Gladstone mercial (US:GOOD)2020-04-29 18:25Financial Data and Key Metrics Changes - Funds from operations (FFO) and core FFO available to common stockholders were both $0.39 and $0.40 per share respectively, indicating prudent growth and portfolio performance [35][36] - Total operating revenues increased to $33.6 million compared to total operating expenses of $24.1 million for the period [38] - Debt to gross assets reduced by nearly 15% to 46% over the past five years [38][41] Business Line Data and Key Metrics Changes - The company acquired five industrial properties during the quarter, totaling $72 million in investment volume [12][9] - Industrial allocation increased from 33% on January 1, 2019, to 41% as of March 31, 2020 [10] - Same-store cash rent grew at an annualized rate of 2% [36] Market Data and Key Metrics Changes - The buyer pool for commercial properties shrank significantly, with an estimated 790 unique buyers in March compared to an average of 2,100 from 2016 to 2019 [28][29] - Import volumes for East Coast ports are expected to be 10% below levels from the same period in 2019 [30] Company Strategy and Development Direction - The investment strategy emphasizes increasing the portfolio's industrial allocation to improve operating efficiencies and reduce capital expenditures [10] - The company plans to continue pursuing acquisition opportunities, particularly in industrial properties, as market conditions allow [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding tenant rent payments, with 98% of April scheduled rent paid [22][50] - The company is actively engaging with tenants to address rent deferral requests while aiming to maintain core FFO per share [20][62] - Management noted that the economic slowdown due to COVID-19 will impact the industry, but they are prepared to navigate these challenges [27][37] Other Important Information - Institutional ownership of the stock increased to 56% as of March 31 [47] - The company has not suspended its dividend since its IPO in 2003, maintaining a distribution yield of 9.4% [48] Q&A Session Summary Question: What are you seeing from your office versus industrial tenants? - More requests for rent deferrals have come from office tenants, with some opportunistic requests from strong tenants [57] Question: Are you getting any additional terms from tenants in exchange for deferrals? - The company prefers to maintain core FFO per share and has not agreed to interest charges on rent deferrals [62][64] Question: What is the current liquidity situation? - The company has $3 million in cash and $29.5 million available under its line of credit, totaling over $30 million in liquidity [65] Question: Why not adjust the dividend given the high payout ratio? - The company has no intention to cut the dividend, emphasizing its commitment to shareholders [73][76] Question: What are the bright and dark spots in the portfolio? - Concerns exist regarding retail tenants, while optimism is noted for industrial tenants, especially with potential on-shoring of manufacturing [84][86] Question: How has the pandemic impacted re-leasing operations? - Re-leasing activity has dropped in certain areas, but there are positive developments in others, such as Minneapolis [99] Question: What is the breakdown between manufacturing and distribution in the portfolio? - The portfolio is approximately 40% manufacturing and 60% distribution, with few deferral requests from industrial tenants [104]