Gladstone Commercial Corporation (GOOD) Bundle
A Brief History of H3
Gladstone Commercial Corporation, a publicly traded real estate investment trust (REIT), was established on February 14, 2003. The company focuses on acquiring, owning, and managing primarily office and industrial properties across the United States. As of November 4, 2024, Gladstone owned 135 properties totaling approximately 16.8 million square feet of rentable space, located in 27 states, with an impressive occupancy rate of 98.5%.
Over the years, the company has strategically expanded its portfolio through acquisitions and property management, targeting secondary growth markets with favorable economic conditions. The average remaining lease term of the portfolio is 6.9 years, reflecting the company's commitment to long-term investments.
Financial Performance Overview
For the three months ended September 30, 2024, Gladstone reported a net income of $11.7 million, compared to $1.8 million in the same period of 2023. The net income available to common stockholders for the same period was $8.5 million, a significant recovery from a loss of $1.4 million a year prior. The basic earnings per share for the third quarter of 2024 was $0.20, compared to a loss of $0.04 in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $11.7 million | $1.8 million |
| Net Income Available to Common Stockholders | $8.5 million | $(1.4) million |
| Basic Earnings Per Share | $0.20 | $(0.04) |
Recent Acquisitions
In 2024, Gladstone made notable acquisitions to enhance its portfolio. Among these, the company acquired a five-property portfolio in Warfordsburg, Pennsylvania, for $12.0 million, with a remaining lease term of 25.1 years. Additionally, a property in Midland, Texas, was purchased for $10.2 million, featuring a 15-year lease term.
| Acquisition Details | Location | Purchase Price | Lease Term |
|---|---|---|---|
| Portfolio Acquisition | Warfordsburg, PA | $12.0 million | 25.1 years |
| Single Property | Midland, TX | $10.2 million | 15.0 years |
Revenue and Operating Performance
For the nine months ended September 30, 2024, total operating revenues were recorded at $112.0 million, a slight increase from $111.7 million in 2023. The company has seen a steady increase in lease revenues, particularly from same-store properties, which amounted to $92.3 million in 2024, reflecting a 1.4% growth year-over-year.
| Operating Revenues | 9M 2024 | 9M 2023 |
|---|---|---|
| Total Operating Revenues | $112.0 million | $111.7 million |
| Lease Revenues (Same Store) | $92.3 million | $91.0 million |
Liquidity and Capital Resources
As of September 30, 2024, Gladstone's available liquidity was reported at $80.7 million, which includes approximately $10.5 million in cash and cash equivalents and $70.2 million in available borrowing capacity under its Credit Facility. The company was in compliance with all covenants under this facility.
| Liquidity Metrics | Amount |
|---|---|
| Available Liquidity | $80.7 million |
| Cash and Cash Equivalents | $10.5 million |
| Available Borrowing Capacity | $70.2 million |
In summary, Gladstone Commercial Corporation has demonstrated resilience and growth in its financial performance through strategic acquisitions and effective management of its portfolio. The company continues to focus on expanding its presence in key markets while maintaining a strong operational foundation.
A Who Owns Gladstone Commercial Corporation (GOOD)
Ownership Structure
As of September 30, 2024, Gladstone Commercial Corporation (GOOD) owned approximately 99.9% of the outstanding operating partnership units (OP Units) in its subsidiary, Gladstone Commercial Limited Partnership. There were 39,474 OP Units held by Non-controlling OP Unitholders.
Major Shareholders
The major shareholders of Gladstone Commercial Corporation include institutional investors and individual stakeholders. The ownership is diversified across various sectors. The following table summarizes the top institutional shareholders as of November 4, 2024:
| Institution | Ownership Percentage | Shares Owned |
|---|---|---|
| BlackRock, Inc. | 8.5% | 3,740,000 |
| Vanguard Group, Inc. | 7.9% | 3,485,000 |
| State Street Corporation | 5.6% | 2,500,000 |
| Invesco Ltd. | 4.3% | 1,900,000 |
| Northern Trust Corporation | 3.2% | 1,420,000 |
Distribution of Equity
As of September 30, 2024, the total equity of Gladstone Commercial Corporation was $169.046 million. The components of equity included:
| Equity Type | Amount (in thousands) |
|---|---|
| Common Stock | $43 |
| Senior Common Stock | $1 |
| Series F Preferred Stock | $1 |
| Additional Paid-In Capital | $780,205 |
Recent Equity Activity
During the nine months ended September 30, 2024, Gladstone Commercial Corporation raised net proceeds of $49.5 million from common equity under the 2024 Common Stock Sales Agreement. Additionally, $0.7 million was raised from sales of Series F Preferred Stock.
Recent Changes in Ownership
The corporation redeemed 271,169 OP Units for common stock during the nine months ended September 30, 2024. As of September 30, 2024, there were 39,474 outstanding OP Units held by Non-controlling OP Unitholders.
Liquidity Position
As of September 30, 2024, Gladstone Commercial Corporation reported available liquidity of $80.7 million, comprising approximately $10.5 million in cash and cash equivalents and $70.2 million in available borrowing capacity under its Credit Facility.
Conclusion of Shareholder Distribution
Gladstone Commercial Corporation declared distributions per share for the three and nine months ended September 30, 2024, as follows:
| Distribution Type | Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 |
|---|---|---|
| Common Stock | $0.30 | $0.90 |
| Senior Common Stock | $0.2625 | $0.7875 |
| Series E Preferred Stock | $0.414063 | $1.242189 |
| Series F Preferred Stock | $0.375 | $1.125 |
| Series G Preferred Stock | $0.375 | $1.125 |
Gladstone Commercial Corporation (GOOD) Mission Statement
Overview of Mission Statement
Gladstone Commercial Corporation aims to enhance shareholder value through the acquisition and management of commercial real estate, focusing on industrial and office properties. The company is committed to providing attractive risk-adjusted returns to its investors by employing a disciplined investment strategy and maintaining a diversified portfolio.
Core Values
- Integrity: The company emphasizes ethical practices in all its dealings.
- Accountability: Gladstone takes responsibility for its actions and decisions.
- Excellence: The pursuit of excellence in property management and service delivery is paramount.
- Innovation: The company seeks innovative solutions to enhance operational efficiency and tenant satisfaction.
Financial Performance Metrics
As of September 30, 2024, the financial performance metrics of Gladstone Commercial Corporation reflect its operational effectiveness in achieving its mission:
| Metric | Value |
|---|---|
| Net Income | $16.84 million |
| Total Assets | $1.096 billion |
| Mortgage Notes Payable | $271.62 million |
| Cash Flow from Operating Activities | $34.17 million |
| Lease Revenue | $112.01 million |
| Occupancy Rate | 98.5% |
| Weighted Average Remaining Lease Term | 6.9 years |
Investment Strategy
Gladstone Commercial Corporation focuses on acquiring properties that have long-term leases with strong tenants, which helps mitigate risks associated with vacancy and income fluctuations. The company actively pursues opportunities in secondary growth markets that exhibit favorable economic conditions.
Market Position and Portfolio
As of November 4, 2024, Gladstone Commercial Corporation owned 135 properties totaling 16.8 million square feet of rentable space across 27 states. The company's strategy is to maintain a diversified portfolio to reduce exposure to localized economic downturns.
Recent Acquisitions
During the nine months ended September 30, 2024, Gladstone acquired six industrial properties with a total purchase price of $22.12 million. The acquisitions are summarized in the following table:
| Property Location | Square Footage | Purchase Price | Lease Term Remaining |
|---|---|---|---|
| Warfordsburg, PA | 142,125 sq ft | $12.0 million | 25.1 years |
| Midland, TX | 50,102 sq ft | $10.2 million | 15.0 years |
Financial Health Indicators
The company has maintained a healthy liquidity position, with available liquidity of $80.7 million as of September 30, 2024. This liquidity consists of $10.5 million in cash and cash equivalents and $70.2 million in available borrowing capacity under its credit facility.
Distributions
Gladstone Commercial Corporation has a consistent track record of paying distributions to its shareholders. For the three months ended September 30, 2024, the distribution per share was $0.10, consistent with the previous quarters. The total distributions for the nine months ended September 30, 2024, amounted to $0.90 per share.
Future Outlook
Looking ahead, Gladstone Commercial Corporation intends to continue its focus on acquiring income-producing properties while managing its existing portfolio to sustain and enhance shareholder value. The company remains vigilant in monitoring market conditions to identify new opportunities for growth.
How Gladstone Commercial Corporation (GOOD) Works
Overview of Operations
Gladstone Commercial Corporation (GOOD) is a real estate investment trust (REIT) focused on acquiring, owning, and managing primarily office and industrial properties across the United States. As of September 30, 2024, the company owned 135 properties totaling 16.8 million square feet of rentable space, with an occupancy rate of 98.5%.
Financial Performance
For the three months ended September 30, 2024, Gladstone reported operating revenues of $39.2 million, an increase of 7.6% from $36.5 million in the same period in 2023. The net income available to common stockholders was $8.5 million, compared to a loss of $1.4 million in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Operating Revenues | $39.2 million | $36.5 million | 7.6% |
| Net Income | $8.5 million | $(1.4) million | 701.1% |
| Lease Revenue | $39.2 million | $36.5 million | 7.6% |
| Total Operating Expenses | $28.5 million | $29.6 million | (3.5%) |
Liquidity and Capital Resources
As of September 30, 2024, Gladstone had available liquidity of $80.7 million, which included approximately $10.5 million in cash and cash equivalents and $70.2 million in available borrowing capacity under its Credit Facility. The company raised net proceeds of $49.5 million from common equity sales during the nine months ended September 30, 2024.
Debt Structure
Gladstone's mortgage notes payable totaled $273.4 million, secured by 45 properties, with a weighted average interest rate of 4.23% as of September 30, 2024. The company has 39 mortgage notes with a remaining weighted average maturity of 3.5 years.
| Debt Metrics | Amount | Weighted Average Interest Rate | Remaining Maturity |
|---|---|---|---|
| Mortgage Notes Payable | $273.4 million | 4.23% | 3.5 years |
| Borrowings Under Credit Facility | $53.3 million | 6.27% | N/A |
Investment Activities
During the nine months ended September 30, 2024, the company generated $8.6 million from investing activities, primarily from the sale of six properties. The total cash used for property acquisitions and improvements was offset by gains on sales.
Distributions
For the nine months ended September 30, 2024, distributions paid to shareholders amounted to $46.7 million. The company paid $0.30 per share for common stock during the third quarter of 2024, consistent with the same period in 2023.
| Distribution Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Common Stock Distribution | $0.30 | $0.30 |
| Series E Preferred Stock | $0.414063 | $0.414063 |
| Series F Preferred Stock | $0.375 | $0.375 |
Market Environment
The commercial real estate sector faced challenges in 2024 due to fluctuating interest rates and inflation concerns. The Federal Reserve's decision to lower interest rates in September 2024 aimed to stimulate economic growth, which could positively impact future acquisitions.
Conclusion on Future Outlook
Gladstone plans to continue its strategy of acquiring industrial and office properties while maintaining a conservative approach to its liquidity and debt levels. The company’s focus on secondary growth markets positions it well for future growth amid ongoing economic uncertainties.
How Gladstone Commercial Corporation (GOOD) Makes Money
Revenue Generation from Lease Income
Gladstone Commercial Corporation primarily generates revenue through lease income from its real estate portfolio. For the three months ended September 30, 2024, lease revenue amounted to $39.235 million, representing a 7.6% increase from $36.464 million in the same period of 2023. For the nine months ended September 30, 2024, total lease revenue was $112.013 million, compared to $111.675 million for the same period in the previous year, reflecting a modest 0.3% increase.
| Period | Lease Revenue ($ million) | Change (%) |
|---|---|---|
| Q3 2024 | 39.235 | 7.6 |
| Q3 2023 | 36.464 | - |
| 9M 2024 | 112.013 | 0.3 |
| 9M 2023 | 111.675 | - |
Operating Expenses and Cost Management
Gladstone Commercial Corporation has focused on maintaining operational efficiency. For the three months ended September 30, 2024, total operating expenses were $28.546 million, down 3.5% from $29.587 million in Q3 2023. The reduction in expenses was attributed to decreases in property operating expenses and general administrative costs.
| Expense Type | Q3 2024 ($ million) | Q3 2023 ($ million) | Change (%) |
|---|---|---|---|
| Total Operating Expenses | 28.546 | 29.587 | -3.5 |
| Property Operating Expenses | 6.681 | 6.821 | -2.1 |
| General and Administrative | 0.970 | 1.306 | -25.7 |
Gains from Real Estate Transactions
In addition to lease income, Gladstone Commercial Corporation benefits from gains on the sale of real estate. For the nine months ended September 30, 2024, the company recorded a gain on the sale of real estate totaling $10.554 million, significantly up from $4.245 million in the prior year, demonstrating a 148.6% increase.
| Period | Gain on Sale of Real Estate ($ million) | Change (%) |
|---|---|---|
| 9M 2024 | 10.554 | 148.6 |
| 9M 2023 | 4.245 | - |
Debt Management and Interest Expenses
As of September 30, 2024, Gladstone had mortgage notes payable totaling $271.621 million with a weighted average interest rate of 4.23%. Interest expenses for the nine months ended September 30, 2024, were $28.259 million, slightly up from $27.845 million in the previous year.
| Debt Metrics | Amount ($ million) | Interest Rate (%) |
|---|---|---|
| Mortgage Notes Payable | 271.621 | 4.23 |
| Interest Expense (9M 2024) | 28.259 | - |
| Interest Expense (9M 2023) | 27.845 | - |
Cash Flow from Operating Activities
For the nine months ended September 30, 2024, net cash provided by operating activities was $34.166 million, a decrease from $48.489 million in the same period of 2023. This cash is primarily generated from lease revenues and is used to cover operational costs and debt obligations.
| Cash Flow Metrics | Cash Flow ($ million) |
|---|---|
| Net Cash from Operating Activities (9M 2024) | 34.166 |
| Net Cash from Operating Activities (9M 2023) | 48.489 |
Distributions to Shareholders
Distributions paid to shareholders for the three and nine months ended September 30, 2024, were consistent at $0.30 per share for common stock, amounting to $16.168 million for the nine months, compared to $15.182 million in the previous year.
| Period | Distribution per Share ($) | Total Distribution ($ million) |
|---|---|---|
| Q3 2024 | 0.30 | 16.168 |
| 9M 2024 | 0.90 | 16.168 |
| 9M 2023 | 0.90 | 15.182 |
Overall Financial Performance
As of September 30, 2024, Gladstone Commercial Corporation reported a net income of $16.843 million, a substantial increase from $370,000 in the same period of 2023. This improvement can be attributed to higher lease revenues, gains from real estate sales, and effective cost management.
| Performance Metrics | Net Income ($ million) | Change (%) |
|---|---|---|
| Net Income (9M 2024) | 16.843 | 4,452.2 |
| Net Income (9M 2023) | 0.370 | - |
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Updated on 16 Nov 2024
Resources:
- Gladstone Commercial Corporation (GOOD) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Gladstone Commercial Corporation (GOOD)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Gladstone Commercial Corporation (GOOD)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.