Gladstone Commercial Corporation Provides a Business Update
Gladstone Commercial (Nasdaq: GOOD) provided a business update on May 20, 2020, emphasizing portfolio performance amidst COVID-19. Key highlights include a portfolio occupancy rate of approximately 97% and a cash base rent collection rate of around 98% for May, consistent with April. The company anticipates additional rent relief requests but cannot estimate the impact of negotiations. Core Funds From Operations for Q1 were $13.8 million, a 4.2% increase from the previous quarter. The firm maintained cash distributions at $0.12515 per share for April, May, and June, and has over $30 million in liquidity.
- Portfolio occupancy remains high at approximately 97%.
- Consistent cash base rent collection at about 98% for May.
- Core Funds From Operations increased by 4.2% to $13.8 million in Q1.
- Maintained cash distributions of $0.12515 per share for April, May, and June.
- Liquidity exceeds $30 million.
- Anticipated additional rent relief requests from tenants due to COVID-19 impact.
- Uncertainty regarding the outcomes of negotiations for rent relief.
MCLEAN, Va., May 20, 2020 (GLOBE NEWSWIRE) -- Gladstone Commercial Corporation (Nasdaq: GOOD) (“Gladstone Commercial”) is providing the following business update regarding portfolio performance during this time of market volatility related to the global COVID-19 pandemic.
Our primary focus continues to be managing the existing portfolio to maintain cash flow, maximize profitability and shareholder value, with the following highlights:
- Portfolio occupancy remains at approximately
97% as of May 20, 2020. - Approximately
98% of May cash base rent has been paid and collected. May rental collections remain consistent with98% of April cash base rent that was paid and collected. Remaining2% of cash base rents are associated with the previously agreed to deferral agreements. All deferred amounts are to be paid back by the respective tenants commencing in July 2020 and ending in March 2021.
Gladstone Commercial has received additional rent relief requests from certain tenants and reasonably expects to receive more of such requests in the near term. Gladstone Commercial’s acquisitions and asset management teams intend to predominantly seek extended lease term, increased rent, near term rent deferral repayment, and other favorable lease modifications as consideration for granting relief for certain tenants that have been materially and adversely impacted by the ongoing COVID-19 pandemic, as assessed by us. However, Gladstone Commercial is unable to quantify the outcomes of the negotiation of relief packages, the success of any tenant’s financial prospects or the amount of relief requests that we will ultimately receive or grant.
On April 28, 2020 we reported increased core Funds From Operations (“Core FFO”) for the First Quarter ended March 31, 2020.
- In January, we announced an increase in our cash distributions to common stockholders for January, February and March 2020;
- Core FFO available to common shareholders and non-controlling OP unitholders for the three months ended March 31, 2020, was
$13.8 million , or$0.40 per share, a4.2% increase when compared to the three months ended December 31, 2019; and - During the quarter we purchased five fully-occupied industrial properties for
$72 million , with approximately 0.9 million square feet of total rental space, at a weighted average cap rate of7.2% and a weighted average lease term of 14.8 years. We renewed three leases totaling 232,600 square feet with remaining lease terms ranging from 6.4 to 8.2 years.
Subsequent to quarter end we have continued to execute our business plan and are encouraged by our results.
- On April 14th, we announced that cash distributions for the months of April, May and June were left unchanged from the prior quarter, inclusive of a
$0.12 515 monthly cash distribution per common share; - On May 5th, we announced a lease extension with Elster Solutions, LLC, a wholly owned subsidiary of Honeywell International Inc., at our 58,926 square foot office building in Raleigh, North Carolina. The lease extension resulted in a
14% increase in GAAP rent and maintains the property’s100% occupancy; - Additionally, Gladstone Commercial and Elster executed an extension at an adjacent manufacturing facility where Elster leases 22,198 square feet, approximately
20% of the space, with the remainder of the building fully leased to another tenant through 2027. GAAP rent increased approximately11% as a result of the extension; - Additionally, Gladstone Commercial and Bosch Security Systems, Inc. executed a 23-month lease extension at our Burnsville, MN office property extending Bosch’s lease from February 2021 through January 2023. GAAP rent increased approximately
19% because of the extension; and - As of May 20th, our currently available liquidity is in excess of
$30 million via our revolving credit facility availability and cash on hand.
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, 2020, Gladstone Commercial’s real estate portfolio consisted of 122 properties located in 28 states, totaling approximately 15.1 million square feet. For additional information please visit www.gladstonecommercial.com
For Broker Submittals:
| 40%; width: | 60%; width: |
| Buzz Cooper | Matt Tucker |
| Senior Managing Director | Senior Managing Director |
| (703) 287-5815 | (703) 287-5830 |
| Buzz.Cooper@gladstonecompanies.com | Matt.Tucker@gladstonecompanies.com |
| Southeast / West: | |
| Brandon Flickinger | |
| Managing Director | |
| (703) 287-5819 | |
| Brandon.Flickinger@gladstonecompanies.com |
Investor or Media Inquiries:
| Bob Cutlip | |
| President – Gladstone Commercial Corporation | |
| (703) 287-5878 | |
| Bob.Cutlip@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 the 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 caption “Risk Factors” of the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC on February 12, 2020 and certain other filings we make 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.
For Investor Relations inquiries related to any of the monthly dividend paying Gladstone funds, please visit www.gladstone.com.
SOURCE: Gladstone Commercial Corporation
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