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 / ACCESSWIRE / November 4, 2024 / Gladstone Commercial Corporation (Nasdaq:GOOD) ("Gladstone Commercial" or the "Company") today reported financial results for the third quarter ended September 30, 2024. 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 | ||||||||||||||||||
| September 30, 2024 | June 30, 2024 | $ Change | % Change | |||||||||||||||
| Operating Data: | ||||||||||||||||||
| Total operating revenue | $ | 39,235 | $ | 37,057 | $ | 2,178 | 5.9 | % | ||||||||||
| Total operating expenses | (28,546 | ) | (1) | (25,973 | ) | (2,573 | ) | 9.9 | % | |||||||||
| Other income (expense), net | 1,032 | (2) | (9,484 | ) | (4) | 10,516 | (110.9 | )% | ||||||||||
| Net income | $ | 11,721 | $ | 1,600 | $ | 10,121 | 632.6 | % | ||||||||||
| Less: Dividends attributable to preferred stock | (3,106 | ) | (3,116 | ) | 10 | (0.3 | )% | |||||||||||
| Less: Dividends attributable to senior common stock | (106 | ) | (105 | ) | (1 | ) | 1.0 | % | ||||||||||
| Add/Less: Gain (loss) on extinguishment of Series F preferred stock, net | 2 | (4 | ) | 6 | (150.0 | )% | ||||||||||||
| Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders | $ | 8,511 | $ | (1,625 | ) | $ | 10,136 | (623.8 | )% | |||||||||
| Add: Real estate depreciation and amortization | 13,343 | 16,015 | (2,672 | ) | (16.7 | )% | ||||||||||||
| Add: Impairment charge | 4,549 | - | 4,549 | 100.0 | % | |||||||||||||
| Add: Loss on sale of real estate, net | - | 47 | (47 | ) | (100.0 | )% | ||||||||||||
| Less: Gain on sale of real estate, net | (10,319 | ) | - | (10,319 | ) | 100.0 | % | |||||||||||
| Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic | $ | 16,084 | $ | 14,437 | $ | 1,647 | 11.4 | % | ||||||||||
| Add: Convertible senior common distributions | 106 | 105 | 1 | 1.0 | % | |||||||||||||
| Funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted | $ | 16,190 | $ | 14,542 | $ | 1,648 | 11.3 | % | ||||||||||
| Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic | $ | 16,084 | $ | 14,437 | $ | 1,647 | 11.4 | % | ||||||||||
| Add: Bad debt write off | - | 64 | (64 | ) | (100.0 | )% | ||||||||||||
| Add: Asset retirement obligation expense | 33 | 33 | - | - | % | |||||||||||||
| Add: Realized loss on interest rate hedging instruments | 51 | - | 51 | 100.0 | % | |||||||||||||
| Core funds from operations available to common stockholders and Non-controlling OP Unitholders - basic | $ | 16,168 | $ | 14,534 | $ | 1,634 | 11.2 | % | ||||||||||
| Add: Convertible senior common distributions | 106 | 105 | 1 | 1.0 | % | |||||||||||||
| Core funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted | $ | 16,274 | $ | 14,639 | $ | 1,635 | 11.2 | % | ||||||||||
| Share and Per Share Data: | ||||||||||||||||||
| Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders - basic and diluted | $ | 0.20 | $ | (0.04 | ) | $ | 0.24 | (600.0 | )% | |||||||||
| FFO available to common stockholders and Non-controlling OP Unitholders - basic | $ | 0.38 | $ | 0.36 | $ | 0.02 | 5.6 | % | ||||||||||
| FFO available to common stockholders and Non-controlling OP Unitholders - diluted | $ | 0.38 | $ | 0.36 | $ | 0.02 | 5.6 | % | ||||||||||
| Core FFO available to common stockholders and Non-controlling OP Unitholders - basic | $ | 0.38 | $ | 0.36 | $ | 0.02 | 5.6 | % | ||||||||||
| Core FFO available to common stockholders and Non-controlling OP Unitholders - diluted | $ | 0.38 | $ | 0.36 | $ | 0.02 | 5.6 | % | ||||||||||
| Weighted average shares of common stock and Non-controlling OP Units outstanding - basic | 42,830,159 | 40,553,113 | 2,277,046 | 5.6 | % | |||||||||||||
| Weighted average shares of common stock and Non-controlling OP Units outstanding - diluted | 43,169,458 | 40,895,360 | 2,274,098 | 5.6 | % | |||||||||||||
| Cash dividends declared per common share and Non-controlling OP Unit | $ | 0.30 | $ | 0.30 | $ | - | - | % | ||||||||||
| Financial Position | ||||||||||||||||||
| Real estate, before accumulated depreciation | $ | 1,238,271 | (3) | $ | 1,239,476 | (5) | $ | (1,205 | ) | (0.1 | )% | |||||||
| Total assets | $ | 1,096,315 | $ | 1,105,546 | $ | (9,231 | ) | (0.8 | )% | |||||||||
| Mortgage notes payable, net, borrowings under revolver, and borrowings under term loan, net | $ | 692,647 | $ | 722,536 | $ | (29,889 | ) | (4.1 | )% | |||||||||
| Total equity and mezzanine equity | $ | 339,087 | $ | 315,862 | $ | 23,225 | 7.4 | % | ||||||||||
| Properties owned | 135 | (3) | 136 | (5) | (1 | ) | (0.7 | )% | ||||||||||
| Square feet owned | 16,849,547 | (3) | 16,825,776 | (5) | 23,771 | 0.1 | % | |||||||||||
| Square feet leased | 98.5 | % | 98.5 | % | - | % | - | % | ||||||||||
| (1) | Includes a $4.5 million impairment charge recognized on one property during the three months ended September 30, 2024. | |
| (2) | Includes a $10.3 million gain on sale, net, from the sale of two properties during the three months ended September 30, 2024. | |
| (3) | Includes two properties classified as held for sale of $24.0 million and 750,191 square feet, in the aggregate. | |
| (4) | Includes a $0.05 million loss on sale, net, from the sale of one property during the three months ended June 30, 2024. | |
| (5) | Includes two properties classified as held for sale of $9.3 million and 26,331 square feet, in the aggregate. |
Third Quarter Activity:
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Collected 100% of cash rents: Collected 100% of cash rents due during July, August, and September;
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Acquired property: Purchased one fully-occupied, 50,102 square foot property for $10.2 million at a cap rate of 9.94%;
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Sold properties: Sold two non-core properties as part of our capital recycling program for an aggregate of $14.2 million;
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Renewed and leased space: Renewed or leased 242,467 square feet with remaining lease terms ranging from 6.1 to 8.9 years at five of our properties;
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Issued common stock under ATM Program: Issued 2,694,286 shares of common stock for net proceeds of $38.9 million;
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Issued Series F Preferred Stock: Issued 4,400 shares of our Series F Preferred Stock for net proceeds of $0.1 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.