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Gladstone Commercial (GOOD) Up on High Rent Receipts, Occupancy

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Gladstone Commercial Corporation GOOD is witnessing high levels of rental collections, active leasing that is aiding solid occupancy, and ample liquidity to back its acquisitions and growth initiatives.

Specifically, the company has collected 100% of August cash base rents. As of Aug 31, 2021, it portfolio occupancy is in excess of 96%. Successful leasing activities have likely driven such encouraging portfolio occupancy. The healthy levels of rental receipts have enabled the company to maintain its dividend rate.

Gladstone is also focused on its growth measures, and on Aug 23, it announced the acquisition of an 81,760-square-foot industrial facility in Peru, IL, for $4.7 million. This marked the company’s second industrial acquisition in the greater Chicagoland area. The initial capitalization rate for the acquisition was 6.9%, with an average capitalization rate of 7.6%.

This 4.1-acre property, which was acquired in a sale/leaseback transaction, is fully leased to Pretium Packaging, LLC. The lease has 15 years remaining of absolute NNN lease term. The tenant uses the property for manufacturing and distribution of its rigid plastic packaging products.

So far in the year, Gladstone Commercial has acquired $45.855 million of industrial properties, aggregating 367,564 square feet across eight properties. The average GAAP capitalization rate for the acquisitions is 7.7%, with a weighted average lease term of 15.5 years.

Apart from these efforts, management noted that as of Aug 31, 2021, the company’s available liquidity was $30.9 million, consisting of revolving credit facility and cash on hand. Gladstone Commercial continues to raise equity capital, and since the beginning of the year through Aug 31, 2021, it has issued roughly 1.1-million shares of common stock for net proceeds of $22.6 million. Such an amount of liquidity supports Gladstone’s growth strategy.

Shares of this Zacks Rank #3 (Hold) company have gained 26.3% so far in the year, outperforming the industry’s rally of 22.9%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The Zacks Consensus Estimate for Public Storage’s PSA current-year FFO per share has moved up 4% to $12.34 in the past month. The company currently carries a Zacks Rank of 2 (Buy).

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Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.


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