Did Gladstone Commercial beat or miss consensus estimates last quarter?

What were the key takeaways from Gladstone Commercial’s earnings call?

What does Gladstone Commercial do and what are its main business segments?

What is the market's earnings forecast for Gladstone Commercial next quarter?

What is Gladstone Commercial's latest dividend and current dividend yield?

What guidance did Gladstone Commercial's management provide for the next earnings period?

What were the key takeaways from Gladstone Commercial's earnings call?

What is Gladstone Commercial's gross profit margin?

- **Industrial Expansion**: 69% of rents from industrial (vs 63% start 2025), with $206M year-to-date acquisitions.
- **Portfolio Strength**: 99.1% occupancy, 7.5-year WALT, 3.1% same-store lease growth.
- **Financial Resilience**: $0.35 FFO despite 8% YoY decline, $600M credit facility extended.
- **CapEx Focus**: $10M+ Q3 on renewals, targeting 8.5%+ cap rates for 2026 deals.
- **Dividend Stability**: Maintained at $0.30 with accretive investments and equity issuance.
- **Risk Management**: 24% floating debt, 37% hedged, no 2025 maturities.


**【CEO Summary Section】**
- Acquired a 6-facility industrial portfolio for $54.5 million, bringing year-to-date acquisitions to $206 million.
- Industrial concentration rose to 69% of straight-line rents (from 63% at year-start).
- Portfolio occupancy at 99.1%, WALT 7.5 years, and same-store lease revenue up 3.1% YoY.
- Extended credit facility to $600 million, reducing 2025 maturities to $28 million.
- Dividend maintained at $0.30 per quarter.

**【Portfolio Performance】**
- Sold 1 non-core industrial property, leased 734,000 sq ft with 0.7-11.4 year terms, and achieved $1.1 million in straight-line rent growth.
- 100% rent collection and no material tenant issues.
- Balance sheet improvements include $600 million credit facility (39% fixed, 37% hedged floating) and $61 million ATM equity raise.
- Focus on industrial expansion and strategic capital recycling.

**【CFO Financial Commentary】**
- Q3 FFO/core FFO: $0.35 (down 8% YoY vs $0.38).
- Operating revenues $40.8 million (+4% YoY), expenses $26 million (-9% YoY) due to lower impairment and higher recoveries.
- Debt: 24% floating (SOFR 4.24%), 37% hedged floating, 39% fixed.
- Liquidity: $6 million cash, $63 million revolver availability.

**【Q&A Highlights】**
- **Industrial Growth**: Targeting >70% industrial concentration, with 2 potential Q4 acquisitions.
- **Expense Trends**: 20%+ YoY operating expense growth driven by inflation, insurance, and tenant pass-throughs.
- **CapEx**: $10+ million Q3 for renewals, supporting 3.1% same-store growth; expect lower 2026 CapEx.
- **Dividend Sustainability**: Accretive investments and 8.5%+ cap rate acquisitions support dividend.
- **Leverage Management**: Issuing equity to deleverage, with no 2025 debt maturities.
- **Market Outlook**: Cap rates compressing, targeting 8.5%+ on accretive industrial deals.
- **Government Shutdown**: No tenant impact reported.


Gladstone Commercial Corporation (GOOD) Q3 2025 Earnings Call Transcript

- **Industrial Growth**: 6.4% YoY revenue growth driven by higher rental rates and expense recoveries.
- **Acquisition Momentum**: $79M in Q2 industrial buys, 2nd consecutive quarter of record activity.
- **Financial Resilience**: 100% rent collection, 98.7% occupancy, and 7.1-year WALT.
- **Debt Management**: 42% fixed-rate debt, 39% hedged floating-rate; effective SOFR at 4.45%.
- **Strategic Focus**: Targeting 8.5%+ cap rates on industrial assets, no office market exposure.

**【Management Opening Remarks】**
- CEO David Gladstone highlighted Q2 2025 performance, including $79 million in industrial acquisitions and the sale of one office property for a $377,000 gain.
- Emphasized 100% rent collection and disciplined underwriting focused on high-quality industrial assets.

**【CEO Commentary】**
- **Market Overview**: Industrial sector shows resilience with net absorption of 29.6M sq ft Q2 2025, vacancy rate at 7.1%, and new construction at 10-year low.
- **Portfolio Strength**: 98.7% occupancy, WALT extended to 7.1 years, and 67% industrial rental concentration.
- **Acquisition Strategy**: Completed two industrial facilities ($78.95M) and maintained selective disposal of non-core assets.
- **Lease Renewals**: Secured 2.5% rent increase on a key lease and anticipate 6/10 expiring leases renewing in 2025.

**【CFO Financial Commentary】**
- **FFO Performance**: Q2 FFO of $0.33 per share (vs. $0.36 in 2024), 6-month FFO of $0.67 (vs. $0.69 in 2024).
- **Revenue Growth**: Operating revenues up 6.4% YoY to $39.5M, driven by higher rental rates and expense recoveries.
- **Debt Management**: 42% fixed-rate debt, 39% hedged floating-rate, 19% floating-rate; effective SOFR at 4.45%.
- **Liquidity**: $94.4M revolver borrowings, $6M cash, and $25M credit availability.

**【Q&A Highlights】**
- **Acquisition Pipeline**: 6 LOIs out of 20 active deals, targeting $50M+ transactions post-summer slowdown.
- **Cap Rates**: Average 8.5%+ for industrial acquisitions, no plans to enter office market.
- **Tenant Credit**: 100% rent collection; no material impact from macroeconomic uncertainty.
- **Debt Strategy**: No plans to increase leverage; may refinance revolver debt via ATM sales or term loans.
- **Incentive Fees**: Waived quarterly based on alignment with shareholder returns and retention needs.

Gladstone Commercial Corporation (GOOD) Q2 2025 Earnings Call Transcript

- **Acquisition Momentum**: $73M in Q1 industrial buys, $70M+ pipeline for Q2 with 100%+ IRR target.
- **Portfolio Strength**: 98.4% occupancy, 100% rent collection, 65% industrial concentration.
- **Financial Resilience**: Flat FFO despite 6.6% rent growth, disciplined cost management.
- **Strategic Focus**: Re-shoring/on-shoring tailwinds driving pursuit of mission-critical industrial assets.
- **Liquidity**: $99M available via revolver and cash; no material debt maturities until 2027.

**【CEO Opening Remarks】**
- Acquired two industrial facilities totaling $73 million, maintaining focus on high-quality, mission-critical assets.
- Sold one office property for a $377,000 profit, continuing portfolio optimization.
- Team remains active in pursuing accretive acquisitions, with disciplined underwriting to avoid overpriced or risky deals.

**【Buzz Cooper: Market Overview & Portfolio Performance】**
- Industrial real estate sector resilient despite macroeconomic uncertainty; Q1 2025 net absorption matched 2024 levels at 23.1 million sq ft.
- Portfolio occupancy maintained at 98.4% as of Q1, with 100% cash rent collection.
- Increased industrial concentration to 65% of annualized straight-line rent, targeting 70%+ in the near term.
- Deployed $73 million in capital for new industrial acquisitions, with $99 million in liquidity for future deals.

**【Gary Gerson: Financial Highlights】**
- FFO and Core FFO per share: $0.34 (flat vs. Q1 2024).
- Same-store rents up 6.6% YoY, driven by higher recovery revenue and rental rates.
- Operating expenses rose 2.6% YoY due to inflation and higher incentive fees.
- Debt profile: 45% fixed-rate, 47% hedged floating-rate, 8% unhedged floating-rate; effective SOFR 4.41%.
- $51.3 million drawn on revolver; $27.7 million raised via ATM program.

**【Q&A Key Takeaways】**
- **Acquisition Pipeline**: $70 million under contract for Q2, $140 million in pipeline; 100%+ IRR target on new deals.
- **Lease Renewals**: 2026 expirations (~8-9% of portfolio) being actively renegotiated; 2027 expirations also in focus.
- **Funding Strategy**: Use of cash, revolver, and private placements; no near-term debt maturities beyond $3.1 million.
- **Market Trends**: Light manufacturing outperforming distribution; re-shoring/on-shoring driving demand for industrial space.
- **Austin Office Property**: Positive cash flow, RFPs out; potential for tenant addition as office demand recovers.

Gladstone Commercial (GOOD)-8 May 25-2025 Q1 Earnings call transcript

- **Industrial Growth Momentum**: 63% industrial concentration (target 70%+ by 2025) with $26.8M in Q4 acquisitions.
- **Financial Discipline**: Reduced leverage to 44.1%, $75M private placement strengthens balance sheet.
- **2025 Outlook**: $100M+ industrial acquisitions, 4-5 office asset sales, and 7.5-8% cap rate acquisitions.
- **Liquidity Position**: $98M available via credit line to capitalize on industrial opportunities.
- **Tenant Stability**: 100% cash rent collection, 98.7% occupancy, and no tenant credit deterioration.


**【CEO Opening Remarks】**
- Acquired an industrial facility in St. Clair, Missouri for $5.2 million in Q4 2024.
- Sold one non-core property and renewed leases at two properties, maintaining 100% cash rent collection.
- Highlighted the commercial team's ability to grow and manage the portfolio during challenging times.

**【President (Arthur Cooper) Business Overview】**
- **Portfolio Performance**: 63% industrial concentration (up from 60%), 98.7% occupancy, $3.8 million net increase in GAAP rent from lease renewals.
- **Acquisitions & Dispositions**: Acquired 3.16 million sq ft of industrial space for $26.8 million; sold 7 non-core properties ($5.9 million in office, $2.1 million in medical office).
- **2025 Outlook**: Target 70%+ industrial concentration; $98 million available via credit line for accretive acquisitions.
- **Disciplined Underwriting**: Reviewed hundreds of opportunities, prioritizing credit quality and pricing.

**【CFO (Gary Gerson) Financial Highlights】**
- **FFO Performance**: Q4 2024 FFO of $0.35/share vs $0.36/share in Q4 2023; full-year FFO of $1.41/share vs $1.46/share in 2023.
- **Debt Management**: Reduced leverage to 44.1% (from 46.1% in 2023); $75 million private placement of senior unsecured notes.
- **Interest Rate Strategy**: 49% fixed-rate debt, 50% hedged floating-rate debt; average effective rate of 4.49%.
- **Liquidity**: $8 million cash, $90 million available on credit facility.

**【Q&A Key Takeaways】**
1. **Leverage & Capital Structure**
   - Target: Reduce leverage to low 40s; increase unsecured debt proportion.
   - 2024 progress: Secured debt reduced by $25.3 million, total debt down $44.5 million.

2. **Industrial Expansion**
   - 2025 pipeline: $100 million+ in acquisitions (vs $26.8 million in 2024).
   - Focus: Core industrial assets with strong credit tenants.

3. **Office Portfolio Strategy**
   - Active disposition: 4-5 office assets in 2025; 7% vacancy in remaining portfolio.
   - Opportunistic sales: 2 assets under contract for Q2 2025 closure.

4. **Incentive Fee Management**
   - 2025 outlook: Fee waivers to continue based on performance; aim to restore higher payments as results improve.

5. **Capital Recycling**
   - Acquisition pipeline: $100 million+ in 2025 (vs $26.8 million in 2024).
   - Disposition strategy: Sell non-core office assets to fund industrial growth.


Gladstone Commercial (GOOD)-19 Feb 25-2024 Q4 Earnings call transcript

Gladstone Commercial (GOOD)-5 Nov 24-2024 Q3 Earnings call transcript

Gladstone Commercial (GOOD)-7 Aug 24-2024 Q2 Earnings call transcript

Gladstone Commercial (GOOD)-7 May 24-2024 Q1 Earnings call transcript

Gladstone Commercial Corporation (GOOD) Q4 2023 Earnings Call Transcript

- **Strategic Shift to Industrial**: Industrial assets now 59% of portfolio, up from 32% in 2019. Recent acquisitions at 9.2%-10.8% cap rates vs. 8.23% office disposition yields.
- **Revenue Growth**: Same-store rent +5.4% YoY, driven by lease renewals and full-building lease at Fort Lauderdale (+38% rent).
- **Liquidity Management**: $43.6M available on revolver; no 2023 debt maturities, $19.6M due in 2024.
- **Challenges**: Higher interest costs (+$6.8M YoY) offset by reduced impairment charges. FFO per share down 23% YoY to $0.33.

**【Management Opening Remarks】**
- CEO David Gladstone highlighted the company's strategic pivot from office to industrial assets, emphasizing resilience despite high interest rates. The team executed 3 office asset sales and 2 industrial acquisitions, maintaining strong cash collection.

**【CEO Commentary - Portfolio Strategy】**
- **Industrial Focus**: Industrial assets now account for 59% of annual straight-line rent, up from 32% in 2019. Recent acquisitions include a Texas manufacturing facility ($9.1M, 10.1% cap rate) and a Pennsylvania distribution center ($7.8M, 9.2% cap rate). Dispositions of 3 office assets yielded $19M, with a 130bp yield improvement.
- **Lease Performance**: Same-store rent grew 5.4% YoY, driven by lease renewals (e.g., 38% rent increase at Fort Lauderdale office). Post-quarter, acquired 2 more industrial properties in Indianapolis and Allentown.
- **Pipeline**: $366M in acquisition opportunities, with $45M in LOI stage. Expecting normalized seller expectations in 2024.

**【CFO Financial Commentary】**
- **FFO Results**: Q3 FFO per share: $0.33 (vs. $0.43 in 2022). Core FFO impacted by one-time expenses ($1.1M) and higher interest costs. Year-to-date FFO: $1.10 vs. $1.21 prior year.
- **Revenue & Expenses**: Operating revenues $36.5M (down 8.8% YoY) due to asset dispositions. Operating expenses $29.6M (down 15.6%) from reduced impairment charges and depreciation.
- **Debt Profile**: 41.6% fixed-rate debt, 49% hedged floating-rate. Effective SOFR rate 5.31%. $70.95M revolver balance, $43.6M availability.
- **Liquidity**: No 2023 maturities; $19.6M due in 2024. No ATM activity; $900K from Series F preferred stock.

**【Q&A Highlights】**
- **Disposition Buyers**: Majority of office assets sold to developers for multifamily conversion, not 1031 users.
- **Lease Strategy**: Pursue long-term (15-20yr) sale-leasebacks for industrial, 5yr renewals for office. Tenant improvement costs balanced against accretion.
- **Geographic Focus**: Midwest/Southeast growth markets; avoiding West due to high costs.
- **Interest Rate Impact**: Higher interest costs ($6.8M YoY) offset by reduced impairment charges. Hedging strategy to be reviewed as rates stabilize.
- **Incentive Fee**: Waived for 2023; Board to decide 2024 policy.

GOOD

GOOD fundamentals

Earnings Call

You can ask Aime