Property Management and Occupancy - As of June 30, 2025, the company owned 143 properties totaling 17.0 million square feet of rentable space, with an occupancy rate of 98.7%[111]. - The company collected 100% of all outstanding base rents for the six months ended June 30, 2025, demonstrating strong credit underwriting and asset management[115]. - The company has a manageable lease expiration schedule for the remainder of 2025, equating to 1.5% of lease revenue as of June 30, 2025[121]. - The average remaining lease term of the portfolio is 7.0 years, providing stability in rental income[111]. - For the six months ended June 30, 2025, the largest tenant contributed only 5.3% of total lease revenue, indicating a diversified tenant portfolio[136]. - Texas accounted for 16.8% of lease revenue for the three months ended June 30, 2025, with $6.6 million, up from 12.5% in the same period of 2024[137]. Financial Performance - Total operating revenues for Q2 2025 were $39,533,000, an increase of 6.7% from $37,057,000 in Q2 2024[153]. - Net income for Q2 2025 was $4,634,000, representing a significant increase of 189.6% compared to $1,600,000 in Q2 2024[153]. - Funds from Operations (FFO) available to common stockholders for Q2 2025 was $15,338,000, up 6.2% from $14,437,000 in Q2 2024[153]. - Total operating revenues for the six months ended June 30, 2025, increased to $77.034 million, a 5.8% increase from $72.779 million in 2024[155]. - Net income for the six months ended June 30, 2025, rose to $9.773 million, representing a 90.7% increase from $5.125 million in 2024[155]. - Funds from Operations (FFO) available to common stockholders for the six months ended June 30, 2025, increased to $30.501 million, a 9.0% increase from $27.976 million in 2024[155]. Capital Management and Financing - The company entered into a 2024 Common Stock Sales Agreement, allowing for the issuance of up to $250.0 million in common stock, raising approximately $38.0 million in net proceeds from the sale of 2,521,007 shares during the six months ended June 30, 2025[130]. - The 2024 Registration Statement, effective March 21, 2024, permits the issuance of up to $1.3 billion in securities, replacing the previous 2022 Registration Statement[131]. - The company has the ability to raise up to $1.0 billion of additional equity capital through future public offerings under the 2024 Registration Statement[170]. - The company issued $20.0 million in unsecured Term Loan D, which has a maturity date of May 30, 2027[178]. - The company raised net proceeds of $38.0 million from common equity and $0.4 million from Series F Preferred Stock during the six months ended June 30, 2025[169]. Property Acquisitions and Sales - During the six months ended June 30, 2025, the company executed a capital recycling program, selling one non-core property for $5.05 million, resulting in an aggregate gain of $377,000[123]. - The company acquired ten industrial properties during the same period, totaling 874,871 square feet with a weighted average remaining lease term of 14.3 years and a purchase price of $153.07 million[124]. - Net cash used in investing activities was $155.8 million for the six months ended June 30, 2025, primarily due to ten property acquisitions[174]. Expenses and Cost Management - Total operating expenses for Q2 2025 decreased by 3.2% to $25,146,000 from $25,973,000 in Q2 2024[153]. - Property operating expenses increased by 25.0% to $7,258,000 in Q2 2025 from $5,807,000 in Q2 2024[153]. - General and administrative expenses increased for the six months ended June 30, 2025, primarily due to higher audit expenses and costs associated with the termination of the Series F Preferred Stock offering[161]. - Interest expense increased for the six months ended June 30, 2025, primarily due to higher costs on variable rate debt and new interest expense on the 2029 Notes[162]. Market Conditions and Future Outlook - National industrial rents increased by 2.6% year over year in the second quarter of 2025, indicating steady demand and sustainable long-term growth[113]. - The company continues to monitor market conditions and expects industrial demand to be supported by government investment in infrastructure and advanced manufacturing[117]. - Future interest rate changes may affect the company's liquidity and expansion plans, particularly related to Revolver and Term Loans[196]. - The company aims to limit the impact of interest rate changes on earnings and cash flows by primarily borrowing at fixed rates or low-margin variable rates[196]. - The company is exposed to market risks including interest rate fluctuations, which may affect the value of real estate and refinancing capabilities[197]. Liquidity and Financial Position - The company has adequate liquidity, with cash on hand and availability under its Credit Facility sufficient to cover near-term obligations[116]. - Available liquidity as of June 30, 2025, was $38.7 million, consisting of approximately $11.7 million in cash and cash equivalents and $27.0 million in available borrowing capacity under the Credit Facility[166]. - The company had mortgage notes payable totaling $259.5 million, with a weighted average interest rate of 4.22% and a remaining average maturity of 3.1 years as of June 30, 2025[171]. - The company anticipates being able to refinance $35.4 million of mortgage debt due in 2026 through various financing options[172]. Shareholder and Governance Matters - The Board of Directors renewed the Advisory Agreement and Administration Agreement for an additional year, through August 31, 2026[142]. - The company reclassified 26,000,000 shares of common stock to Series F Preferred Stock, reducing common stock shares from 86,290,000 to 60,290,000[132]. - The Series F Preferred Stock offering raised $0.4 million in net proceeds during the six months ended June 30, 2025[132]. - The net incentive fee paid to the Adviser decreased due to a larger portion of the fee being waived for the three and six months ended June 30, 2025[161].
Gladstone Commercial Corporation(GOODN) - 2025 Q2 - Quarterly Report