Gladstone Commercial Provides a Business Update

Rhea-AI Summary

Gladstone Commercial Corporation (NASDAQ:GOOD) reported strong portfolio performance amidst COVID-19 challenges. As of July 31, 2021, 99% of cash base rents were collected and occupancy exceeded 96%. The company acquired $41.125 million in industrial properties in 2021, maintaining a growth strategy with an average GAAP capitalization rate of 7.7%. Recent lease extensions achieved a 13% increase in straight-line rents. Gladstone successfully raised approximately $96.6 million through preferred stock offerings and maintains $27.5 million in available liquidity.

Positive

• 99% of July cash base rents collected.
• Portfolio occupancy over 96%.
• Acquired $41.125 million in properties with an average GAAP cap rate of 7.7%.
• Increased straight-line rents by approximately 13% on lease extensions.
• Raised approximately $96.6 million through preferred stock offerings, reducing dividend rate.
• Maintained $27.5 million in available liquidity.

Negative

• Potential for future rent relief requests due to ongoing pandemic effects.

MCLEAN, VA / ACCESSWIRE / August 4, 2021 / Gladstone Commercial Corporation (NASDAQ:GOOD) ("we" or "Gladstone Commercial") is a real estate investment trust ("REIT") focused on acquiring, owning and operating net leased industrial and office properties across the United States. We are providing the following business update regarding our portfolio performance during a time of market volatility related to, among other factors, the global COVID-19 pandemic.

• Approximately 99% of July cash base rents have been paid and collected. Portfolio occupancy is in excess of 96%, as of July 31, 2021.
• We remain within a small subset of U.S. equity REITs that have maintained their dividend rate and payment of distributions in tandem with this high level of rental collections during the COVID-19 pandemic.
• We continue to execute our growth strategy. Year-to-date, we have acquired $41.125 million of industrial properties, totaling 285,956 square feet, across four properties, at an average GAAP capitalization rate of 7.7%, with a weighted average lease term of 15.6 years.
• On July 21, 2021, we announced the acquisition of an 80,604 square foot industrial facility on 18.6 acres with significant outdoor storage in Pacific (St. Louis), Missouri for $22.0 million. The initial capitalization rate for the acquisition was 6.6%, with a GAAP capitalization rate of 7.5%. The property is 100% leased to ADB Companies, LLC, with 17.4 years of remaining absolute NNN lease term. ADB Companies is an infrastructure solutions provider within the telecom and power sectors, offering a full suite of infrastructure construction services from design through repairs.
• Our leasing initiatives continue to be successful. We increased straight-line rents an average of approximately 13% on the two lease extensions announced in July. On July 14, 2021, we announced a seven-year, nine-month lease extension with Power Engineers Incorporated ("Power") at our Burnsville, Minnesota office property for their current 12,663 square foot suite. Power services the Power Delivery, Power Generation, Renewables & Storage, Food & Beverage, Government, Agribusiness, Campus Energy, Oil & Gas and Petrochemical industries. This lease renewal continues Power's existing tenancy that began in 2016.
• On July 26, 2021, we announced a ten-year lease renewal for our entire 60,245 square foot, single story flex office building, located at 6550 First Park Ten in San Antonio, Texas. The property is leased to PIMA Medical Institute, which operates a medical trade school at the building and has been at the location since 2018.
• We have continued to raise additional capital through our equity capital markets initiatives to fund acquisitions and operating needs. On June 21, 2021, we announced a public offering of 6.00% Series G Cumulative Redeemable Preferred Stock, raising approximately $96.6 million in net proceeds, which we used to fully redeem the previously outstanding 7.00% Series D Cumulative Redeemable Preferred Stock, resulting in a decreased dividend rate of 1 percentage point. The execution created significant annual savings and will benefit core FFO performance. In addition, we have continued to raise equity capital through our common stock ATM program. Since January 1, 2021, and through July 31, 2021, we have issued 1.1 million shares of common stock for net proceeds of $21.2 million.
• We continue to have ample liquidity and a strong capital structure. As of July 31, 2021, our current available liquidity is approximately $27.5 million via our revolving credit facility and cash on hand.

We have experienced successful rent collection during the COVID-19 pandemic; however, we may receive additional rent relief requests as the pandemic continues to adversely affect business operations. However, we are unable to quantify the outcomes of potential future 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.

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, 2021, Gladstone Commercial's real estate portfolio consisted of 120 properties located in 27 states, totaling approximately 15.5 million square feet. For additional information please visit www.gladstonecommercial.com.

For Broker Submittals:

Southcentral:

Buzz Cooper
Chief Investment Officer
Executive Vice President
(703) 287-5815
Buzz.Cooper@gladstonecompanies.com

Northeast/Midwest:

Todd McDonald
Associate
(703) 287-5895
Todd.McDonald@gladstonecompanies.com

Southeast:

EJ Wislar
Senior Vice President
Director
(703) 462-1027
EJ.Wislar@gladstonecompanies.com

West:

Mac Dobbins
Principal
(703) 287-5845
Mac.Dobbins@gladstonecompanies.com

Investor or Media Inquiries:

Bob Cutlip
President
(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, 2020, as filed with the SEC on February 16, 2021, 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.gladstonecompanies.com.

SOURCE: Gladstone Commercial Corporation

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FAQ

What was the cash rent collection rate for Gladstone Commercial in July 2021?

Gladstone Commercial collected approximately 99% of cash base rents in July 2021.

What is the current occupancy rate of Gladstone Commercial's portfolio?

As of July 31, 2021, portfolio occupancy was over 96%.

How much has Gladstone Commercial invested in industrial properties this year?

In 2021, Gladstone Commercial has acquired $41.125 million worth of industrial properties.

What was the average GAAP capitalization rate for Gladstone Commercial's acquisitions?

The average GAAP capitalization rate for acquisitions in 2021 was 7.7%.

How much liquidity does Gladstone Commercial currently have?

As of July 31, 2021, Gladstone Commercial has approximately $27.5 million in available liquidity.