In This Article:
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 / May 7, 2025 / Gladstone Commercial Corporation (Nasdaq:GOOD) ("Gladstone Commercial" or the "Company") today reported financial results for the first quarter ended March 31, 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 | |||||||||||||||||||
| March 31, 2025 | December 31, 2024 | $ Change | % Change | ||||||||||||||||
| Operating Data: | |||||||||||||||||||
| Total operating revenue | $ | 37,501 | $ | 37,375 | $ | 126 | 0.3 | % | |||||||||||
| Total operating expenses | (23,858 | ) | (24,974 | ) | (2) | 1,116 | (4.5 | )% | |||||||||||
| Other (expense) income, net | (8,507 | ) | (5,208 | ) | (3) | (3,299 | ) | 63.3 | % | ||||||||||
| Net income | $ | 5,136 | $ | 7,193 | $ | (2,057 | ) | (28.6 | )% | ||||||||||
| Less: Dividends attributable to preferred stock | (3,108 | ) | (3,106 | ) | (2 | ) | 0.1 | % | |||||||||||
| Less: Dividends attributable to senior common stock | (101 | ) | (104 | ) | 3 | (2.9 | )% | ||||||||||||
| Less: Loss on extinguishment of Series F preferred stock, net | (10 | ) | (9 | ) | (1 | ) | 11.1 | % | |||||||||||
| Net income available to common stockholders and Non-controlling OP Unitholders | $ | 1,917 | $ | 3,974 | $ | (2,057 | ) | (51.8 | )% | ||||||||||
| Add: Real estate depreciation and amortization | 13,243 | 13,102 | 141 | 1.1 | % | ||||||||||||||
| Add: Impairment charge | - | 1,780 | (1,780 | ) | (100.0 | )% | |||||||||||||
| Less: Gain on sale of real estate, net | - | (3,674 | ) | 3,674 | (100.0 | )% | |||||||||||||
| Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic | $ | 15,160 | $ | 15,182 | $ | (22 | ) | (0.1 | )% | ||||||||||
| Add: Convertible senior common distributions | 101 | 104 | (3 | ) | (2.9 | )% | |||||||||||||
| Funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted | $ | 15,261 | $ | 15,286 | $ | (25 | ) | (0.2 | )% | ||||||||||
| Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic | $ | 15,160 | $ | 15,182 | $ | (22 | ) | (0.1 | )% | ||||||||||
| Add: Asset retirement obligation expense | 34 | 34 | - | - | % | ||||||||||||||
| Core funds from operations available to common stockholders and Non-controlling OP Unitholders - basic | $ | 15,194 | $ | 15,216 | $ | (22 | ) | (0.1 | )% | ||||||||||
| Add: Convertible senior common distributions | 101 | 104 | (3 | ) | (2.9 | )% | |||||||||||||
| Core funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted | $ | 15,295 | $ | 15,320 | $ | (25 | ) | (0.2 | )% | ||||||||||
| Share and Per Share Data: | |||||||||||||||||||
| Net income available to common stockholders and Non-controlling OP Unitholders - basic and diluted | $ | 0.04 | $ | 0.09 | $ | (0.05 | ) | (55.6 | )% | ||||||||||
| FFO available to common stockholders and Non-controlling OP Unitholders - basic | $ | 0.34 | $ | 0.35 | $ | (0.01 | ) | (2.9 | )% | ||||||||||
| FFO available to common stockholders and Non-controlling OP Unitholders - diluted | $ | 0.34 | $ | 0.35 | $ | (0.01 | ) | (2.9 | )% | ||||||||||
| Core FFO available to common stockholders and Non-controlling OP Unitholders - basic | $ | 0.34 | $ | 0.35 | $ | (0.01 | ) | (2.9 | )% | ||||||||||
| Core FFO available to common stockholders and Non-controlling OP Unitholders - diluted | $ | 0.34 | $ | 0.35 | $ | (0.01 | ) | (2.9 | )% | ||||||||||
| Weighted average shares of common stock and Non-controlling OP Units outstanding - basic | 44,646,486 | 43,963,909 | 682,577 | 1.6 | % | ||||||||||||||
| Weighted average shares of common stock and Non-controlling OP Units outstanding - diluted | 44,975,890 | 44,294,365 | 681,525 | 1.5 | % | ||||||||||||||
| Cash dividends declared per common share and Non-controlling OP Unit | $ | 0.30 | $ | 0.30 | $ | - | - | % | |||||||||||
| Financial Position | |||||||||||||||||||
| Real estate, before accumulated depreciation | $ | 1,287,663 | (1) | $ | 1,219,918 | (1) | $ | 67,745 | 5.6 | % | |||||||||
| Total assets | $ | 1,160,443 | $ | 1,094,348 | $ | 66,095 | 6.0 | % | |||||||||||
| Mortgage notes payable, net, borrowings under revolver, borrowings under term loan, net, and senior unsecured notes, net | $ | 740,746 | $ | 693,385 | $ | 47,361 | 6.8 | % | |||||||||||
| Total equity and mezzanine equity | $ | 353,393 | $ | 341,342 | $ | 12,051 | 3.5 | % | |||||||||||
| Properties owned | 141 | (1) | 135 | (1) | 6 | 4.4 | % | ||||||||||||
| Square feet owned | 17,255,665 | (1) | 16,899,887 | (1) | 355,778 | 2.1 | % | ||||||||||||
| Square feet leased | 98.4 | % | 98.7 | % | (0.3 | )% | (0.3 | )% | |||||||||||
| (1) | Includes two properties classified as held for sale of $8.1 million and 736,031 square feet, in the aggregate. |
| (2) | Includes a $1.8 million impairment charge recognized on one property during the three months ended December 31, 2024. |
| (3) | Includes a $3.7 million gain on sale, net, from the sale of one property and a selling profit from sales-type leases, during the three months ended December 31, 2024. |
First Quarter Activity:
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Collected 100% of cash rents: Collected 100% of cash rents due during January, February, and March;
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Acquired properties: Purchased six fully-occupied properties, with an aggregate of 355,778 square feet of rental space, for $73.7 million, at a weighted average cap rate of 8.39%;
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Renewed or leased space: Renewed or leased 67,709 square feet with a remaining lease term of 3.0 years at one of our properties;
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Issued common stock under ATM Program: Issued 1,770,581 shares of common stock for net proceeds of $27.7 million;
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Issued Series F Preferred Stock: Issued 13,500 shares of our Series F Preferred Stock for net proceeds of $0.3 million; and
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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.