Gladstone Commercial Corporation Reports Results for the Third Quarter Ended September 30, 2025

Rhea-AI Summary

Gladstone Commercial (Nasdaq:GOOD) reported results for the quarter ended September 30, 2025. Core FFO was $16.4M, up 1.8% quarter-over-quarter, or $0.35 per share. FFO was approximately $16.3M (+6.0%) and $0.35 per share (+6.1%). Net income available to common shareholders was $1.0M (≈ $0.02 per share), down ~32.5% vs prior quarter.

Operational highlights: collected 100% of cash rents, acquired a six-facility portfolio (693,236 sq ft) for $54.8M at a 9.53% cap rate, sold one non-core property for $3.0M, and issued 1,891,807 shares under its ATM for net proceeds of $23.0M. Subsequent: expanded credit facility to $600M with extended maturities.

Positive

• Core FFO of $16.4M (+1.8% QoQ)
• FFO per share of $0.35 (+6.1% QoQ)
• Collected 100% of cash rents for July–October
• Acquired 693,236 sq ft for $54.8M at 9.53% cap rate
• Expanded credit facility to $600M with extended maturities

Negative

• Net income to commonholders declined to $1.0M (≈ $0.02), down 32.5% QoQ
• Mortgage and other borrowings increased to $843.3M (+6.2% QoQ)
• Issued 1,891,807 shares under ATM for $23.0M (share issuance/dilution)
• Higher interest expense from increased variable-rate debt (reported)

Insights

Real Estate REIT Analyst

Core FFO edged up while net income fell; liquidity extended via a larger credit facility — overall neutral near‑term impact.

The business generated Core FFO of $16.4 million ($0.35 per share), a 1.8% increase quarter‑over‑quarter, driven by acquisitions, leasing, and same‑store strength. Total operating revenue was $40.8 million and Core FFO growth was partially offset by higher interest expense from increased variable‑rate debt. The company closed a $54.8 million acquisition at a weighted average cap rate of 9.53%, sold a non‑core asset for $3.0 million, and issued ~1.9 million shares for net proceeds of $23.0 million.

Liquidity and capital structure changed materially after quarter end: the revolver rose to $200.0 million and aggregate term loans to $400.0 million, creating a $600.0 million facility with extended maturities to October 2029 and February 2030. This reduces near‑term refinancing risk but increases exposure to variable rates, which the company cites as a driver of higher interest expense. Management also reiterated its capital recycling plan and expects to sell additional non‑core assets over the next one to two years.

Watchables: monitor quarterly Core FFO trends, interest expense trajectory and fixed vs variable debt mix, progress on planned non‑core asset sales over the next one to two years, and leasing absorption given recent 99.1% leased rate and completed leasing of hundreds of thousands of square feet. The company will host an earnings call on November 4, 2025 for additional color. Given modest FFO growth, offsetting higher interest expense, and no single decisive positive or negative event, the net impact is assessed as neutral.

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

MCLEAN, VA / ACCESS Newswire / November 3, 2025 / Gladstone Commercial Corporation (Nasdaq:GOOD) ("Gladstone Commercial" or the "Company") today reported financial results for the third quarter ended September 30, 2025. 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, 2025					June 30, 2025					$ Change				% Change
Operating Data:
Total operating revenue		$	40,841				$	39,533				$	1,308				3.3	%
Total operating expenses			(26,021	)				(25,146	)	(2)			(875	)			3.5	%
Other expense, net			(10,683	)	(1)			(9,753	)	(3)			(930	)			9.5	%
Net income		$	4,137				$	4,634				$	(497	)			(10.7	)%
Less: Dividends attributable to preferred stock			(3,058	)				(3,085	)				27				(0.9	)%
Less: Dividends attributable to senior common stock			(102	)				(101	)				(1	)			1.0	%
Add: Gain on extinguishment of Series F preferred stock, net			6					9					(3	)			(33.3	)%
Net income available to common stockholders and Non-controlling OP Unitholders		$	983				$	1,457				$	(474	)			(32.5	)%
Add: Real estate depreciation and amortization			15,271					14,249					1,022				7.2	%
Add: Impairment charge			-					9					(9	)			(100.0	)%
Add: Loss on sale of real estate, net			10					-					10				100.0	%
Less: Gain on sale of real estate, net			-					(377	)				377				(100.0	)%
Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic		$	16,264				$	15,338				$	926				6.0	%
Add: Convertible senior common distributions			102					101					1				1.0	%
Funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted		$	16,366				$	15,439				$	927				6.0	%
Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic		$	16,264				$	15,338				$	926				6.0	%
Add: Write off prepaid offering costs			-					305					(305	)			(100.0	)%
Add: Asset retirement obligation expense			34					34					-				-	%
Add: Closing costs on sale			-					336					(336	)			(100.0	)%
Core funds from operations available to common stockholders and Non-controlling OP Unitholders - basic		$	16,298				$	16,013				$	285				1.8	%
Add: Convertible senior common distributions			102					101					1				1.0	%
Core funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted		$	16,400				$	16,114				$	286				1.8	%
Share and Per Share Data:
Net income available to common stockholders and Non-controlling OP Unitholders - basic and diluted		$	0.02				$	0.03				$	(0.01	)			(33.3	)%
FFO available to common stockholders and Non-controlling OP Unitholders - basic		$	0.35				$	0.33				$	0.02				6.1	%
FFO available to common stockholders and Non-controlling OP Unitholders - diluted		$	0.35				$	0.33				$	0.02				6.1	%
Core FFO available to common stockholders and Non-controlling OP Unitholders - basic		$	0.35				$	0.35				$	-				-	%
Core FFO available to common stockholders and Non-controlling OP Unitholders - diluted		$	0.35				$	0.35				$	-				-	%
Weighted average shares of common stock and Non-controlling OP Units outstanding - basic			46,917,160					46,259,137					658,023				1.4	%
Weighted average shares of common stock and Non-controlling OP Units outstanding - diluted			47,245,719					46,587,696					658,023				1.4	%
Cash dividends declared per common share and Non-controlling OP Unit		$	0.30				$	0.30				$	-				-	%
Financial Position
Real estate, before accumulated depreciation		$	1,400,357				$	1,350,523		(4)		$	49,834				3.7	%
Total assets		$	1,265,003				$	1,209,993				$	55,010				4.5	%
Mortgage notes payable, net, borrowings under revolver, borrowings under term loan, net, borrowings under unsecured term loan, net, and senior unsecured notes, net		$	843,285				$	794,391				$	48,894				6.2	%
Total equity and mezzanine equity		$	354,999				$	347,362				$	7,637				2.2	%
Properties owned			151					143		(4)			8				5.6	%
Square feet owned			17,675,963					17,038,727		(4)			637,236				3.7	%
Square feet leased			99.1	%				98.7	%				0.4	%			0.4	%

(1)		Includes a $0.01 million loss on sale, net, from the sale of one property during the three months ended September 30, 2025.
(2)		Includes a $0.01 million impairment charge recognized on one property during the three months ended June 30, 2025.
(3)		Includes a $0.4 million gain on sale, net, from the sale of one property during the three months ended June 30, 2025.
(4)		Includes one property classified as held for sale of $3.4 million and 56,000 square feet.

Third Quarter Activity:

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

• Acquired properties: Purchased a fully-occupied, six-facility portfolio, with an aggregate of 693,236 square feet of rental space, for $54.8 million, at a weighted average cap rate of 9.53%;

• Sold properties: Sold one non-core industrial property as part of our capital recycling strategy for $3.0 million;

• Completed leasing activity: Completed leasing activity on 734,464 square feet of property with remaining lease terms ranging from 0.7 years to 11.4 years at 14 of our properties;

• Issued common stock under ATM Program: Issued 1,891,807 shares of common stock under our at-the-market ("ATM") program for net proceeds of $23.0 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 2025 Results: Core FFO available to common shareholders and Non-controlling OP Unitholders for the three months ended September 30, 2025 was $16.4 million, a 1.8% increase when compared to the three months ended June 30, 2025, equaling $0.35 per share. Core FFO increased primarily due to higher revenues from year to date acquisitions and leasing activity, partially offset by an increase in interest expense from higher outstanding variable rate debt and higher general and administrative expenses.

Net income available to common stockholders and Non-controlling OP Unitholders for the three months ended September 30, 2025 was $1.0 million, or $0.02 per share, compared to net income available to common stockholders and Non-controlling OP Unitholders for the three months ended June 30, 2025 of $1.5 million, or $0.03 per share. In the Summary Information table above, we provide a reconciliation of Core FFO to net income (which we believe is the most directly comparable GAAP measure to Core FFO) for the three months ended September 30, 2025 and June 30, 2025, 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 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;

• Amended, extended, and upsized credit facility: Increased our revolver from $155.0 million to $200.0 million and increased our aggregate term loan component from $350.0 million to $400.0 million. The revolver maturity was extended to October 2029 and Term Loan A and Term Loan B components maturity were extended to October 2029 and February 2030, respectively. In total, the credit facility increased to $600.0 million;

• Repaid debt: Repaid $3.1 million in fixed rate mortgage debt at an interest rate of 4.59%; and

• Declared distributions: Declared monthly cash distributions for October, November, and December 2025, 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 2024 and 2025, and our ability to renew tenants. 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 to acquire properties in our target growth markets. We have successfully exited two non-core assets thus far in 2025, and we have additional non-core assets we anticipate selling over the next one to two years. 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, inflation with corresponding high 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 2025, we completed leasing activity on 857,481 square feet of property with 12 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 4, 2025, at 8:30 a.m. Eastern Time to discuss its earnings results. Please call (877) 407-9045 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 11, 2025. To hear the replay, please dial (877) 660-6853 and use playback conference number 13755539. 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 statementsinclude, 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, 2024, as filed with the SEC on February 18, 2025, 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 ACCESS Newswire

FAQ

What were Gladstone Commercial (GOOD) Core FFO and Core FFO per share for Q3 2025?

Core FFO was $16.4M, equal to $0.35 per share for Q3 2025.

How did Gladstone Commercial (GOOD) net income for Q3 2025 compare to Q2 2025?

Net income available to commonholders was $1.0M (≈ $0.02/share), down about 32.5% versus Q2 2025.

What property acquisitions did Gladstone Commercial (GOOD) complete in Q3 2025?

Acquired a fully occupied six-facility portfolio totaling 693,236 sq ft for $54.8M at a 9.53% cap rate.

How much capital did Gladstone Commercial (GOOD) raise under its ATM in Q3 2025?

Issued 1,891,807 shares under the ATM program for net proceeds of $23.0M.

Did Gladstone Commercial (GOOD) collect tenant rents during Q3 and October 2025?

Yes. The company reported collecting 100% of cash rents due in July–September and 100% of October rents.

What changes did Gladstone Commercial (GOOD) make to its credit facility after Q3 2025?

The company increased the revolver to $200M, term loans to $400M, and expanded the total facility to $600M with extended maturities.