Gladstone Commercial Corporation Provides a Business Update
MCLEAN, Va., April 22, 2020 (GLOBE NEWSWIRE) -- 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:
|Buzz Cooper||Matt Tucker|
|Senior Managing Director||Senior Managing Director|
|(703) 287-5815||(703) 287-5830|
|Southeast / West:|
Investor or Media Inquiries:
|President – Gladstone Commercial Corporation|
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
Released April 22, 2020