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Sep 30, 2023
Gladstone Commercial Q3 2023 Earnings Report
Reported financial results, showing a decrease in Core FFO but an increase in net income compared to the previous quarter.
Key Takeaways
Gladstone Commercial Corporation reported a net income of $1.792 million for the third quarter of 2023, a significant improvement compared to the net loss of $4.588 million in the previous quarter. Core FFO, however, decreased by 17.3% to $13.7 million, or $0.34 per share, primarily due to accelerated rent from a lease termination in the previous quarter and higher interest expenses.
Collected 100% of cash rents for July, August, and September.
Acquired two fully-occupied properties for $11.9 million at a weighted average cap rate of 9.54%.
Sold three non-core properties for $19.0 million as part of the capital recycling program.
Renewed 397,524 square feet of leases with remaining terms ranging from 13.9 to 18.7 years.
Forward Guidance
Gladstone Commercial anticipates challenges due to the pandemic's effects and inflation, but expresses confidence in tenant credit underwriting and the ability to acquire accretive assets. The company plans to continue its capital recycling program, focusing on industrial investment opportunities and target growth markets.
Positive Outlook
- Expect same store rents, which have increased by 2% annually in recent years, should continue to rise as we grow.
- Collected 100% of the third quarter's cash rents and 100% of October cash rents.
- Believe our same store rents, which have increased by 2% annually in recent years, should continue to rise as we grow.
- Believe our same store rents, which have increased by 2% annually in recent years, should continue to rise as we grow.
- In 2022, we amended our credit facility to add a new term loan component, and increased our revolver, which we believe will be a great source of financial flexibility in these uncertain markets.
Challenges Ahead
- Expect to face challenges due to the lingering effects of the pandemic and significant inflation with a corresponding increase in interest rates.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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