Gladstone Commercial Corporation Provides a Business Update
April 22 2020 - 4:30PM
Gladstone Commercial Corporation (Nasdaq: GOOD) (“Gladstone
Commercial”) is providing the following business update regarding
portfolio performance and economic stability during this time of
significant market volatility related to the global COVID-19
pandemic.
Our team has transitioned seamlessly to the
work-at-home arrangement and is focusing on current portfolio
performance and economic stability, with a continued emphasis on
maintaining appropriate liquidity, inclusive of capital markets
initiatives. In addition, we continue to have active market
engagement with a primary focus toward industrial investment
opportunities.
Our primary focus is on managing the
existing portfolio to maintain cash flow to maximize profitability
and shareholder value, with the following highlights:
- Portfolio occupancy remains at approximately 97% as of March
31, 2020.
- All cash base rent required to be paid in March has been
collected.
- Approximately 98% of April cash base rent has been paid and
collected.
In April 2020, Gladstone Commercial granted
deferrals to three (3) tenants representing approximately 2% of
total portfolio rents. The agreements with these tenants include
current partial payment in exchange for rent deferrals of varying
terms with deferred amounts to be paid by the respective tenant
back to Gladstone Commercial, for the period starting in July 2020
and ending through March 2021.
Gladstone Commercial has received additional
rent relief requests from certain tenants and reasonably expects to
receive more of such requests in the near term. Gladstone
Commercial’s acquisitions and asset management teams intend to
predominantly seek extended lease term, increased rent, near term
rent deferral repayment, and other favorable lease modifications as
consideration for granting relief for certain tenants that have
been materially and adversely impacted by the ongoing COVID-19
pandemic, as assessed by us. However, Gladstone Commercial is
unable to quantify the outcomes of the negotiation of relief
packages, the success of any tenant’s financial prospects or the
amount of relief requests that we will ultimately receive or
grant.
Our risk will likely be mitigated by our
portfolio composition and focus on industrial distribution and
warehouse investments.
- We acquired $201 million in new investments since January 1,
2019, inclusive of $72 million acquired in the first quarter of
2020. All new investments over this period are distribution or
manufacturing investments in industries that we believe are likely
to be insulated from the impact of the COVID-19 pandemic; and
- Over the past four years, we have used our credit-focused
investment strategy to cultivate a high quality, diversified
portfolio with a focus on strong cash flowing businesses. At the
end of 2019, 63% of our rents were derived from investment grade or
investment grade equivalent tenants and 54% of our tenants were
publicly owned companies. Over 84% of our annual rental revenue is
derived from tenants that each represent on average less than 1% of
our revenue. The remaining 16% of our annual rental revenue is
derived from investment grade or investment grade equivalent
tenants, or subsidiaries of investment grade companies. As of
December 31, 2019, our tenants in the hospitality, airlines and oil
& gas industries comprise approximately 2.4% of our annual
rental revenue.
Our recent debt and equity capital markets activity has
our business well positioned for the current market
uncertainty.
- As of April 22, our currently available liquidity is in excess
of $25 million via our revolving credit facility availability and
cash on hand;
- In the third quarter of 2019 we executed a recast of our credit
facility that reduced both our term loan and our revolving credit
facility borrowing costs by 10 bps and added two years of duration
to extend the related maturities to 2024 and 2023,
respectively;
- During the fourth quarter of 2019 and the first quarter of
2020, we issued 2.4 million common shares at an average net share
price of $21.71 per share for total proceeds to us totaling $51.9
million under our At-the Market offering program; and
- We are strategically addressing $20 million of 2020 maturing
mortgages through a combination of mortgage refinances, mortgage
extensions and utilization of the credit facility. These mortgages
are predominantly secured by performing assets.
We continue to monitor our portfolio and intend to maintain a
conservative liquidity position for the foreseeable future.
About Gladstone Commercial (Nasdaq:
GOOD)
Gladstone Commercial is a real estate investment
trust focused on acquiring, owning and operating net leased
industrial and office properties across the United States. As
of December 31, 2019, Gladstone Commercial’s real estate
portfolio consisted of 118 properties located in 28 states,
totaling approximately 14.2 million square feet. For additional
information please visit www.gladstonecommercial.com
For Broker Submittals:
South Central: |
Midwest/Northeast: |
Buzz Cooper |
Matt Tucker |
Senior Managing Director |
Senior Managing Director |
(703) 287-5815 |
(703) 287-5830 |
Buzz.Cooper@gladstonecompanies.com |
Matt.Tucker@gladstonecompanies.com |
|
|
Southeast /
West: |
|
Brandon
Flickinger |
|
Managing Director |
|
(703) 287-5819 |
|
Brandon.Flickinger@gladstonecompanies.com |
|
|
|
Investor or Media Inquiries:
Bob Cutlip |
|
President – Gladstone
Commercial Corporation |
(703) 287-5878 |
|
Bob.Cutlip@gladstonecompanies.com |
|
All statements contained in this press release, other than
historical facts, may constitute “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Words such as “anticipates,” “expects,” “intends,”
“plans,” “believes,” “seeks,” “estimates” and variations of these
words and similar expressions are intended to identify
forward-looking statements. Readers should not rely upon
forward-looking statements because the matters they describe are
subject to known and unknown risks and uncertainties that could
cause the Gladstone Commercial’s business, financial condition,
liquidity, results of operations, funds from operations or
prospects to differ materially from those expressed in or implied
by such statements. Such risks and uncertainties are disclosed
under the caption “Risk Factors” of the company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2019, as filed
with the SEC on February 12, 2020 and certain other filings we make
with the SEC. Gladstone Commercial cautions readers not to
place undue reliance on any such forward-looking statements which
speak only as of the date made. The company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
For Investor Relations inquiries related to any of the monthly
dividend paying Gladstone funds, please visit
www.gladstone.com.
SOURCE: Gladstone Commercial Corporation
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