Exhibit 99.1 Gladstone Commercial Corporation Announces the Financial Results for the First Quarter Ended March 31, 2004 MCLEAN, Va., May 10 /PRNewswire-FirstCall/ -- Gladstone Commercial Corp. (Nasdaq: GOOD) (the "Company") announces financial results for the first quarter ended March 31, 2004. Net loss for the period was $193,305 or $0.03 per basic and diluted weighted average common share compared to March 31, 2003 at $10,549 or $0.20 per basic and diluted weighted average common share. Our initial public offering took place in August of 2003 and therefore, the financial statements at March 31, 2003 are not an accurate basis for comparison. Total assets were $105,658,571 for the first quarter ended March 31, 2004 as compared to $105,061,370 at fiscal year ended December 31, 2003. Funds from operations (FFO) were a loss of $113,975 or $0.01 per diluted weighted average common share for the quarter ended March 31, 2004. "The first quarter shows a growing portfolio. We now own two leased buildings and we have one mortgage loan outstanding as of the quarter end. Since the quarter ended, we purchased one additional leased building for $9.3 million. We currently have a very strong backlog of investment opportunities and are aggressively seeking to close many of those transactions for our second quarter. Due to the good backlog, we are beginning our search for a lender to provide us with a line of credit so that after we use the proceeds from the initial public offering, we can borrow funds to continue buying leased real estate. We are optimistic about the next six months." The financial statements are without footnotes so readers should obtain and carefully review our Form 10-Q for the period ended March 31, 2004, including the footnotes to the financial statements contained therein. We have filed this Form 10-Q today with the Securities and Exchange Commission ('SEC') which can be retrieved at the SEC website at www.SEC.gov or the web site for Gladstone Commercial at www.GladstoneCommercial.com. A paper copy can be obtained by writing to us at 1616 Anderson Road, McLean, VA 22102. Gladstone Commercial will have a conference call at 11:30 am EDT, May 10, 2004. Please call 866-253-5757 and use the ID code 461640 and you will be placed on hold until the conference starts. An operator will monitor the call and set a queue for the questions. The replay number will be available two hours after the end of the call for approximately 30 days. The replay number is 888-266-2081 and use ID code 461640. For further information contact Chief Financial Officer, Harry Brill or Director of Shareholder Relations, Skye Breeden at 703-286-7000. Gladstone Commercial Corporation Consolidated Balance Sheet (Unaudited) March 31, December 31, 2004 2003 ASSETS Real estate, net $9,020,410 $5,436,153 Mortgage note receivable 11,170,000 - Cash and cash equivalents 84,667,117 99,075,765 Restricted deposits 205,508 - Interest receivable - mortgage note 68,261 - Deferred rent receivable 13,764 - Prepaid expenses 150,812 191,432 Other assets 18,266 - Lease intangibles, net of accumulated amortization of $14,795 and $1,208, respectively 344,433 358,020 Total Assets $105,658,571 $105,061,370 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Due to Adviser $590,410 $234,295 Accounts payable 24,161 - Dividends payable 917,040 76,420 Accrued expenses 78,105 - Restricted deposits 205,508 - Rent received in advance and security deposits 210,767 - Total liabilities 2,025,991 310,715 Commitments and contingencies Stockholders' Equity Common stock, $0.001 par value, 20,000,000 shares authorized, 7,642,000 shares issued and outstanding 7,642 7,642 Additional paid-in capital 105,052,574 105,060,304 Distributions in excess of accumulated earnings (1,427,636) (317,291) Total Stockholders' Equity 103,632,580 104,750,655 Total Liabilities and Stockholders' Equity $105,658,571 $105,061,370 Gladstone Commercial Corporation Consolidated Statements of Operations (Unaudited) For the Period For the Three February 14, 2003 Months Ended (Inception) to March 31, March 31, 2004 2003 OPERATING REVENUES: Rental income $ 197,773 $ - Interest income - mortgage 133,419 Total operating revenues 331,192 OPERATING EXPENSES: Management advisory fee 229,416 - Depreciation and amortization 79,330 - General and administrative 388,213 10,549 Total expenses from operations 696,959 10,549 Net loss from operations (365,767) (10,549) INTEREST INCOME - temporary investments 172,462 - NET LOSS $ (193,305) $ (10,549) Basic loss per share $ (0.03) $ (0.20) Diluted loss per share $ (0.03) $ (0.20) Weighted average shares outstanding - basic 7,642,000 52,000 Weighted average shares outstanding - diluted 7,642,000 52,000 Gladstone Commercial Corporation Consolidated Statement of Cash Flows For the Period For the Three February 14, 2003 Months Ended (Inception) to (Unaudited) March 31, March 31, 2004 2003 Cash flows from operating activities: Net loss $(193,305) $(10,549) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 79,330 - Changes in assets and liabilities: Increase in mortgage interest receivable (68,261) - Decrease in prepaid expenses 40,620 - Increase in other assets (18,266) - Increase in deferred rent receivable (13,764) - Increase in due to Adviser 356,115 - Increase in accounts payable 24,161 10,549 Increase in accrued expenses 78,105 - Increase in rent received in advance and security deposits 210,767 - Net cash provided by operating activities 495,502 - Cash used in investing activities: Real estate investment (3,650,000) - Mortgage loan (11,170,000) - Net cash used in investing activities (14,820,000) - Cash flow from financing activities: Proceeds from share issuance, net - 10,000 Offering costs (7,730) - Dividends paid (76,420) - Net cash (used in) provided by financing activities (84,150) 10,000 Net (decrease) increase in cash and cash equivalents (14,408,648) 10,000 Cash and cash equivalents, beginning of period 99,075,765 - Cash and cash equivalents, end of period $84,667,117 $10,000 This press release may include statements that 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, including statements with regard to the future performance of the Company and the closing of any transaction. Words such as "believes," "expects," "projects" and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on the Company's current plans that are believed to be reasonable as of the date of this press release. Factors that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements include, among others, those factors listed under the caption "Risk factors" of the Company's prospectus, dated August 12, 2003, as filed with the Securities and Exchange Commission on August 13, 2003. 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. SOURCE Gladstone Commercial Corporation -0- 05/10/2004 /CONTACT: Skye Breeden of Gladstone Commercial Corporation, +1-703-286-7000/ /Web site: http://www.gladstonecommercial.com/ (GOOD) CO: Gladstone Commercial Corporation ST: Virginia IN: RLT SU: ERN CCA