Financial Performance - Total operating revenue for Q3 2024 was $39.235 million, a 5.9% increase from $37.057 million in Q2 2024[3] - Net income available to common stockholders for Q3 2024 was $8.511 million, or $0.20 per share, compared to a net loss of $1.625 million, or $0.04 per share in Q2 2024[7] - Core funds from operations (Core FFO) for Q3 2024 was $16.3 million, an 11.2% increase from $14.534 million in Q2 2024, equating to $0.38 per share[6] Property Management - The company collected 100% of cash rents due during Q3 2024 and October 2024[10] - The company renewed or leased 242,467 square feet of space with lease terms ranging from 6.1 to 8.9 years[9] - The company expects same store rents to continue rising, having increased by 2% annually in recent years[10] - Collected 100% of cash rents due in October[14] Capital Transactions - The company sold two non-core properties for an aggregate of $14.2 million as part of its capital recycling program[9] - The company acquired a fully-occupied property for $10.2 million at a cap rate of 9.94%[9] Equity and Debt Management - Total equity and mezzanine equity increased by 7.4% to $339.087 million from $315.862 million[4] - Issued 182,368 shares under ATM Program for net proceeds of $2.9 million[14] - Issued 4,000 shares of Series F Preferred Stock for net proceeds of $0.1 million[14] - Borrowed $15.2 million in fixed rate mortgage debt at an interest rate of 5.60%[14] - Repaid $14.8 million in fixed rate mortgage debt at an interest rate of 4.04%[14] Distributions - Declared monthly cash distributions totaling $0.30 per share on common stock and Non-controlling OP Units for October, November, and December 2024[14] - Declared $0.414063 per share on Series E Preferred Stock and $0.375 per share on Series F and G Preferred Stocks[14] Liquidity Outlook - The company anticipates continued access to debt and equity markets for added liquidity[10]

Property Management - As of September 30, 2024, the company owned 135 properties totaling 16.8 million square feet of rentable space, with an occupancy rate of 98.5%[105] - The company collected 100% of all outstanding cash rents for the nine months ended September 30, 2024, indicating strong tenant performance[111] - The company executed ten leases during the nine months ended September 30, 2024, covering an aggregate square footage of 2,626,199 with a weighted average remaining lease term of 6.3 years[121] - The company has a diverse tenant base with no significant exposure to retail, hospitality, airlines, and oil and gas industries, mitigating regional economic risks[111] - The largest tenant accounted for only 4.3% of total lease revenue for the nine months ended September 30, 2024, indicating a diversified portfolio[132] Financial Performance - Total lease revenue for the nine months ended September 30, 2024, was $112.0 million, compared to $111.7 million for the same period in 2023[133] - Total operating revenues for Q3 2024 were $39,235,000, an increase of 7.6% compared to $36,464,000 in Q3 2023[149] - Net income for Q3 2024 reached $11,721,000, a significant increase of 554.1% from $1,792,000 in Q3 2023[149] - Funds from Operations (FFO) available to common stockholders for Q3 2024 was $16,084,000, up 22.5% from $13,127,000 in Q3 2023[149] - Net income for the nine months ended September 30, 2024, was $16,843, a significant increase of $16,473 or 4,452.2% compared to $370 in 2023[151] Property Transactions - The company sold six non-core properties during the nine months ended September 30, 2024, for an aggregate sales price of $36.3 million, resulting in an aggregate gain on sale of real estate of $10.6 million[118] - The company acquired six industrial properties during the same period, with a total purchase price of $22.1 million and a weighted average lease term of 21.0 years[119] - The company sold six non-core office properties during the nine months ended September 30, 2024, resulting in a gain on sale of real estate[159] Debt and Financing - The company amended its Credit Facility in 2019 to increase borrowing capacity and extended its maturity date, ensuring adequate liquidity for near-term obligations[112] - The company repaid two mortgages totaling $17.7 million during the nine months ended September 30, 2024, with an interest rate of 5.05%[122] - As of September 30, 2024, the company had 39 mortgage notes payable totaling $273.4 million, with a weighted average interest rate of 4.23%[167] - The company anticipates being able to refinance $34.3 million of mortgage debt due in 2025 through various financing options[169] - The company raised net proceeds of $49.5 million from common equity under the 2024 Common Stock Sales Agreement during the nine months ended September 30, 2024[165] Liquidity and Capital Management - Available liquidity as of September 30, 2024, was $80.7 million, consisting of approximately $10.5 million in cash and cash equivalents and $70.2 million in available borrowing capacity under the Credit Facility[162] - The company had the ability to raise up to $1.0 billion of additional equity capital through future public offerings under the 2024 Registration Statement[166] - Total contractual obligations as of September 30, 2024, amounted to $821.9 million, with $72.7 million due in less than one year[175] Interest Rate Risk - The company has entered into derivative contracts to cap interest rates for its variable rate notes payable and has implemented interest rate swaps to manage interest rate risk[185] - Future interest rate changes may impact the company's liquidity and expansion plans, particularly concerning its Revolver and Term Loans[191] - The company aims to limit the impact of interest rate changes on earnings and cash flows by primarily borrowing at fixed rates or the lowest available variable rates[191] - A 3% decrease in SOFR would result in a net income increase of $3,667,000, while a 3% increase would lead to a net income decrease of $1,842,000[188] Management and Strategy - The company’s management team has extensive experience in real estate and mortgage loan origination, led by Mr. David Gladstone as chairman and CEO[134] - The company is positioned to navigate the current business environment despite uncertainties, including interest rate fluctuations and geopolitical factors[110] - The value of the company's real estate is subject to fluctuations based on local economic conditions and the creditworthiness of lessees, which may affect refinancing capabilities[192]

Property Management and Operations - As of June 30, 2024, the company owned 136 properties totaling 16.8 million square feet of rentable space, with an occupancy rate of 98.5%[99] - The company collected 100% of all outstanding cash rents for the six months ended June 30, 2024, indicating strong rent collection performance[105] - During the six months ended June 30, 2024, the company executed seven leases totaling 2,475,036 square feet with an annualized GAAP fixed lease payment of $12.6 million[114] - The company sold four non-core properties during the six months ended June 30, 2024, generating an aggregate sales price of $22.2 million[112] - The company acquired five industrial properties during the same period, with a total purchase price of $11.95 million and a weighted average lease term of 25.1 years[113] - The company has a manageable lease expiration schedule for the remainder of 2024, equating to 2.1% of lease revenue at June 30, 2024[110] - The largest tenant contributed only 4.4% of total lease revenue, indicating a diversified portfolio strategy[126] Financial Performance - Total lease revenue for the three months ended June 30, 2024, was $37.1 million, a decrease from $38.7 million in the same period of 2023[128] - For the six months ended June 30, 2024, total lease revenue was $72.8 million, compared to $75.2 million for the same period in 2023[128] - Total operating revenues for Q2 2024 were $37,057,000, a decrease of 4.1% from $38,658,000 in Q2 2023[144] - Net income for Q2 2024 was $1,600,000, compared to a net loss of $4,588,000 in Q2 2023, representing a 134.9% improvement[144] - Funds from Operations (FFO) available to common stockholders for Q2 2024 was $14,437,000, down 12.2% from $16,452,000 in Q2 2023[144] - Total operating revenues for the six months ended June 30, 2024, were $72,779, a decrease of $2,433 or 3.2% compared to $75,212 in 2023[146] - Net income attributable to common stockholders and Non-controlling OP Unitholders increased to $5,125 for the six months ended June 30, 2024, compared to a loss of $1,420 in 2023, representing a change of $6,545[146] - Funds from Operations (FFO) available to common stockholders and Non-controlling OP Unitholders decreased by $3,215 or 10.3% for the six months ended June 30, 2024, totaling $27,976 compared to $31,191 in 2023[146] Debt and Financing - The weighted average remaining term of the company's mortgage debt was 3.7 years, with a weighted average interest rate of 4.24%[99] - The company repaid two mortgages totaling $17.67 million during the six months ended June 30, 2024, with an interest rate of 5.05%[116] - The total principal amount of mortgage notes payable as of June 30, 2024, was $275.7 million, with a weighted average interest rate of 4.24%[163] - As of June 30, 2024, the company had $451.2 million outstanding under its Credit Facility at a weighted average interest rate of approximately 6.79%[170] - The company anticipates being able to refinance $34.4 million of mortgage debt due in 2025 through various financing options[165] - Interest expense increased by $1,051 or 5.9% for the six months ended June 30, 2024, totaling $18,960 compared to $17,909 in 2023[154] Equity and Capital Raising - The company entered into a 2023 Common Stock Sales Agreement for an aggregate offering amount of $250.0 million but did not sell any shares during the six months ended June 30, 2024[119] - An amendment to the 2023 Common Stock Sales Agreement allowed for the issuance of shares under a new 2024 Common Stock Sales Agreement, raising approximately $10.6 million from the sale of 756,214 shares[120] - The 2024 Registration Statement permits the issuance of up to $1.3 billion of securities, replacing the previous 2022 Registration Statement[122] - The company sold 25,780 shares of Series F Preferred Stock, raising $0.6 million in net proceeds during the six months ended June 30, 2024[123] - As of June 30, 2024, the company had raised net proceeds of $10.6 million from common equity and $0.6 million from Series F Preferred Stock sales[161] - The company has the ability to raise up to $1.1 billion of additional equity capital through future public offerings under the 2024 Registration Statement[162] Operating Expenses - Total operating expenses for Q2 2024 were $25,973,000, a decrease of 23.0% from $33,716,000 in Q2 2023[144] - Property operating expenses decreased by 13.8% to $5,807,000 in Q2 2024 from $6,738,000 in Q2 2023[144] - Total operating expenses for the six months ended June 30, 2024, were $49,290, down $9,089 or 15.6% from $58,379 in 2023[146] - The base management fee for Q2 2024 was $1,516,000, down 5.5% from $1,605,000 in Q2 2023[144] - The incentive fee for Q2 2024 was $1,245,000, reflecting a 100% increase as it was not applicable in Q2 2023[144] - The company eliminated the payment of the incentive fee for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023[137][138] Market Conditions - The commercial real estate sector faced uncertainty in the first half of 2024, with the Federal Reserve maintaining the federal funds rate at 5.25% - 5.50%[100] - The industrial sector showed strong fundamentals, with U.S. industrial net absorption more than doubling to 46.3 million square feet in Q2 2024[101] Cash Flow and Liquidity - Net cash provided by operating activities for the six months ended June 30, 2024, was $28.6 million, consistent with $30.7 million for the same period in 2023[166] - Net cash used in financing activities during the six months ended June 30, 2024, was $36.1 million, primarily due to $22.1 million of mortgage principal repayments[168] - The company reported net cash provided by investing activities of $5.8 million during the six months ended June 30, 2024, primarily from a five-property acquisition[167] - Available liquidity as of June 30, 2024, was $52.5 million, consisting of approximately $10.4 million in cash and cash equivalents and $42.1 million in available borrowing capacity under the Credit Facility[158] Interest Rate Management - The effective average SOFR was 5.33%, with a potential impact on net income of $4.061 million for a 3% decrease in SOFR[182] - The fair value of outstanding mortgage debt was $245.8 million as of June 30, 2024, with a potential change in fair value of $7.4 million for a 1% increase in interest rates[184] - The company has entered into derivative contracts to cap interest rates for variable rate notes payable and has implemented interest rate swaps to manage interest rate risk[180] - The company aims to limit the impact of interest rate changes on earnings and cash flows by primarily borrowing at fixed rates or variable rates with the lowest margins available[186] - The company is exposed to additional interest rate changes due to its Revolver and Term Loans, which are used to maintain liquidity and fund expansion[186]

Property and Occupancy - As of March 31, 2024, the company owned 131 properties totaling 16.7 million square feet of rentable space, with an occupancy rate of 98.9%[104]. - The company executed three leases during the three months ended March 31, 2024, with an aggregate square footage of 740,948 and a weighted average remaining lease term of 6.4 years[118]. - The overall vacancy rate in the industrial sector was reported at 5.8% in Q1 2024, below the historical average of 7.0%[106]. - The company has a manageable lease expiration schedule for the remainder of 2024, equating to 4.8% of lease revenue[115]. - The largest tenant contributed only 4.3% of total lease revenue for the three months ended March 31, 2024, indicating a diversified portfolio[128]. - The company’s largest state for lease revenue in Q1 2024 was Texas, contributing $4.526 million (12.7%) of total lease revenue[128]. Financial Performance - Total lease revenue for the three months ended March 31, 2024, was $35.721 million, a decrease from $36.554 million in the same period of 2023[128]. - Total operating revenues for the three months ended March 31, 2024, were $35,721,000, a decrease of 2.3% from $36,554,000 in the same period of 2023[145]. - Lease revenues from same store properties increased by 0.8% to $30,521,000 for the three months ended March 31, 2024, compared to $30,771,000 in 2023[147]. - Total operating expenses decreased by 5.5% to $23,315,000 for the three months ended March 31, 2024, down from $24,664,000 in 2023[145]. - Net income available to common stockholders and non-controlling OP unitholders increased to $306,000 for the three months ended March 31, 2024, compared to $34,000 in 2023, representing an increase of 800%[145]. - Funds from Operations (FFO) available to common stockholders and non-controlling OP unitholders decreased by 8.1% to $13,542,000 for the three months ended March 31, 2024, down from $14,738,000 in 2023[145]. - Funds from Operations (FFO) available to common stockholders for Q1 2024 was $13.5 million, down from $14.7 million in Q1 2023, with basic FFO per share at $0.34[178]. Debt and Liquidity - The weighted average remaining term of the company's mortgage debt was 3.9 years, with a weighted average interest rate of 4.16%[104]. - The company believes it has adequate liquidity to cover near-term debt obligations and operating expenses[111]. - The available liquidity as of March 31, 2024, was $57.8 million, consisting of approximately $10.5 million in cash and cash equivalents and $47.3 million in available borrowing capacity under the Credit Facility[156]. - The company has total contractual obligations of $877.3 million as of March 31, 2024, with $31.2 million due within one year[170]. - As of March 31, 2024, the company had 39 mortgage notes payable totaling $278.0 million, with a weighted average interest rate of 4.16%[162]. - The company anticipates refinancing $27.1 million of mortgage debt due in 2025 through new mortgage debt and equity securities[164]. - As of March 31, 2024, the company had $446.0 million outstanding under its Credit Facility at a weighted average interest rate of approximately 6.80%[169]. - The maximum additional amount available to draw under the Credit Facility as of May 6, 2024, was $49.1 million[169]. Property Transactions - Property acquisitions since the beginning of 2020 totaled $372.7 million, primarily in the industrial sector, with a weighted average lease term of 13.6 years[115]. - The company sold three non-core properties during the three months ended March 31, 2024, for an aggregate sales price of $19.5 million[117]. - The company sold three non-core office properties during the three months ended March 31, 2024, resulting in a gain on sale of real estate, net, and a gain on debt extinguishment, net[154]. Interest Rate and Risk Management - The company has entered into interest rate swap agreements to mitigate interest rate risk, paying fixed rates between 3.15% and 3.75%[168]. - The company aims to manage interest rate risk by primarily borrowing at fixed rates or variable rates with the lowest margins available[185]. - The company may utilize derivative financial instruments such as interest rate swaps and caps to mitigate interest rate risk[185]. - A 1% change in interest rates would affect the fair value of debt instruments by $8.0 million for an increase and $8.3 million for a decrease[183]. - A 3% decrease in SOFR would result in a net income increase of $3,679,000, while a 3% increase would lead to a net income decrease of $2,310,000[182]. - The effective average SOFR was 5.34% as of March 31, 2024[181]. Construction and Market Conditions - The construction pipeline for new industrial properties has decreased by 10% since the end of 2023, indicating a slowdown in future construction activity[106]. - The value of the company's real estate is subject to fluctuations based on local and regional economic conditions[186]. - Changes in the creditworthiness of lessees and borrowers may impact the company's ability to refinance debt[186]. Management and 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]. - The Advisory Agreement was renewed for an additional year through August 31, 2024[132]. - No capital gain fee was recognized during the three months ended March 31, 2024, or 2023[139].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________________________________________________________ FORM 10-K ____________________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Comm ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023 1521 Westbranch Drive, Suite 100 22102 McLean, Virginia (Address of principal executive offices) (Zip Code) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 0 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 001-33097 GLADSTONE COMMERCIAL CORPORATION (Exact name of registrant as specified in its charter) Maryland 02-0681 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 001-33097 GLADSTONE COMMERCIAL CORPORATION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of registrant as specified in its charter) Maryland 02-068 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________________________________________________________ FORM 10-K ____________________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Comm ...