Gladstone Commercial Provides a Business Update

Rhea-AI Summary

Gladstone Commercial Corporation (Nasdaq: GOOD) reported strong portfolio performance despite market volatility due to COVID-19. As of June 30, 2021, almost 100% of cash base rents were collected, with occupancy over 95%. The company announced a new acquisition of an industrial facility in Texas, leased to Mobile Mini for 12.7 years at a 7.1% cap rate. Notable lease extensions and new agreements further solidify revenue streams. Additionally, the company raised about $96.7 million via preferred stock offerings, enhancing liquidity with approximately $33 million available.

Positive

• Almost 100% of cash base rents collected for June, with occupancy exceeding 95%.
• Acquired a 25,200 sq. ft. industrial facility in Texas for $8.125 million, leased to Mobile Mini with a 7.1% cap rate.
• Successful six-year lease extension with Yanfeng US Automotive Interior Systems, increasing straight-line rent by 9.6%.
• Signed a new lease with Lyseon North America for a previously vacant facility, ensuring long-term occupancy.
• Raised approximately $96.7 million through preferred stock offering, reducing dividend rate and improving core FFO performance.
• Strong liquidity position with about $33 million available as of June 30, 2021.

Negative

• Potential rent relief requests may arise as the pandemic continues, creating uncertainty around future cash flows.

MCLEAN, VA / ACCESSWIRE / July 6, 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 100% of June cash base rents have been paid and collected. Portfolio occupancy is in excess of 95%, as of June 30, 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. On June 17, 2021, we announced the acquisition of a 25,200 square foot industrial service facility situated on 10.2 acres, in Baytown, Texas for $8.125 million. The property is 100% leased by Mobile Mini, Inc., a wholly-owned subsidiary of a leading storage solutions provider, WillScot Mobile Mini (Nasdaq: WSC), with 12.7 years of remaining lease term. Constructed in 2019, Mobile Mini utilizes the property to store its modular mobile storage solutions and tank/pump products. The GAAP capitalization rate on the investment is 7.1%.
• Our leasing initiatives continue to be successful. On June 24, 2021, we announced a six-year lease extension through August 31, 2029, with Yanfeng US Automotive Interior Systems LLC at our 315,000 square foot industrial facility in Monroe, Michigan, a suburb of Detroit. The lease extension increased our straight-line rent by 9.6%. Yanfeng is a global leader in automotive interiors and occupies 100% of the building with expansion rights to accommodate growing demand.
• On July 1, 2021, we commenced a new lease through December 31, 2033, with Lyseon North America, Inc. at our 238,312 square foot industrial facility located at the Port of Catoosa outside of Tulsa, Oklahoma. The tenant, a wholly owned subsidiary of Topia Co., LTD., occupies 100% of the building, which was previously vacant. Lyseon will use the facility for manufacturing in support of their contract with Navistar's subsidiary IC bus.
• 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 $96.7 million in net proceeds, which was used to fully redeem the previously outstanding 7.00% Series D Cumulative Redeemable Preferred Stock. With a decreased dividend rate of 1%, the execution will create significant annual savings and is expected to benefit core FFO performance. In addition, we have continued to raise equity capital through our ATM program. Since January 1, 2021, we have issued approximately 1 million shares of common stock for net proceeds of $19.5 million.
• We continue to have ample liquidity and a strong capital structure. As of June 30, 2021, our current available liquidity was approximately $33 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
Executive Vice President
(703) 287-5815
Buzz.Cooper@gladstonecompanies.com

Northeast/Midwest:

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

Southeast:

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

West:

Mac Dobbins
Senior Associate
(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 are the recent financial results for Gladstone Commercial Corporation (GOOD)?

Gladstone Commercial reported nearly 100% collection of cash base rents for June and over 95% portfolio occupancy.

What acquisitions has Gladstone Commercial made recently?

Gladstone acquired a 25,200 sq. ft. industrial facility in Baytown, Texas for $8.125 million, fully leased to Mobile Mini.

What recent lease extensions were announced by Gladstone Commercial (GOOD)?

The company announced a six-year lease extension with Yanfeng US Automotive Interior Systems, increasing straight-line rent by 9.6%.

How is Gladstone Commercial (GOOD) managing liquidity amid COVID-19?

Gladstone maintains a strong liquidity position with approximately $33 million available, supported by recent capital raises.

What are the implications of potential rent relief requests for Gladstone Commercial (GOOD)?

Future rent relief requests may affect cash flows, though the outcomes of such requests are currently uncertain.