Property Management and Occupancy - As of September 30, 2025, the company owned 151 properties totaling 17.7 million square feet of rentable space, with an occupancy rate of 99.1%[120] - The company collected 100% of all outstanding base rents for the nine months ended September 30, 2025, demonstrating strong credit underwriting and asset management[123] - The company has no lease expirations for the remainder of 2025, indicating stability in rental income[127] - The company’s available vacant space represented only 0.9% of total square footage, with annual carrying costs of approximately $1.7 million[126] - The largest tenant contributed only 5.3% of total lease revenue for the nine months ended September 30, 2025, indicating a diversified portfolio[146] Financial Performance - Total operating revenues for Q3 2025 were $40,841,000, an increase of 4.1% compared to $39,235,000 in Q3 2024[163] - Net income for Q3 2025 was $4,137,000, a decrease of 64.7% from $11,721,000 in Q3 2024[163] - Funds from Operations (FFO) available to common stockholders for Q3 2025 was $16,264,000, up 1.1% from $16,084,000 in Q3 2024[163] - Total operating revenues for the nine months ended September 30, 2025, increased to $117,875,000, a 5.2% increase from $112,013,000 in 2024[165] - Net income available to common stockholders and Non-controlling OP Unitholders decreased to $4,358,000 for the nine months ended September 30, 2025, down 39.4% from $7,188,000 in 2024[175] - Funds from Operations (FFO) available to common stockholders and Non-controlling OP Unitholders increased to $46,763,000 for the nine months ended September 30, 2025, a 6.1% increase from $44,060,000 in 2024[165] Lease Activity - During the nine months ended September 30, 2025, the company executed 13 leases totaling 857,481 square feet with a weighted average remaining lease term of 7.3 years and annualized GAAP fixed lease payments of $13.1 million[131] - The company acquired 19 industrial properties during the nine months ended September 30, 2025, with a total purchase price of $207.9 million and a weighted average remaining lease term of 15.9 years[130] - The company sold two non-core properties for an aggregate sales price of $8.0 million during the nine months ended September 30, 2025, with an aggregate gain on sale of real estate of $0.4 million[129] - Lease revenues from same store properties for the nine months ended September 30, 2025, increased to $96,573,000, a 3.1% increase from $93,639,000 in 2024[167] Capital and Financing - The company amended its Credit Facility, increasing the Revolver from $125.0 million to $155.0 million, with fees of approximately $0.5 million incurred[134] - The company raised approximately $61.0 million in net proceeds by selling 4,412,814 shares of common stock under the 2024 Common Stock Sales Agreement during the nine months ended September 30, 2025[140] - The 2024 Registration Statement allows the company to issue up to $1.3 billion of securities, replacing the previous 2022 Registration Statement[141] - 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[180] - As of September 30, 2025, the company had $495.4 million outstanding under its Credit Facility at a weighted average interest rate of approximately 5.55%[189] Expenses and Costs - Total operating expenses for Q3 2025 were $26,021,000, down 8.8% from $28,546,000 in Q3 2024[163] - The base management fee for Q3 2025 was $1,701,000, reflecting an increase of 11.3% from $1,528,000 in Q3 2024[163] - The incentive fee for Q3 2025 was $709,000, a decrease of 38.1% compared to $1,146,000 in Q3 2024[163] - Property operating expenses for the nine months ended September 30, 2025, increased to $21,568,000, a 17.4% increase from $18,373,000 in 2024[170] - Interest expense for the nine months ended September 30, 2025, increased to $29,900,000, a 5.8% increase from $28,259,000 in 2024[172] Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2025, was $72.4 million, compared to $34.2 million for the same period in 2024[183] - Net cash used in investing activities during the nine months ended September 30, 2025, was $218.3 million, primarily for 19 property acquisitions[184] - Net cash provided by financing activities for the nine months ended September 30, 2025, was $155.4 million, mainly from the issuance of $62.2 million of equity[185] - Available liquidity as of September 30, 2025, was $24.6 million, consisting of approximately $18.4 million in cash and cash equivalents and $6.2 million in available borrowing capacity[176] Interest Rate and Risk Management - Interest rate risk is a primary concern, with the company utilizing derivative contracts to cap interest rates and manage exposure[200] - A 3% decrease in SOFR would result in a net income increase of $6,247,000, while a 3% increase would decrease net income by the same amount[203] - The company aims to limit the impact of interest rate changes on earnings and cash flows by borrowing primarily at fixed rates or low-margin variable rates[207] Other Income and Adjustments - Other income for the nine months ended September 30, 2025, increased to $590,000, a 708.2% increase from $73,000 in 2024[174] - The company incurred fees of approximately $4.2 million related to amending and upsizing its Credit Facility[186] - The company has eliminated the payment of the incentive fee for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023, as per the amended Advisory Agreement[156][157]
Gladstone Commercial Corporation(GOODN) - 2025 Q3 - Quarterly Report