)%

FFO available to common stockholders and Non-controlling OP Unitholders - basic

$

0.38

$

0.36

$

0.02

5.6

%

FFO available to common stockholders and Non-controlling OP Unitholders - diluted

$

0.38

$

0.36

$

0.02

5.6

%

Core FFO available to common stockholders and Non-controlling OP Unitholders - basic

$

0.38

$

0.36

$

0.02

5.6

%

Core FFO available to common stockholders and Non-controlling OP Unitholders - diluted

$

0.38

$

0.36

$

0.02

5.6

%

Weighted average shares of common stock and Non-controlling OP Units outstanding - basic

42,830,159

40,553,113

2,277,046

5.6

%

Weighted average shares of common stock and Non-controlling OP Units outstanding - diluted

43,169,458

40,895,360

2,274,098

5.6

%

Cash dividends declared per common share and Non-controlling OP Unit

$

0.30

$

0.30

$

-

-

%

Financial Position

Real estate, before accumulated depreciation

$

1,238,271

(3)

$

1,239,476

(5)

$

(1,205

)

(0.1

)%

Total assets

$

1,096,315

$

1,105,546

$

(9,231

)

(0.8

)%

Mortgage notes payable, net, borrowings under revolver, and borrowings under term loan, net

$

692,647

$

722,536

$

(29,889

)

(4.1

)%

Total equity and mezzanine equity

$

339,087

$

315,862

$

23,225

7.4

%

Properties owned

135

(3)

136

(5)

(1

)

(0.7

)%

Square feet owned

16,849,547

(3)

16,825,776

(5)

23,771

0.1

%

Square feet leased

98.5

%

98.5

%

-

%

-

%

(1)

Includes a $4.5 million impairment charge recognized on one property during the three months ended September 30, 2024.

(2)

Includes a $10.3 million gain on sale, net, from the sale of two properties during the three months ended September 30, 2024.

(3)

Includes two properties classified as held for sale of $24.0 million and 750,191 square feet, in the aggregate.

(4)

Includes a $0.05 million loss on sale, net, from the sale of one property during the three months ended June 30, 2024.

(5)

Includes two properties classified as held for sale of $9.3 million and 26,331 square feet, in the aggregate.

Third Quarter Activity:

  • Collected 100% of cash rents: Collected 100% of cash rents due during July, August, and September;

  • Acquired property: Purchased one fully-occupied, 50,102 square foot property for $10.2 million at a cap rate of 9.94%;

  • Sold properties: Sold two non-core properties as part of our capital recycling program for an aggregate of $14.2 million;

  • Renewed and leased space: Renewed or leased 242,467 square feet with remaining lease terms ranging from 6.1 to 8.9 years at five of our properties;

  • Issued common stock under ATM Program: Issued 2,694,286 shares of common stock for net proceeds of $38.9 million;

  • Issued Series F Preferred Stock: Issued 4,400 shares of our Series F Preferred Stock for net proceeds of $0.1 million; and

  • Paid distributions: Paid monthly cash distributions for the quarter totaling $0.30 per share on our common stock and Non-controlling OP Units, $0.414063 per share on our Series E Preferred Stock, $0.375 per share on our Series F Preferred Stock, $0.375 per share on our Series G Preferred Stock, and $0.2625 per share on our senior common stock.

Third Quarter 2024 Results: Core FFO available to common shareholders and Non-controlling OP Unitholders for the three months ended September 30, 2024 was $16.3 million, an 11.2% increase when compared to the three months ended June 30, 2024, equaling $0.38 per share. Core FFO increased primarily due to a settlement received at one of our properties related to deferred maintenance.

Net income available to common stockholders and Non-controlling OP Unitholders for the three months ended September 30, 2024 was $8.5 million, or $0.20 per share, compared to net loss attributable to common stockholders and Non-controlling OP Unitholders for the three months ended June 30, 2024 of $1.6 million, or $0.04 per share. In the Summary Information table above, we provide a reconciliation of Core FFO to net income (loss) (which we believe is the most directly comparable GAAP measure to Core FFO) for the three months ended September 30, 2024 and June 30, 2024, a computation of basic and diluted Core FFO per weighted average share of common stock and Non-controlling OP Unit, and basic and diluted net income (loss) per weighted average share of common stock and Non-controlling OP Unit.

Subsequent to the end of the quarter:

  • Collected 100% of October cash rents: Collected 100% of cash rents due in October;

  • Issued common stock under ATM Program: Issued 182,368 shares for net proceeds of $2.9 million;

  • Issued Series F Preferred Stock: Issued 4,000 shares for net proceeds of $0.1 million;

  • Issued new debt: Borrowed $15.2 million in fixed rate mortgage debt at an interest rate of 5.60% and a maturity date of August 31, 2029;

  • Repaid debt: Repaid $14.8 million in fixed rate mortgage debt at an interest rate of 4.04%; and

  • Declared distributions: Declared monthly cash distributions for October, November, and December2024, totaling $0.30 per share on our common stock and Non-controlling OP Units, $0.414063 per share on our Series E Preferred Stock, $0.375 per share on our Series F Preferred Stock, $0.375 per share on our Series G Preferred Stock, and $0.2625 per share on our senior common stock.

Comments from Gladstone Commercial's President, Buzz Cooper: "Our financial results reflect consistent performance and stabilized revenues from our tremendous same store property occupancy, rent collection and growth, accretive real estate investments made during 2023 and 2024, and our ability to renew tenants, as well as our deleveraging and capital recycling programs. We have continued our capital recycling program, whereby we have sold non-core assets and used the proceeds to de-lever our portfolio, as well as acquire properties in our target growth markets. We have successfully exited six non-core assets thus far in 2024, and we have additional non-core assets we anticipate selling over the next one to two years that we believe will result in capital gains. We will continue to opportunistically sell non-core assets and redeploy the proceeds into stronger target growth markets with a focus on industrial investment opportunities. While we expect to face challenges due to the lingering effects of the pandemic, significant inflation with a corresponding increase in interest rates, and the geo-political and economic issues arising from international wars, we feel strongly about the depth of our tenant credit underwriting. We have collected 100% of the first three quarters' cash rents and 100% of October cash rents. We anticipate our tenants will successfully navigate the current economic climate and will be able to continue operating successfully when economic normalcy returns fully. Despite economic uncertainty, so far during 2024, we renewed or newly leased 2,626,199 square feet of properties with ten tenants. We are actively marketing our remaining vacant space and currently anticipate positive outcomes. We expect to continue to have access to the debt and equity markets, as necessary, for added liquidity. We believe our same store rents, which have increased by 2% annually in recent years, should continue to rise as we grow, and we will continue to primarily focus on investing in our target markets, with an emphasis on industrial properties and actively managing our portfolio."

Conference Call: Gladstone Commercial will hold a conference call on Tuesday, November 5, 2024, at 8:30 a.m. Eastern Time to discuss its earnings results. Please call (866) 424-3437 to enter the conference call. An operator will monitor the call and set a queue for questions. A conference call replay will be available beginning one hour after the call and will be accessible through November 12, 2024. To hear the replay, please dial (877) 660-6853 and use playback conference number 13748839. The live audio broadcast of the Company's quarterly conference call will also be available on the investors section of our website, www.gladstonecommercial.com.

About Gladstone Commercial: Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Further information can be found at www.gladstonecommercial.com.

About the Gladstone Companies: Information on the business activities of the Gladstone family of funds can be found at www.gladstonecompanies.com.

Investor Relations: For Investor Relations inquiries related to any of the monthly distribution-paying Gladstone family of funds, please visit www.gladstonecompanies.com.

Non-GAAP Financial Measures:

FFO: The National Association of Real Estate Investment Trusts ("NAREIT") developed FFO as a relative non-GAAP supplemental measure of operating performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO, as defined by NAREIT, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and impairment losses on property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. FFO does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of its performance or to cash flow from operations as a measure of liquidity or ability to make distributions. The Company believes that FFO per share provides investors with an additional context for evaluating its financial performance and as a supplemental measure to compare it to other REITs; however, comparisons of its FFO to the FFO of other REITs may not necessarily be meaningful due to potential differences in the application of the NAREIT definition used by such other REITs.

Core FFO: Core FFO is FFO adjusted for certain items that are not indicative of the results provided by the Company's operating portfolio and affect the comparability of the Company's period-over-period performance. These items include the adjustment for acquisition related expenses, gains or losses from early extinguishment of debt and any other non-recurring expense adjustments. Although the Company's calculation of Core FFO differs from NAREIT's definition of FFO and may not be comparable to that of other REITs, the Company believes it is a meaningful supplemental measure of its operating performance. Accordingly, Core FFO should be considered a supplement to net income computed in accordance with GAAP as a measure of our performance.

The Company's presentation of FFO, as defined by NAREIT, or presentation of Core FFO, does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of its performance or to cash flow from operations as a measure of liquidity or ability to make distributions.

The statements in this press release regarding the forecasted stability of Gladstone Commercial's income, its ability, plans or prospects to re-lease its unoccupied properties, and grow its portfolio are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on Gladstone Commercial's current plans that are believed to be reasonable as of the date of this press release. Factors that may cause actual results to differ materially from these forward-looking statements include, but are not limited to, Gladstone Commercial's ability to raise additional capital; availability and terms of capital and financing, both to fund its operations and to refinance its indebtedness as it matures; downturns in the current economic environment; the performance of its tenants; the impact of competition on its efforts to renew existing leases or re-lease space; and significant changes in interest rates.Additional factors that could cause actual results to differ materially from those stated or implied by its forward-looking statements are disclosed under the caption "Risk Factors" of its Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on February 21, 2024, and other reports filed with the SEC.Gladstone Commercial cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.Gladstone Commercial undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

CONTACT:

Gladstone Commercial Corporation
(703) 287-5893

SOURCE: Gladstone Commercial Corporation



View the original press release on accesswire.com

FAQ

What was Gladstone Commercial's (GOOD) revenue in Q3 2024?

Gladstone Commercial reported total operating revenue of $39.235 million in Q3 2024, representing a 5.9% increase from the previous quarter.

What was GOOD's occupancy rate in Q3 2024?

Gladstone Commercial maintained a 98.5% occupancy rate across its portfolio during Q3 2024.

How much did Gladstone Commercial (GOOD) pay in dividends for Q3 2024?

The company paid monthly cash distributions totaling $0.30 per share on common stock and Non-controlling OP Units for Q3 2024.

What was Gladstone Commercial's (GOOD) Core FFO per share in Q3 2024?

Core FFO was $0.38 per share for Q3 2024, showing an increase from $0.36 per share in the previous quarter.

Gladstone Commercial Corporation - REIT

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