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Buzz Cooper

Thank you, Michael, and thank you all for joining today's. We look forward to updating you on our quarter and year-end results, current portfolio, and our 2025 outlook. Focusing first on the broader economic environment. Last month, Donald Trump assumed office, ushering in a new administration, policy goals, and economic agenda.
Shortly thereafter, the Federal Reserve announced a pause in interest rate cuts after progress toward the 2% long-term inflation target stalled. The length of the pause is still to be determined, but in the meantime, US Treasury yields remain volatile. Looking back on 2024, industrial real estate continued to outperform in spite of numerous headwinds, including interest rate volatility, inflation, and labor disputes.
According to Cushman Wakefield, net absorption totaled 135 million square feet for the year. On par with forecasts, Q4 2024, industrial vacancy rose by 150 (Inaudible). This pace of increase was the slowest in two years, signaling that we may approach peak vacancy in the near future.
Finally, new deliveries fell in Q4 2024, to the lowest level since mid 2021, driven by high interest rates and the excess news supply we saw coming online post COVID. While industrial fundamentals held up during the year, we have yet to see capital markets fully return. According to CBRE for the year end December 31, 2024, single asset investment volume increased by 5.1% year over year to $67.9 billion.
Total commercial rate real estate volume over the same period increased by 6.4%. Moving on to our portfolio, we are once again very confident heading into the new year and quarter. During 2024, we collected 100% of cash-based rents, acquired campus properties for $26.8 million totaling 316,727 square feet, increased portfolio industrial concentration as a percentage of high straight line rent to 63%.
Renewed or extended more than 2.9 million square feet of leases at 11 properties, resulting in a $3.8 million net increase in GAAP rent. We sold 7 properties consisting of 5 office and 2 medical office properties. We increased portfolio occupancy to 98.7% as of December 31, 2024. And we closed on a 75 million private placement of senior unsecured notes.
While we remain focused on increasing our industrial concentration to at least 70% in the near term, we will not compromise our underwriting standards to achieve this goal. Over the past year, we reviewed and underwrote hundreds of opportunities, many of which did not meet our target criteria.
We saw numerous opportunities with credits that showed cracks in the face of rate increases or real estate that was overpriced due to inflation or eager purchasers. We will not loosen our underwriting standards to acquire those assets, and we are confident our discipline approach will drive long-term value as evidenced by the private placement we did close in December.
Looking forward to 2025, we firmly believe that we are well positioned to capitalize on the right opportunities regardless of the economic environment. With more than $98 million in availability via our line of credit and cash on hand, we remain well positioned to deploy capital into accretive industrial acquisitions. Several opportunities are currently under exclusivity or contract, with closing expected in the coming months.
Our portfolio continues to generate sustainable cash flow. We are more than 98% occupied as of December 31, and we have not seen our tenant credit quality deteriorate in the face of higher for longer interest rates. Our portfolio management team has done a superb job over the last year and will continue to dispose of non-core office assets.
Finally, our balance sheet is further strengthened by the private placement with the potential for follow on offerings in the future. We will continue to be mindful of our overall leverage as we grow our balance sheet and portfolio of mission critical assets. I will now turn the call over to Gary to review our financial results for the quarter and liquidity position. Gary.

Gary Gerson

Thank you, Buzz. Good morning, everyone. I'll start my remarks regarding our financial results this morning by reviewing our operating results for the fourth quarter of 2024. All per share numbers referenced are based on fully diluted weighted average common shares.
FFO and core FFO per share available to common stockholders with both $0.35 per share for the quarter. FFO and core FFO available to common stockholders during the fourth quarter of 2023 or both $0.36 per share. FFO and FFO for the 12 months ended December 31 with $1.41 and $1.42 per share respectively. FFO and core FFO for the same period in 2023 $1.46 and $1.47 per share respectively.
Same store rents increased by 5% in three months ended December 31, over the same period in 2023 due to increased straight line rent rates and recovery revenue associated with one of our properties.
Our same store rent for the year ended December 2024 increased by 2.3% over the same time period in 2023 due to an increase in recovery revenue from property operating expenses and a settlement received at one of our properties related to deferred maintenance during the current period, partially offset by accelerated rent attributable to a lease terminated in the prior period.
Our fourth quarter results reflected total operating revenues of $37.4 million with operating expenses of $25 million as compared to operating revenues of $35.9 million and operating expenses of $28.1 million for the same period in 2023. Operating revenues were higher in 2024 due to increased straight line rental rates and recovered revenue associated with one of our properties.
Expenses were higher in 2023 in the 2023 period, mainly due to larger impairment charges offset by higher property operating expenses in 2024. Looking at our debt profile, 49% is fixed rate, 50% is hedge floating rate, and 1% is floating rate, which is the amount drawn on our revolving credit facility and one mortgage note.
As of December 31, our effective averages so for rate was [4.49%]. Our outstanding bank term loans are hedged with $310 million of interest rate swaps and the remainder with interest rate caps. We continue to monitor interest rates closely and update our hedging strategy as needed. As of today, our 2025 loan maturities are manageable at $10.4 million. As of the end of the quarter, we have $1.9 million of revolver borrowings outstanding.
Comparing year in 2024 to 2023, we reduced overall leverage from 46.1% of gross assets to 44.1%. We reduced secured net mortgage debt from $283.9 million to $258.6 million and reduced total net debt from $726.9 million to $682.4 million. We issued $75 million of senior unsecured notes in a private placement with institutional investors entering a new market for raising long-term debt capital.
And as Buzz mentioned, we've increased our percentage of industrial from 60% to 63% and reduced our office from 36% to 33%. During the year ended December 30, 2024, we sold $3,699 and $597. Shares of common stock under our ATM program raising net proceeds of $53.5 million. We also received net proceeds of $1.1 million from the sales of our Series F preferred stock through December 31.
We continue to manage our equity activity to ensure that we have sufficient liquidity for upcoming capital requirements and new acquisition. At present we have two properties held for sale. As of today we have approximately $8 million in cash and $90 million of availability under our line of credit.
We encourage you to review our quarterly financial supplement posted on our website, which provides more detail, more detailed financial and portfolio information for the quarter. Our common stock dividend is $0.30 per share per quarter of $1.20 per year. Our stock closed yesterday at $16.04 with a yield of approximately 7.5%. And now I'll return the program back to David.

David Gladstone

Oh, that was a good report, Gary, and a good one from Buzz and Michael too. The team that we've got now is performing very well overall, a very nice quarter. And you heard today in summary during the fourth quarter. We acquired an industrial facility in St. Clair, Missouri. We spent about $5.2 million doing that, so we may have some more this month, but that's the one that we did in the last quarter.
We sold one non-performing core property, so that's gone, and we renewed leases of two of our properties, so we're still in very good shape. The commercial team is growing the real estate that we own at a good pace, and the team is doing a great job managing the partnership, the parties that will.
Especially during these challenging times, our team of strong professionals continues to pursue potential quality properties, and the list of acquisitions that we're reviewing continues to grow nicely. The acquisition team is seeking strong credit tenants. A lot of people talk about being location. We are always into who is the team that's running the business.
Okay, let's stop here and the operator if you'll come on and help some of our listeners ask a lot of good questions for this time.

Question and Answer Session

Operator

Yes, sir. (Operator Instructions).
Our first question is from Gaurav Mehta with Alliance Global Partners. Please proceed.

Gaurav Mehta

Yeah, thank you. Good morning.

David Gladstone

Morning (Multiple Speakers)

Gaurav Mehta

I wanted to ask you on your balance sheet, I was hoping to get some more colour on your leverage expectations. I think you said it's 44.1% as of Q4. And just, wanted to hear if that's close to your target, number or you expect your leverage to go lower and then, as a follow up on the balance sheet also wanted to learn, what your expectations were between secured and unsecured that makes within your capital structure.

Gary Gerson

Our goal is to continue to delever getting down, we're at 44.1%. We'd like to get that down further, probably in the lower 40s, and then, as far as secured debt, we continue to decrease that as an overall proportion of our debt and an absolute basis. So that's really where we're going with that. We want to get, build up on the unsecured debt and but overall less debt on the balance sheet.

Gaurav Mehta

Okay, second question. And then a follow up on your industrial focus I think you said 70% in the near term do you expect to achieve that 70% this year?

Buzz Cooper

We're very hopeful of that. Obviously, it's going to be in combination of acquisitions as well as dispositions, but I believe that we will, as it relates to the percentage relative to straight line rent.

Gaurav Mehta

Okay thank you that's all.I have.

Buzz Cooper

Thank you.

David Gladstone

Okay, do we have another question Operator?

Operator

Yes, our next question is from Rob Stevenson with Janney Montgomery Scott. Please proceed.

Rob Stevenson

Good morning, guys. Buzz, given your acquisition commentary, can you talk about the market debt today for the office assets that you want to sell over the next 12 months to 18 months? Are the transactions happening and, what the sort of pricing looks like these days relative to, 6 months, 12 months and18 months ago on the office side?

Buzz Cooper

Sure, thanks, Rob. And as we've been very selective on our sales. We are not looking to just sell to sell. We, our office portfolio is a vacancy factor of 7%, but as we look to sell, it's going to be opportunistic at this point in time, as well as we want to make sure that we backfill that income that we may be losing with industrial income.
So I think we will identify 4 or 5 that we will sell here during the year, but if we see something opportunistically on the sales side relative to office, we'll take it. We know it's important to continue to drive down that office portfolio, but again I would reiterate it is performing.

Rob Stevenson

Okay, and where is the 130 basis points of vacancy today? Is that aggregated in one or two assets and what's the prospects for releasing or selling those in '25?

Buzz Cooper

The majority of the occupancy, excuse me, vacancy is in one or two assets, a couple of which that will from expiring rents here, for instance, property in Carolina that's going to fall off the books at the end of March at the expiration of that lease, so we won't have that office property to re-lease or have to worry about. Majority is 1 or 2 assets, but as it relates to our overall concerns over this year.
We have two of the properties that make up approximately 3% of those leases that are coming due are scheduled to be sold or have a lease in place that they have an option to purchase. Of the others that we have specific to office, we have termed proposals on two of those buildings. And are waiting response to extending the leases.

Rob Stevenson

Okay, that's helpful. And then one for you, David, how should we be thinking about the incentive fee waivers going forward? Is '25 likely to look a lot like how you did it in '24? Is there something that fundamentally flips in 2025 and commercial goes back to paying the entire incentive fee this year? How should we be thinking about that as we play with our models over the next few days?

David Gladstone

As you can imagine, everybody here would like to go back to the original, and so they're working hard to fill in where they need to fill in in order to get it back to a stronger payment to the employees here, but you know our position, we don't pay ourselves if we're not doing a good job for our shareholders. It's shareholders first at this company.
Rob, I wish I knew the projections well enough to say to you when we'll be back to that, but I don't have a date yet in mind, and I think we're going to be much stronger this year than we were last year, so hopefully that gives you a feeling of security about what we're doing here.

Rob Stevenson

Okay perfect thanks guys appreciate the time this morning.

Buzz Cooper

Thank you.

David Gladstone

Do you have any more questions? Yes.

Operator

Our next question is from John Masoka with B. Riley Securities. Please proceed.

John Masoka

Good morning.

David Gladstone

Morning

John Masoka

Let me. Starting off with the balance sheet, given the private placement and security issuance. You recently completed, I mean, is that kind of how we should expect. Funding to go forward I guess that pricing kind of the correct. Pricing at least in the current market in terms of interest rate.

Gary Gerson

John, I think we should expect that to be not, our primary mode of financing. Obviously, we have the line of credit, we have bank term loans, but yes, we intend to continue on with private placements, the market willing that the interest rate we got we thought was pretty strong for a first-time issuer, so it might hopefully be indicative and hopefully maybe even less in the future.

John Masoka

That's helpful. And then on the leasing front, can you just provide a little colour on your leasing activity in Q4? I know you get kind of numbers and metrics, but were those industrial assets, office properties, and kind of maybe how did rents trend versus what was in place before, renewal or releasing.

Buzz Cooper

They were both office and industrial. Majority was industrial. They also were plus ups as relates to industrial, but also in the office. The office deals were mostly on 5 years. We see that trend continuing as we look to renew current office buildings and then on the industrial side, various pockets around the country and again we did see a large one last year up in Pennsylvania. We are seeing a plus up in rents as it relates to those renewals.

John Masoka

Okay, and then, and I talked in the last earnings call, but maybe more in the context of 2025 just broad strokes, what's kind of the CapEx expectations just, balancing the relatively small amount of leases expiring in the current year versus maybe some more meaningful lease expirations in '26 and '27, just trying to think about how, spending there might go in the current year.

Buzz Cooper

Obviously CapEx that we have been spending on renewals is what I'll term positive cap X for us both with the retention of the tenancy, but it does bring an increase in rent so we don't have a lot of expense from a capital exposure point within our buildings.
The majority of it is leasing expenses and improvements to the buildings of that we have it budgeted. We are, it's very manageable. But again, a majority of it has been and we'll be here in the next nine months going to be for those dollars that we had to spend in leasing commissions in order to have the nice plus up that we had coming out of 2024.

John Masoka

Okay, that's helpful, and that's great. Thank you very much.

Buzz Cooper

Thank you.

David Gladstone

Okay, do we have any other questions Today?

Operator

Yes, we do. Our next question is from Dave Storms with Stonegate Capital. Please proceed.

Dave Storms

Good morning.

Buzz Cooper

Morning Dave.

Dave Storms

Just hoping to maybe get a sense of, around the timing, for some that you help sell, assets I think by there.

Buzz Cooper

As to timing, one is going to be in the, April 1, for a contract, we don't see a reason for that not to occur. And the other would be in the second quarter, I think early April most likely.

Dave Storms

So thank you and then just as it relates to the recycling program, is there any sense of what you're seeing in the spreading cap rates between maybe those [health] for sale assets and. What you might have in the acquisition pipeline.

Buzz Cooper

Dave, I'm not sure I understand that question unless you're asking the cap rate difference between sale to acquisition.

Dave Storms

Yes, essentially,

Buzz Cooper

Okay, so obviously on the acquisition side we are seeing cap rates and need to play in an area of 7.5 to 8 going in basis. Our sales are probably somewhat a little bit higher than that just because they're office. But not dramatically so. Because we don't have the pressure to other than within the industry to get off our books, we can be selective.

Dave Storms

Understood. That's very helpful. Thank you. And then just one more for me, are you seeing any early impacts from some of the rhetoric around tariffs, and some of them, implementation of those tariffs?

Buzz Cooper

Yeah, thank you for that. We've canvassed our tenancy. Do not see an immediate impact as relates to the potential threat of tariffs. Of course, we've got to see where they, who and where they hit, but our tendency currently does not has not expressed any such fear. We are looking for that it may help create more industrial opportunities with reshoring onshoring. So we are not currently seeing a great deal of stress as a result.

Dave Storms

That's all for me thank you.

Buzz Cooper

Thank you.

David Gladstone

Okay, do we have any other questions today?

Operator

Yes, our final question is from Craig Kucera with Lucid Capital Markets. Please proceed.

Craig Kucera

Yeah, hey, good morning guys. Just following up on some of the discussion on capital recycling. Can you give us a sense, broadly of the dollar amount of what you might be acquiring and selling, in your, as you're reviewing things?

Buzz Cooper

On the acquisition side, I'm hoping that it is a good bit more than what we had in 2024. We're looking forward to getting back to our what I'll call what I think is more normal production of $100 million a year, so I'm hopeful for that. I think we have a pretty good pipeline going in.
They're not all booked, obviously, and as it relates to dispositions that will allow us to be more discerning in our dispositions looking to get rid of some of the office assets that we feel might be problematic down the road as it relates to what people are looking for in the marketplace.
We've been, I think, pleasantly surprised with some of our dispositions on the creative activity of the buyers, either turning it into pickle balls, turning it into single family and apartments, and again just to remind, we don't have properties in CBDs. So as a result, there's some local buyers that find some of our our properties attracted to reposition.

Craig Kucera

Okay, great. You mentioned you had the North Carolina asset, I think it was an office asset expiring at the end of this quarter which you expected to sell. But for the remaining 2025 expirations, are those office or industrial?

Buzz Cooper

One is an industrial that is again under a lease with the purchase option which we believe will get exercised, and two others are office of which we do have and that's approximately 110,000 square feet. We do have have exchange paper as it relates to renewals.

Craig Kucera

Got it. And just one more for me, you did reclass a lease as a sales type this quarter. Is that going to still be a component of the base management fee calculation?

Gary Gerson

Yes, that will be it's an odd kind of addition to the accounting this ASC 842, this is the property, the industrial property that Buzz mentioned and when they entered into the lease in November with our expectation of a sale, we had to give them the guidance.
Reclass classified as a sales type lease. It's kind of an odd deal. That's one of the reasons we have that large gain on sale on our balance on our income statement and so but yes to answer your question, we are accounting for that as part of the base management fee. It's still a piece of real estate on our balance sheet, but even though it's not on our balance sheet as a piece of real estate.

Craig Kucera

Got it. That, that's what I figured. I just wanted to double check.
Thank you. That's all for me.

David Gladstone

Okay, any more questions today?

Operator

There are no further questions.

David Gladstone

Well, that was a little bit better than last quarter in terms of number of questions, but we'd love to have more questions. So next quarter, I hope you guys get all tuned up and ask us lots of questions because we enjoy answering them, and I know our audience likes to hear. All right, that's the end of this presentation, and so we'll say goodbye until next quarter.

Operator

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.