Gladstone mercial (US:GOOD)2023-05-04 15:57Financial Data and Key Metrics Changes - FFO and core FFO per share available to common stockholders were both $0.37 for Q1 2023, down from $0.39 and $0.40 in Q1 2022 respectively [14] - Total operating revenues for Q1 2023 were $36.6 million, compared to $35.5 million in Q1 2022, while operating expenses decreased from $25.7 million to $25.4 million [14] Business Line Data and Key Metrics Changes - Same-store lease revenues increased by 5.8% in Q1 2023 compared to Q1 2022 [14] - The company aims to increase its industrial asset allocation to over 60% within the next 6 to 12 months, having already increased from 32% to 59% since 2019 [26] Market Data and Key Metrics Changes - The industrial sector accounted for approximately 25% of all commercial property sales, outperforming other asset classes [12] - There has been a significant reduction in sales listing activities and a drop in transaction volumes by over 50% year-over-year due to rising interest rates [12][48] Company Strategy and Development Direction - The company is focusing on capital recycling into industrial assets and reducing exposure to the office market to derisk its portfolio [11] - The current acquisition pipeline includes approximately $408 million in volume, all of which are industrial properties [27] Management's Comments on Operating Environment and Future Outlook - Management noted that while the office property market faces challenges, the industrial property market remains strong, with a focus on efficiency and productivity among major employers [6][11] - The company is optimistic about future acquisition opportunities despite a challenging economic backdrop [12][48] Other Important Information - The company has $26.25 million in revolver borrowings outstanding and raised $4 million through common stock sales in Q1 2023 [15] - The common stock dividend remains at $0.30 per share per quarter, totaling $1.20 per year [15] Q&A Session Summary Question: What are the expectations for filling vacancies in the portfolio? - The company is actively looking to sell office assets with vacancies and has several transactions in progress [33] Question: How does the company plan to refinance the $54.8 million debt maturing in 2023? - The company is in contact with potential lenders and expects to manage the refinancing despite high rates [34] Question: What is the expected dollar amount on the 7.5 cap rate assets to be acquired in the next 45 days? - The $25.5 million mentioned includes deals that are currently in due diligence [42] Question: Will the company consider acquiring office assets in the next 12 to 18 months? - The company plans to focus 100% on industrial acquisitions due to the uncertainty in the office market [45] Question: How is the company managing its interest rate caps and potential increases in interest expense? - The company has about $60 million in caps expiring in early 2024 and is monitoring the market for potential swaps [54]