Financial Data and Key Metrics Changes - Funds from Operations (FFO) and Core FFO per share available to common shareholders were both $0.34 for Q1 2025, unchanged from Q1 2024 [15][21] - Total operating revenues increased to $37,500,000 in Q1 2025 from $35,700,000 in Q1 2024, while operating expenses rose to $23,900,000 from $23,300,000 [16] - Net assets increased from $1,090,000,000 to $1,160,000,000 due to acquisitions [17] Business Line Data and Key Metrics Changes - Same store rents increased by 6.6% in Q1 2025 compared to Q1 2024, driven by higher property expense recovery revenue and rental rates [15] - Portfolio occupancy remained high at 98.4% as of March 31, 2025 [11] Market Data and Key Metrics Changes - U.S. Treasury yields remained volatile, impacting inflation and economic growth outlooks [9] - Industrial real estate sector showed resilience with net absorption of 23,100,000 square feet in Q1 2025, matching the previous year's levels [9] Company Strategy and Development Direction - The company aims to increase industrial concentration in its portfolio to at least 70% and continues to focus on high-quality, mission-critical assets [11][12] - The strategy includes selectively disposing of non-core assets and extending lease terms to capture market opportunities [13] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the industrial real estate sector despite macroeconomic uncertainties and anticipates upward pressure on rental rates due to a slowdown in new construction [10][14] - The company has a strong liquidity position with over $99,000,000 available for acquisitions and has not seen material deterioration in credit quality [14][18] Other Important Information - The company sold one office property for a gain of $377,000 and recognized a selling profit of $3,900,000 from a sales-type lease [11][21] - The common stock dividend is $0.30 per share per quarter, with a yield of 8.68% at the last closing price [18] Q&A Session Summary Question: What is the current acquisition pipeline and market activity for industrial properties? - The company has approximately $70,000,000 in acquisitions expected to close in Q2 and a backlog of about $140,000,000 under review [23][24] Question: How will the acquisitions be funded? - The company has sufficient liquidity and is exploring various financing sources, including potential joint ventures [25] Question: Are sellers more willing to negotiate on price? - The company noted a combination of increased asset availability and willingness from sellers to negotiate, aided by strong broker relationships [29] Question: What is the status of lease expirations for 2026 and 2027? - The company is actively managing lease expirations and is in discussions for upcoming renewals, with a focus on industrial properties [32] Question: What is the situation with the Austin office property? - The Austin property is generating positive cash flow, and the company is actively seeking new tenants [44] Question: Any changes in acquisition parameters due to government policy? - The company finds light manufacturing more attractive compared to warehouse distribution, aligning with its focus on reshoring and onshoring [46] Question: What is the competition like in the leasing market? - The leasing market is competitive, primarily with end users, and the company remains well-positioned to meet tenant needs [56]

Financial Data and Key Metrics Changes - Funds from Operations (FFO) and Core FFO per share remained stable at $0.34 for both Q1 2025 and Q1 2024 [14] - Total operating revenues increased to $37,500,000 in Q1 2025 from $35,700,000 in Q1 2024, while operating expenses rose to $23,900,000 from $23,300,000 [15] - Net assets increased from $1,090,000,000 to $1,160,000,000 due to acquisitions [15] Business Line Data and Key Metrics Changes - The company acquired industrial properties totaling 355,778 square feet for $73,250,000, increasing industrial concentration to 65% of annualized straight-line rent [10] - Same store rents increased by 6.6% compared to the same period in 2024, driven by higher property expense recovery revenue and rental rates [14] Market Data and Key Metrics Changes - U.S. Treasury yields remain volatile, impacting inflation and economic growth outlooks [6] - Industrial real estate sector showed resilience with net absorption of 23,100,000 square feet, matching levels from the previous year, while vacancy rates rose slightly to 7% [7][8] Company Strategy and Development Direction - The company aims to increase industrial concentration to at least 70% and continues to focus on acquiring high-quality, mission-critical industrial assets [10][12] - The strategy includes selectively disposing of non-core assets and extending lease terms to capture market opportunities [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second quarter despite macroeconomic uncertainties and noted that the industrial sector continues to perform well [6][10] - The company is well-positioned with over $99,000,000 in availability via its line of credit and cash on hand for future acquisitions [13] Other Important Information - The company sold one office property for a gain of $377,000 and recognized a selling profit of $3,900,000 from a sales-type lease [10][21] - The common stock dividend is set at $0.30 per share per quarter, with a yield of 8.68% at the last closing price [18] Q&A Session Summary Question: What is the current acquisition pipeline and market activity for industrial properties? - Management indicated that they have approximately $70,000,000 under contract and a backlog of about $140,000,000 consisting of 10 assets, with increased competition from family offices and private equity [23][24] Question: Are sellers more willing to negotiate on price? - Management noted a combination of both increased asset availability and seller willingness to negotiate, aided by strong broker relationships [30] Question: What is the status of lease expirations for 2026 and 2027? - Management is actively working on lease expirations for 2026 and 2027, with a good handle on upcoming negotiations [34] Question: What is the situation with the Austin office property? - Management reported positive cash flow from the Austin property and ongoing efforts to increase tenancy [46] Question: Any changes in acquisition parameters due to government policy? - Management confirmed a focus on light manufacturing, which is seen as more attractive compared to warehouse distribution in the current environment [48]

分组1 - Gladstone Commercial reported quarterly funds from operations (FFO) of $0.34 per share, matching the Zacks Consensus Estimate and remaining unchanged from the previous year [1] - The company achieved revenues of $37.5 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 0.96% and up from $35.72 million a year ago [2] - Over the last four quarters, Gladstone Commercial has surpassed consensus revenue estimates three times [2] 分组2 - The stock has underperformed, losing approximately 13.3% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The current consensus FFO estimate for the upcoming quarter is $0.36 on revenues of $37.96 million, and for the current fiscal year, it is $1.43 on revenues of $152.52 million [7] - The Zacks Industry Rank for REIT and Equity Trust - Other is in the bottom 37% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Supplemental Financial & Operating Information for the Quarter Ended March 31, 2025 | Nasdaq: GOOD Legal Disclaimer Forward-Looking Statements: This presentation may include forward-looking statements within the meaning of the Securities Act of 1933 or the Securities Exchange Act of 1934. Forward-looking statements are typically identified by words such as "estimate," "may," "might," "believe," "will," "provided," "anticipate," "future," "could," "growth," "plan," "project," "intend," "expect," "should," "w ...

Gladstone Commercial Corporation Reports Results for the First Quarter Ended March 31, 2025 Please note that the limited information that follows in this press release is not adequate to make an informed investment judgment. MCLEAN, VA, May 7, 2025 (ACCESSWIRE) -- Gladstone Commercial Corporation (Nasdaq: GOOD) ("Gladstone Commercial" or the "Company") today reported financial results for the first quarter ended March 31, 2025. A description of funds from operations, or FFO, and Core FFO, both non-GAAP (gen ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the quarter [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows growth in total assets and liabilities, driven by real estate acquisitions and increased borrowings Balance Sheet Overview | Metric | March 31, 2025 (in Thousands) | December 31, 2024 (in Thousands) | Change (in Thousands) | % Change | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Total Assets | $1,160,443 | $1,094,348 | $66,095 | 6.04% | | Total Liabilities | $807,050 | $753,006 | $54,044 | 7.18% | | Total Mezzanine Equity | $170,041 | $170,041 | $0 | 0.00% | | Total Equity | $183,352 | $171,301 | $12,051 | 7.03% | - Real estate, net, increased from **$892.1 million** at December 31, 2024, to **$950.1 million** at March 31, 2025, reflecting new acquisitions[9](index=9&type=chunk) - Borrowings under Revolver significantly increased from **$1.9 million** at December 31, 2024, to **$51.3 million** at March 31, 2025[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) The company's operating revenues and net income increased significantly year-over-year, while comprehensive income declined Statement of Operations Overview | Metric | Three Months Ended March 31, 2025 (in Thousands) | Three Months Ended March 31, 2024 (in Thousands) | Change (in Thousands) | % Change | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Total Operating Revenues | $37,501 | $35,721 | $1,780 | 5.0% | | Total Operating Expenses | $23,858 | $23,315 | $543 | 2.3% | | Net Income | $5,136 | $3,526 | $1,610 | 45.7% | | Net Income Available to Common Stockholders | $1,915 | $304 | $1,611 | 529.9% | | Income per Weighted Average Share of Common Stock - Basic & Diluted | $0.04 | $0.01 | $0.03 | 300.0% | | Comprehensive Income | $1,120 | $8,943 | $(7,823) | -87.47% | - Lease revenue increased by **5.0%** year-over-year, from **$35.7 million** in Q1 2024 to **$37.5 million** in Q1 2025[10](index=10&type=chunk) - The company reported a significant increase in net income available to common stockholders, rising from **$0.3 million** in Q1 2024 to **$1.9 million** in Q1 2025[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations increased, while significant property acquisitions drove negative investing cash flow Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2025 (in Thousands) | Three Months Ended March 31, 2024 (in Thousands) | Change (in Thousands) | | :----------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Operating Activities | $17,684 | $15,023 | $2,661 | | Investing Activities | $(75,644) | $18,468 | $(94,112) | | Financing Activities | $58,247 | $(34,708) | $92,955 | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | $287 | $(1,217) | $1,504 | - Net cash used in investing activities significantly increased to **$75.6 million** in Q1 2025, primarily due to property acquisitions, compared to net cash provided of **$18.5 million** in Q1 2024[13](index=13&type=chunk) - Net cash provided by financing activities was **$58.2 million** in Q1 2025, a substantial increase from net cash used of **$34.7 million** in Q1 2024, driven by equity issuance and net borrowings on the credit facility[13](index=13&type=chunk) Notes to Condensed Consolidated Financial Statements [1. Organization, Basis of Presentation and Significant Accounting Policies](index=8&type=section&id=1.%20Organization,%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) The company operates as a REIT focused on industrial and office properties, with no material changes to accounting policies - Gladstone Commercial Corporation is a REIT focused on acquiring, owning, and managing industrial and office properties, externally managed by Gladstone Management Corporation and Gladstone Administration, LLC[18](index=18&type=chunk) - The company operates with one reporting segment: **Real Estate Rental Operations**, generating revenue through operating leases and aiming for earnings growth via rent increases, high occupancy, and property acquisitions[23](index=23&type=chunk) - ASU 2024-03, requiring disaggregation of income statement expenses, is effective for fiscal years beginning after December 15, 2026, and the company is evaluating its impact[25](index=25&type=chunk) [2. Related-Party Transactions](index=10&type=section&id=2.%20Related-Party%20Transactions) The company incurs management, incentive, and administration fees from affiliates controlled by its chairman and CEO - The company is externally managed by Gladstone Management Corporation (Adviser) and Gladstone Administration, LLC (Administrator), both affiliates controlled by Mr. David Gladstone[26](index=26&type=chunk) Fees Paid to Affiliates | Fee Type | Three Months Ended March 31, 2025 (in Thousands) | Three Months Ended March 31, 2024 (in Thousands) | Change (in Thousands) | % Change | | :---------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Base Management Fee | $1,568 | $1,535 | $33 | 2.1% | | Incentive Fee | $640 | $1,171 | $(531) | -45.3% | | Administration Fee | $622 | $630 | $(8) | -1.3% | - Gladstone Securities, an affiliate, earned **$0.03 million** in fees in Q1 2025 (vs. $0.02 million in Q1 2024) for acting as the exclusive dealer manager for the Series F Preferred Stock offering[39](index=39&type=chunk) [3. Earnings Per Share of Common Stock](index=13&type=section&id=3.%20Earnings%20Per%20Share%20of%20Common%20Stock) Earnings per share increased significantly due to higher net income available to common stockholders EPS Calculation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Net Income Available to Common Stockholders (in Thousands) | $1,915 | $304 | $1,611 | | Basic EPS of Common Stock | $0.04 | $0.01 | $0.03 | | Diluted EPS of Common Stock | $0.04 | $0.01 | $0.03 | | Weighted Average Shares Outstanding (Basic & Diluted) | 44,607,012 | 40,003,481 | 4,603,531 | - Convertible Senior Common Stock was excluded from diluted EPS calculations for both periods as it was anti-dilutive[45](index=45&type=chunk) [4. Real Estate and Intangible Assets](index=14&type=section&id=4.%20Real%20Estate%20and%20Intangible%20Assets) Net real estate assets grew due to the acquisition of six industrial properties during the first quarter Real Estate Assets | Real Estate Component | March 31, 2025 (in Thousands) | December 31, 2024 (in Thousands) | Change (in Thousands) | | :-------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Land | $145,313 | $139,743 | $5,570 | | Building and Improvements | $1,079,127 | $1,017,534 | $61,593 | | Tenant Improvements | $55,098 | $54,516 | $582 | | Accumulated Depreciation | $(329,448) | $(319,646) | $(9,802) | | Real Estate, Net | $950,090 | $892,147 | $57,943 | - **Six industrial properties** were acquired in Q1 2025 for an aggregate purchase price of **$73.7 million**, with a weighted average remaining lease term of 10.8 years[45](index=45&type=chunk)[46](index=46&type=chunk) Lease Revenue Breakdown | Lease Revenue Type | Three Months Ended March 31, 2025 (in Thousands) | Three Months Ended March 31, 2024 (in Thousands) | Change (in Thousands) | % Change | | :----------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Fixed Lease Payments | $32,448 | $31,789 | $659 | 2.1% | | Variable Lease Payments | $5,053 | $3,932 | $1,121 | 28.5% | | Total Lease Revenue | $37,501 | $35,721 | $1,780 | 5.0% | [5. Real Estate Dispositions, Held for Sale and Impairment Charges](index=18&type=section&id=5.%20Real%20Estate%20Dispositions,%20Held%20for%20Sale%20and%20Impairment%20Charges) No properties were sold in Q1 2025, and no impairment charges were recognized during the period - **No properties were sold in Q1 2025**, compared to three properties sold in Q1 2024[58](index=58&type=chunk) Assets Held for Sale | Asset Category | March 31, 2025 (in Thousands) | December 31, 2024 (in Thousands) | | :--------------- | :----------------------------- | :----------------------------- | | Total Real Estate Held for Sale | $4,337 | $4,337 | | Lease Intangibles, Net | $26 | $26 | | Total Assets Held for Sale | $4,363 | $4,363 | - **No impairment charges were recognized in Q1 2025**, a decrease from **$0.5 million** recognized in Q1 2024 on a held for sale asset[61](index=61&type=chunk) [6. Mortgage Notes Payable, Credit Facility, and Senior Unsecured Notes](index=19&type=section&id=6.%20Mortgage%20Notes%20Payable,%20Credit%20Facility,%20and%20Senior%20Unsecured%20Notes) Total debt increased to $740.7 million, with a weighted average interest rate of 5.28% Debt Overview | Debt Type | March 31, 2025 (in Thousands) | December 31, 2024 (in Thousands) | Stated Interest Rates at March 31, 2025 | Scheduled Maturity Dates at March 31, 2025 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | :-------------------------------------- | :--------------------------------------- | | Total Mortgage Notes Payable, Net | $267,326 | $269,579 | 2.80% to 6.63% (fixed), SOFR + 2.25% (variable) | Sep 30, 2025 - Aug 1, 2037 | | Borrowings under Revolver | $51,300 | $1,900 | SOFR + 1.35% | Aug 18, 2026 | | Borrowings under Term Loan A, Term Loan B, Term Loan C, Net | $348,121 | $347,948 | SOFR + 1.30% | Feb 11, 2026 - Feb 18, 2028 | | Senior Unsecured Notes, Net | $73,999 | $73,958 | 6.47% | Dec 18, 2029 | | Total Debt | $740,746 | $693,385 | Weighted Average: 5.28% | | - The company had **$401.3 million** outstanding under its Credit Facility at a weighted average interest rate of approximately **5.72%** as of March 31, 2025[76](index=76&type=chunk) Derivative Instruments | Derivative Instrument | March 31, 2025 (in Thousands) | December 31, 2024 (in Thousands) | | :-------------------- | :----------------------------- | :----------------------------- | | Interest Rate Swaps (Asset) | $5,218 | $8,965 | | Interest Rate Swaps (Liability) | $(289) | $(19) | | Total Derivative Liabilities, Net | $4,929 | $8,946 | [7. Commitments and Contingencies](index=22&type=section&id=7.%20Commitments%20and%20Contingencies) The company has future minimum rental payment obligations under four ground leases and outstanding letters of credit Future Lease Payments | Year | Operating Lease Payments Due (in Thousands) | Finance Lease Payments Due (in Thousands) | | :-------------------------- | :---------------------------------------- | :-------------------------------------- | | Nine Months Ending Dec 31, 2025 | $343 | $116 | | 2026 | $460 | $172 | | 2027 | $467 | $178 | | 2028 | $470 | $178 | | 2029 | $470 | $178 | | 2030 | $385 | $178 | | Thereafter | $2,974 | $7,098 | | Total Anticipated Lease Payments | $5,569 | $8,098 | - As of March 31, 2025, **$2.1 million** in letters of credit were outstanding for mortgage requirements[81](index=81&type=chunk) [8. Equity and Mezzanine Equity](index=23&type=section&id=8.%20Equity%20and%20Mezzanine%20Equity) Total equity increased due to common and preferred stock issuances, while certain preferred stocks are classified as mezzanine equity Equity Summary | Equity Component | March 31, 2025 (in Thousands) | December 31, 2024 (in Thousands) | Change (in Thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total Stockholders' Equity | $183,216 | $171,171 | $12,045 | | Non-Controlling Interest | $136 | $130 | $6 | | Total Equity | $183,352 | $171,301 | $12,051 | Distributions per Share | Distribution Type | Three Months Ended March 31, 2025 (per share) | Three Months Ended March 31, 2024 (per share) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Common Stock and Non-controlling OP Units | $0.30 | $0.30 | | Senior Common Stock | $0.2625 | $0.2625 | | Series E Preferred Stock | $0.414063 | $0.414063 | | Series F Preferred Stock | $0.375 | $0.375 | | Series G Preferred Stock | $0.375 | $0.375 | - The company sold 1,770,581 shares of common stock, raising approximately **$27.7 million** in net proceeds under the 2024 Common Stock Sales Agreement during Q1 2025[88](index=88&type=chunk) - A universal shelf registration statement (2024 Registration Statement) was filed, allowing for the issuance of up to **$1.3 billion** of securities[90](index=90&type=chunk) [9. Subsequent Events](index=26&type=section&id=9.%20Subsequent%20Events) Post-quarter activities include declared distributions, additional equity raised, two property sales, and a mortgage repayment Declared Monthly Distributions | Distribution Type | Monthly Distribution per Share (April-June 2025) | | :-------------------------------- | :--------------------------------------------- | | Common Stock and Non-controlling OP Units | $0.10 | | Senior Common Stock | $0.0875 | | Series E Preferred Stock | $0.138021 | | Series F Preferred Stock | $0.125 | | Series G Preferred Stock | $0.125 | - Through May 7, 2025, the company raised **$7.2 million** in net proceeds from common stock sales and **$0.1 million** from Series F Preferred Stock sales[95](index=95&type=chunk) - Two properties were sold in April 2025: one in Hickory, NC for **$5.1 million** (realizing a $0.4 million gain) and one in Tifton, GA for **$18.5 million** (recognizing a $3.9 million selling profit from a sales-type lease)[96](index=96&type=chunk)[97](index=97&type=chunk) - A **$7.2 million** variable-rate mortgage was fully repaid on April 30, 2025[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, and strategic activities for the first quarter [General](index=27&type=section&id=General) The company maintains a large, highly occupied portfolio of industrial and office properties across the United States - As of May 7, 2025, the company owned **139 properties** totaling **16.5 million square feet** across 27 states, with an occupancy rate of **98.7%**[105](index=105&type=chunk) - The weighted average remaining term of mortgage debt was **3.3 years** with a **4.23%** interest rate, and the average remaining lease term of the portfolio was **6.9 years**[105](index=105&type=chunk) [Business Environment](index=28&type=section&id=Business%20Environment) The company navigated interest rate volatility and shifting industrial leasing demand while maintaining strong rent collections - Interest rates and capital markets remained primary drivers in Q1 2025, with the 10-year U.S. Treasury yield ranging between **4.2% and 4.8%**[106](index=106&type=chunk) - Industrial leasing demand softened slightly in Q1 2025 (**6.4% decline** year-over-year in new leasing activity), but industrial rents increased **4.3%** year-over-year[107](index=107&type=chunk) - The company collected **100%** of all outstanding base rents for Q1 2025, demonstrating strong credit underwriting and asset management[109](index=109&type=chunk) - Available vacant space at March 31, 2025, represented **1.6%** of total square footage, with annual carrying costs of approximately **$2.0 million**[113](index=113&type=chunk) [Recent Developments](index=29&type=section&id=Recent%20Developments) The company actively managed its portfolio through acquisitions, dispositions, leasing, and financing activities - Post-Q1 2025, the company sold a 60,000 sq ft property in Hickory, NC for **$5.1 million** (realizing a $0.4 million gain) and a 676,031 sq ft property in Tifton, GA for **$18.5 million** (recognizing a $3.9 million selling profit from a sales-type lease)[116](index=116&type=chunk)[117](index=117&type=chunk) - **Six industrial properties** were acquired in Q1 2025 for **$73.7 million**, with a weighted average lease term of 10.8 years and annualized GAAP fixed lease payments of $6.1 million[118](index=118&type=chunk) - During and subsequent to Q1 2025, one lease was executed for **67,709 sq ft** with a 3.0-year weighted average remaining lease term and $0.3 million in annualized GAAP fixed lease payments[119](index=119&type=chunk) - A **$7.2 million** variable-rate mortgage was fully repaid on April 30, 2025[120](index=120&type=chunk) - The company sold 1,770,581 shares of common stock, raising **$27.7 million** in net proceeds under the 2024 Common Stock Sales Agreement during Q1 2025[123](index=123&type=chunk) [Diversity of Our Portfolio](index=31&type=section&id=Diversity%20of%20Our%20Portfolio) The portfolio demonstrates diversification across tenants, industries, and geographic locations, mitigating concentration risk - The largest tenant comprised only **5.4%** of total lease revenue for Q1 2025, indicating a diversified tenant base[128](index=128&type=chunk) Top 5 Industry Classifications by Revenue | Top 5 Industry Classifications | Q1 2025 Lease Revenue (in Thousands) | Q1 2025 Percentage of Lease Revenue | | :----------------------------- | :----------------------------------- | :---------------------------------- | | Automotive | $5,532 | 14.7% | | Diversified/Conglomerate Services | $5,244 | 14.0% | | Buildings and Real Estate | $3,818 | 10.2% | | Telecommunications | $3,472 | 9.3% | | Diversified/Conglomerate Manufacturing | $2,790 | 7.4% | Top 5 States by Revenue | Top 5 States by Lease Revenue | Q1 2025 Lease Revenue (in Thousands) | Q1 2025 Percentage of Lease Revenue | Number of Leases (Q1 2025) | | :---------------------------- | :----------------------------------- | :---------------------------------- | :------------------------- | | Texas | $5,328 | 14.2% | 17 | | Pennsylvania | $5,246 | 14.0% | 11 | | Florida | $4,386 | 11.7% | 9 | | Ohio | $3,085 | 8.2% | 15 | | North Carolina | $2,397 | 6.4% | 9 | [Our Adviser and Administrator](index=33&type=section&id=Our%20Adviser%20and%20Administrator) The company is externally managed by entities controlled by its chairman and CEO, who also manage other affiliated companies - The Adviser and Administrator are controlled by Mr. David Gladstone, who also serves as the company's chairman and CEO, ensuring alignment but also creating related-party dynamics[129](index=129&type=chunk)[131](index=131&type=chunk) - The Adviser and Administrator also provide services to other affiliated companies, including publicly-traded business development companies and REITs[130](index=130&type=chunk) [Advisory and Administration Agreements](index=33&type=section&id=Advisory%20and%20Administration%20Agreements) The agreements outline the fee structure for the external Adviser, including base management and performance-based incentive fees - The base management fee is calculated at an annual rate of **0.425%** of the prior calendar quarter's 'Gross Tangible Real Estate'[133](index=133&type=chunk) - The incentive fee is **15.0%** of pre-incentive fee Core FFO exceeding an **8.0%** annualized hurdle rate, capped at 15.0% of the average quarterly incentive fee paid over the previous four quarters where a fee was actually paid[137](index=137&type=chunk)[139](index=139&type=chunk) - The Advisory Agreement includes a termination fee equal to **two times** the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to termination without cause[141](index=141&type=chunk) [Significant Accounting Policies and Estimates](index=35&type=section&id=Significant%20Accounting%20Policies%20and%20Estimates) No material changes to the company's critical accounting policies or estimates occurred during the first quarter - No material changes to critical accounting policies or estimates occurred during the three months ended March 31, 2025[144](index=144&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Net income available to common stockholders increased substantially due to higher revenues and lower expenses - The weighted average yield on the total portfolio was **8.5%** as of March 31, 2025 and 2024[145](index=145&type=chunk) Q1 Operational Performance Comparison | Metric | Q1 2025 (in Thousands) | Q1 2024 (in Thousands) | $ Change | % Change | | :------------------------------------------------ | :--------------------- | :--------------------- | :------- | :------- | | Lease Revenue | $37,501 | $35,721 | $1,780 | 5.0% | | Property Operating Expenses | $6,900 | $5,884 | $1,016 | 17.3% | | Incentive Fee | $640 | $1,171 | $(531) | -45.3% | | Interest Expense | $(9,138) | $(9,497) | $359 | -3.8% | | Net Income Available to Common Stockholders and Non-controlling OP Unitholders | $1,917 | $306 | $1,611 | 526.5% | | Basic FFO per weighted average share and unit | $0.34 | $0.34 | $0 | 0.0% | - Lease revenues from same store properties increased by **6.6%** due to higher recovery revenue and increased rental rates from leasing activity[148](index=148&type=chunk) - Net income available to common stockholders and Non-controlling OP Unitholders increased significantly due to higher recovery revenue, increased rental rates, no impairment charge, and lower interest expense, partially offset by a higher net incentive fee[155](index=155&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained sufficient liquidity through cash reserves, credit facility availability, and equity issuances - Available liquidity as of March 31, 2025, was **$80.5 million**, comprising **$10.4 million** in cash and **$70.1 million** in available borrowing capacity under the Credit Facility[156](index=156&type=chunk) - The company raised **$27.7 million** in net proceeds from common equity and **$0.3 million** from Series F Preferred Stock sales during Q1 2025[159](index=159&type=chunk) - As of March 31, 2025, mortgage debt totaled **$269.1 million** across 45 properties, with a weighted-average interest rate of **4.29%** and a remaining weighted average maturity of **3.3 years**[161](index=161&type=chunk) - Net cash provided by operating activities was **$17.7 million** in Q1 2025, up from $15.0 million in Q1 2024[163](index=163&type=chunk) - Net cash used in investing activities was **$75.6 million** in Q1 2025, primarily for six property acquisitions and capital improvements[165](index=165&type=chunk) - Net cash provided by financing activities was **$58.2 million** in Q1 2025, driven by equity issuance and net borrowings on the credit facility[166](index=166&type=chunk) [Contractual Obligations](index=40&type=section&id=Contractual%20Obligations) The company has significant future obligations related to debt principal and interest, as well as lease payments Summary of Contractual Obligations | Contractual Obligations | Total (in Thousands) | Less than 1 Year (in Thousands) | 1-3 Years (in Thousands) | 3-5 Years (in Thousands) | More than 5 Years (in Thousands) | | :---------------------- | :------------------- | :------------------------------ | :----------------------- | :----------------------- | :------------------------------- | | Debt Obligations | $745,399 | $59,978 | $498,716 | $165,679 | $21,026 | | Interest on Debt Obligations | $111,731 | $38,853 | $56,028 | $15,342 | $1,508 | | Operating Lease Obligations | $5,569 | $457 | $931 | $932 | $3,249 | | Finance Lease Obligations | $8,098 | $155 | $356 | $356 | $7,231 | | Purchase Obligations | $13,298 | $11,412 | $1,886 | $0 | $0 | [Off-Balance Sheet Arrangements](index=41&type=section&id=Off-Balance%20Sheet%20Arrangements) The company reports no material off-balance sheet arrangements as of the end of the first quarter - The company did not have any material off-balance sheet arrangements as of March 31, 2025[172](index=172&type=chunk) [Funds from Operations](index=41&type=section&id=Funds%20from%20Operations) FFO, a non-GAAP measure, remained stable on a per-share basis compared to the prior year period - FFO (Funds from Operations) is a non-GAAP supplemental measure of operating performance for REITs, excluding gains/losses from property sales and impairment, plus depreciation and amortization of real estate assets[173](index=173&type=chunk) FFO Reconciliation | FFO Metric | Q1 2025 (in Thousands, except per share) | Q1 2024 (in Thousands, except per share) | | :------------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | FFO available to common stockholders and Non-controlling OP Unitholders - basic | $15,160 | $13,542 | | Basic FFO per weighted average share of common stock and Non-controlling OP Unit | $0.34 | $0.34 | | FFO available to common stockholders and Non-controlling OP Unitholders plus assumed conversions | $15,261 | $13,647 | | Diluted FFO per weighted average share of common stock and Non-controlling OP Unit | $0.34 | $0.34 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure, which it manages through derivative instruments - The primary market risk is interest rate risk, affecting variable-rate debt and leases, mitigated by interest rate caps and swaps[179](index=179&type=chunk)[185](index=185&type=chunk) Interest Rate Sensitivity Analysis | Interest Rate Change | Net Increase (Decrease) to Net Income (in Thousands) | | :------------------- | :--------------------------------------------------- | | 3% Decrease to SOFR | $1,779 | | 2% Decrease to SOFR | $1,186 | | 1% Decrease to SOFR | $593 | | 1% Increase to SOFR | $(593) | | 2% Increase to SOFR | $(1,186) | | 3% Increase to SOFR | $(1,779) | - As of March 31, 2025, the fair value of mortgage debt outstanding was **$255.9 million**; a 1% change in interest rates would alter this fair value by approximately **$7.0-$7.2 million**[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the quarter-end - Disclosure controls and procedures were evaluated and deemed **effective** as of March 31, 2025, providing reasonable assurance for timely and accurate reporting[187](index=187&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended March 31, 2025[188](index=188&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings - The company is not currently subject to any material legal proceedings, nor are any material legal proceedings threatened[191](index=191&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors since the last annual report - No material changes to risk factors were identified from those previously set forth in the Annual Report on Form 10-K for the year ended December 31, 2024[192](index=192&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales or issuer purchases of its equity securities during the period - There were no unregistered sales of equity securities or issuer purchases of equity securities[193](index=193&type=chunk) [Item 3. Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities during the period - There were no defaults upon senior securities[194](index=194&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This disclosure requirement is not applicable to the company's operations - Mine Safety Disclosures are not applicable to the registrant[195](index=195&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) No other material information was reported for the quarter - No officer or director adopted or terminated any Rule 10b5-1 trading agreement or non-Rule 10b5-1 trading arrangement during Q1 2025[196](index=196&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including governance documents and certifications - The exhibit index includes various corporate governance documents, such as Articles of Restatement, Bylaws, and Articles Supplementary for different classes of stock[198](index=198&type=chunk)[199](index=199&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed or furnished[199](index=199&type=chunk) - iXBRL (Inline eXtensible Business Reporting Language) documents for the financial statements and notes are attached as Exhibit 101[199](index=199&type=chunk) [SIGNATURES](index=48&type=section&id=SIGNATURES) The report is duly signed by the company's Chief Executive Officer and Chief Financial Officer - The report was signed by Gary Gerson, Chief Financial Officer, and David Gladstone, Chief Executive Officer and Chairman of the Board of Directors, on May 7, 2025[203](index=203&type=chunk)

Company Overview - Gladstone Commercial (GOOD) closed at $14.09, reflecting a -0.21% change from the previous day, underperforming the S&P 500's gain of 0.06% [1] - Over the past month, shares have decreased by 5.23%, compared to the Finance sector's loss of 3.73% and the S&P 500's loss of 4.29% [1] Upcoming Earnings - The earnings report for Gladstone Commercial is anticipated on May 7, 2025, with expected earnings of $0.34 per share, indicating no growth from the prior-year quarter [2] - Revenue is projected at $37.15 million, representing a 3.99% increase from the prior-year quarter [2] Full Year Projections - For the full year, earnings are estimated at $1.43 per share and revenue at $152.52 million, reflecting changes of +0.7% and +2.09% respectively from the previous year [3] Analyst Forecasts - Recent revisions to analyst forecasts for Gladstone Commercial are important as they indicate changes in near-term business trends [4] - Positive estimate revisions are viewed as a sign of optimism regarding the company's business outlook [4] Valuation Metrics - Gladstone Commercial has a Forward P/E ratio of 9.9, which is below the industry average of 10.2 [7] - The company's PEG ratio stands at 1.65, compared to the industry average of 2.34 [8] Industry Context - The REIT and Equity Trust - Other industry, part of the Finance sector, has a Zacks Industry Rank of 173, placing it in the bottom 31% of over 250 industries [9] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [9]

Gladstone Commercial (GOOD) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.Shares of this real estate investment trust have returned -4.7% over the past month versus the Zacks S&P 500 composite's -6.9% change. The Zacks REIT and Equity Trust - Other industry, to which Gladstone Commercial belongs, has lost 3.7% over this period. Now the key question is: Where could the stock be ...

Group 1 - The article emphasizes the importance of innovation and disruption in the financial sector, particularly focusing on high-tech and early growth companies [1] - It highlights the potential investment opportunities in growth buyouts and value stocks, suggesting a strategic approach to investment [1] Group 2 - The article does not provide specific financial data or performance metrics related to any particular company or industry [2][3]

Market Overview - The year 2025 has begun with significant volatility in REIT stock prices, comparable to the fluctuations seen during the onset of the 2020 pandemic [1] - Gladstone Commercial's stock price has decreased by approximately 16% year-to-date, indicating a broader trend of declining equity values in the REIT sector [1] Investment Strategy - Pacifica Yield is focused on long-term wealth creation by targeting undervalued yet high-growth companies, high-dividend stocks, REITs, and firms in the green energy sector [1]