Gladstone Commercial Announces Industrial Acquisition in Warfordsburg, PA

Rhea-AI Summary

Gladstone Commercial (NASDAQ:GOOD) has acquired a 142,125 square foot industrial facility in Warfordsburg, PA for $11.7 million. The property is 100% leased in a long-term sale-leaseback deal with a credit-worthy tenant. The acquisition aligns with Gladstone Commercial's strategy of acquiring industrial assets in strong markets.

Positive

• Acquisition of a functional industrial facility in a strategic location.

• Long-term sale-leaseback transaction with a credit-worthy tenant.

• Improvement in weighted average lease term and industrial concentration.

Negative

• Potential risks associated with a single tenant lease arrangement.

Insights

Real Estate Investment Analyst

The acquisition by Gladstone Commercial Corporation of a large industrial facility in Warfordsburg, PA, represents a strategic move within the industrial real estate sector. The purchase price of $11.7 million for this 142,125 square foot facility, coupled with a GAAP capitalization rate of 12.3%, suggests a robust yield compared to the current low-interest-rate environment. The absolute NNN lease for 25 years with a single tenant provides predictable cash flow and eliminates most operating expense volatility, a highly attractive feature for investors focused on stable returns. Given the tenant is a provider of processing services and equipment, which implies a level of specialization and potential stickiness, this could further reduce tenancy risks. The property's role as a headquarters and primary service facility reinforces its 'mission-critical' status, lessening the likelihood of vacancy. These factors combined indicate a positive effect on Gladstone's portfolio by extending their average lease term and increasing their industrial asset concentration, which is in line with their current growth strategy. This move may be seen favorably by investors who appreciate the added stability and potential for steady income it brings to the REIT’s portfolio.

Market Research Analyst

From a market perspective, Gladstone's investment aligns with broader trends in the industrial real estate market, where there is continued demand for industrial spaces, particularly those with infrastructure-related uses. The location in southern Pennsylvania is strategic, likely benefitting from the region's robust transportation network and its proximity to major markets, which could serve as positive indicators for the property's long-term value appreciation. Additionally, the industrial market has been experiencing a surge in e-commerce, which has driven demand for distribution and service facilities. While this property is not directly tied to retail distribution, the overall market dynamics could buoy its value. Investors should consider these broader industrial market trends as they could influence the property's future performance and, by extension, Gladstone Commercial's stock.

MCLEAN, VA / ACCESSWIRE / May 8, 2024 / Gladstone Commercial Corporation (NASDAQ:GOOD) ("Gladstone Commercial") has acquired a 142,125 square foot industrial manufacturing, distribution, and service facility situated on nearly 115 acres in Warfordsburg, Pennsylvania, for a total purchase price of $11.7 million at a weighted GAAP capitalization rate of 12.3%.

The property was acquired in a long-term sale-leaseback transaction with a 25-year absolute NNN lease. The property is 100% leased to a provider of processing services and equipment for infrastructure end markets. The acquisition is consistent with Gladstone Commercial's growth strategy of acquiring functional assets leased to credit-worthy tenants in strong industrial markets.

"We are excited to partner with another quality tenant in a long-term sale-leaseback transaction. This transaction adds another well located, functional industrial asset in a southern Pennsylvania market with strong underlying fundamentals. The property is mission critical to the tenant, serving as its headquarters and primary service facility," stated Nick Lindsay, Vice President of Gladstone Commercial.

"This transaction continues our core strategy of acquiring mission critical, industrial facilities in growth markets. This investment is a great addition to our portfolio, as it improves our weighted average lease term and increases our industrial concentration, providing yet another case study for our industrial sale-leaseback platform," said Buzz Cooper, President of Gladstone Commercial.

About Gladstone Commercial (Nasdaq: GOOD)

Gladstone Commercial is a real estate investment trust focused on acquiring, owning and operating net leased industrial and office properties across the United States. As of March 31, 2024, Gladstone Commercial's real estate portfolio consisted of 132 properties located in 27 states, totaling approximately 16.7 million square feet. For additional information, please visit www.gladstonecommercial.com.

For Broker Submittals:

Southeast/Northeast	South Central:
Nick Lindsay	Todd Alan McDonald
Vice President	Senior Vice President
(703) 966-3864	(703) 287-5895
Nick.Lindsay@gladstonecompanies.com	Todd.McDonald@gladstonecompanies.com
Midwest/West
Ryan Carter
Executive Vice President
(571) 451-0019
Ryan.Carter@gladstonecompanies.com

Investor or Media Inquiries:

Buzz Cooper	Catherine Gerkis
President	Director of Investor Relations/ESG
(703) 287-5815	(703) 287-5846
Buzz.Cooper@gladstonecompanies.com	Catherine.Gerkis@gladstonecompanies.com

All statements contained in this press release, other than historical facts, may constitute "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. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements. Readers should not rely upon forward-looking statements because the matters they describe are subject to known and unknown risks and uncertainties that could cause Gladstone Commercial's business, financial condition, liquidity, results of operations, funds from operations or prospects to differ materially from those expressed in or implied by such statements. Such risks and uncertainties are disclosed under the captions "Forward-Looking Statements" and "Risk Factors" of the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on February 22, 2023, and certain other filings made 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. The company 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.

For further information: Gladstone Commercial Corporation, (703) 287-5893

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

SOURCE: Gladstone Commercial Corporation

View the original press release on accesswire.com

FAQ

What did Gladstone Commercial acquire in Warfordsburg, PA?

Gladstone Commercial acquired a 142,125 square foot industrial facility in Warfordsburg, PA.

What was the total purchase price of the acquisition?

The total purchase price for the acquisition was $11.7 million.

Who is the tenant of the property?

The property is 100% leased to a provider of processing services and equipment for infrastructure end markets.

What is the lease term for the property?

The property was acquired in a long-term sale-leaseback transaction with a 25-year absolute NNN lease.

What is Gladstone Commercial's growth strategy?

Gladstone Commercial's growth strategy involves acquiring functional assets leased to credit-worthy tenants in strong industrial markets.