Gladstone Commercial Corporation Reports Results for the Third Quarter Ended September 30, 2016
Please note that the limited information that follows in this press release is not adequate to make an informed investment judgment.
Summary Information (dollars in thousands, except share and per share data):
As of and for the three months ended | |||||||||||||||||||
$ Change | % Change | ||||||||||||||||||
Operating Data: | |||||||||||||||||||
Total operating revenue | $ | 21,589 | $ | 21,247 | $ | 342 | 1.6 | % | |||||||||||
Total operating expenses | (15,172 | ) | (1 | ) | (13,433 | ) | (3 | ) | (1,739 | ) | 12.9 | % | |||||||
Other expense, net | (6,490 | ) | (6,931 | ) | (4 | ) | 441 | (6.4 | )% | ||||||||||
Net (loss) income | $ | (73 | ) | $ | 883 | $ | (956 | ) | (108.3 | )% | |||||||||
Less: Dividends attributable to preferred stock | (2,002 | ) | (1,263 | ) | (739 | ) | 58.5 | % | |||||||||||
Less: Dividends attributable to senior common stock | (254 | ) | (251 | ) | (3 | ) | 1.2 | % | |||||||||||
Net loss attributable to common stockholders | $ | (2,329 | ) | $ | (631 | ) | $ | (1,698 | ) | 269.1 | % | ||||||||
Add: Real estate depreciation and amortization | 9,459 | 9,205 | 254 | 2.8 | % | ||||||||||||||
Add: Impairment charge | 1,786 | 187 | 1,599 | 855.1 | % | ||||||||||||||
Funds from operations available to common stockholders - basic | $ | 8,916 | $ | 8,761 | $ | 155 | 1.8 | % | |||||||||||
Add: Convertible senior common distributions | 254 | 251 | 3 | 1.2 | % | ||||||||||||||
Funds from operations available to common stockholders - diluted | $ | 9,170 | $ | 9,012 | $ | 158 | 1.8 | % | |||||||||||
Funds from operations available to common stockholders - basic | $ | 8,916 | $ | 8,761 | $ | 155 | 1.8 | % | |||||||||||
Add: Acquisition related expenses | 149 | 117 | 32 | 27.4 | % | ||||||||||||||
Add: Write-off of offering costs | 58 | 140 | (82 | ) | (58.6 | )% | |||||||||||||
Core funds from operations available to common stockholders - basic | $ | 9,123 | $ | 9,018 | $ | 105 | 1.2 | % | |||||||||||
Add: Convertible senior common distributions | 254 | 251 | 3 | 1.2 | % | ||||||||||||||
Core funds from operations available to common stockholders - diluted | $ | 9,377 | $ | 9,269 | $ | 108 | 1.2 | % | |||||||||||
Share and Per Share Data: | |||||||||||||||||||
Net loss attributable to common stockholders - basic & diluted | (0.10 | ) | (0.03 | ) | (0.07 | ) | 233.3 | % | |||||||||||
FFO available to common stockholders - basic | 0.38 | 0.39 | (0.01 | ) | (2.6 | )% | |||||||||||||
FFO available to common stockholders - diluted | 0.38 | 0.38 | — | — | % | ||||||||||||||
Core FFO available to common stockholders - basic | 0.39 | 0.40 | (0.01 | ) | (2.5 | )% | |||||||||||||
Core FFO available to common stockholders - diluted | 0.39 | 0.39 | — | — | % | ||||||||||||||
Weighted average shares of common stock outstanding - basic | 23,509,054 | 22,684,391 | 824,663 | 3.6 | % | ||||||||||||||
Weighted average shares of common stock outstanding - diluted | 24,309,170 | 23,484,507 | 824,663 | 3.5 | % | ||||||||||||||
Cash dividends declared per common share | $ | 0.375 | $ | 0.375 | $ | — | — | % | |||||||||||
Financial Position | |||||||||||||||||||
Real estate, before accumulated depreciation | $ | 812,166 | (2 | ) | $ | 794,824 | (5 | ) | $ | 17,342 | 2.2 | % | |||||||
Total assets | $ | 838,643 | $ | 818,285 | $ | 20,358 | 2.5 | % | |||||||||||
Mortgage notes payable, term preferred stock, term loan facility & line of credit, net | $ | 516,186 | $ | 540,144 | $ | (23,958 | ) | (4.4 | )% | ||||||||||
Total stockholders' and mezzanine equity | $ | 293,128 | $ | 252,087 | $ | 41,041 | 16.3 | % | |||||||||||
Properties owned | 97 | (2 | ) | 99 | (5 | ) | (2 | ) | (2.0 | )% | |||||||||
Square feet owned | 11,048,844 | (2 | ) | 11,083,700 | (5 | ) | (34,856 | ) | (0.3 | )% | |||||||||
Square feet leased | 97.7 | % | 98.5 | % | (0.8 | )% | (0.8 | )% |
(1) Includes a |
(2) Includes five properties classified as held for sale of |
(3) Includes a |
(4) Includes |
(5) Includes four properties classified as held for sale of |
Third Quarter Activity:
- Acquired property: Purchased one fully-occupied property consisting of 119,000 square feet for
$23.9 million at a cap rate of 8.3%; - Sold property: Sold two properties located in
Rock Falls, Illinois and one property located inAngola, Indiana for$3.0 million ; - Issued debt: Issued
$18.1 million in mortgage debt collateralized by two properties at a weighted average interest rate of 4.0%; - Repaid debt: Repaid
$12.7 million in mortgage debt maturing on three properties at an interest rate of 5.76% with borrowings under our line of credit and cash on hand; - Leased vacant space: Executed a 7-year lease for 21,000 square feet in our
Bolingbrook, Illinois property, bringing this property to 100% occupancy; - Renewed leases: Executed a 3-year lease renewal with the tenant at our
Richmond, Virginia property, a 1-year lease renewal with the tenant at ourSouth Hadley, Massachusetts property, and a 1-year lease renewal with one of the tenants in ourMaple Heights, Ohio property; - Issued preferred stock: Issued 1,230,000 shares of our 7.00% Series D Preferred Stock in a registered direct placement, raising net proceeds of
$29.7 million ; - Issued Stock under ATM Programs: Issued 617,549 shares of common stock for net proceeds of
$10.5 million , and 481,884 shares of our 7.00% Series D Preferred Stock for net proceeds of$12.0 million ; - Redeemed Series C Term Preferred Stock: Redeemed all
$13.5 million of our remaining issued and outstanding 7.125% Series C Term Preferred Stock that was originally set to mature inJanuary 2017 ; and - Paid distributions: Paid monthly cash distributions for the quarter totaling
$0.375 per share on our common stock,$0.4843749 per share on our Series A Preferred Stock,$0.4688 per share on our Series B Preferred Stock,$0.4375 per share on our Series D Preferred Stock, and$0.2625 per share on our senior common stock. Paid prorated cash distributions up to and including the date of redemption totaling$0.2424 per share on our Series C Term Preferred Stock.
Third Quarter 2016 Results: Core FFO available to common shareholders for the three months ended
Net loss attributable to common stockholders for the three months ended
Subsequent to the end of the quarter:
- Expanded property: Executed a lease amendment with the tenant at our
Vance, Alabama property to fund a$7.0 million property expansion that will add 75,000 square feet to this property along with a new 10-year lease; - Renewed lease: Executed a 5-year lease renewal with the tenant at our
Wichita, Kansas property; - Issued Stock under ATM Programs: Issued 147,150 shares of common stock for net proceeds of
$2.6 million and 137,718 shares of our 7.00% Series D Preferred Stock for net proceeds of$3.4 million ; and - Declared distributions: Declared monthly cash distributions for October, November and
December 2016 totaling$0.375 per share on our common stock,$0.4843749 per share on our Series A Preferred Stock,$0.46875 per share on our Series B Preferred Stock,$0.4375 per share on our Series D Preferred Stock and$0.2625 per share on our senior common stock.
Comments from Gladstone Commercial's President,
Conference Call:
About
About the Gladstone Companies: Information on the business activities of all the Gladstone family of funds can be found at www.gladstonecompanies.com.
Investor Relations: For Investor Relations inquiries related to any of the monthly distribution-paying Gladstone family of funds, please visit www.gladstone.com.
Non-GAAP Financial Measures:
FFO:
Core FFO: Core FFO is FFO adjusted for certain items that are not indicative of the results provided by the Company's operating portfolio and affect the comparability of the Company's period-over-period performance. These items include the adjustment for acquisition related expenses, gains or losses from early extinguishment of debt and any other non-recurring expense adjustments. Although the Company's calculation of Core FFO differs from NAREIT's definition of FFO and may not be comparable to that of other REITs, the Company believes it is a meaningful supplemental measure of its operating performance. Accordingly, Core FFO should be considered a supplement to net income computed in accordance with GAAP as a measure of our performance.
The Company's presentation of FFO, as defined by NAREIT, or presentation of Core FFO, does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of its performance or to cash flow from operations as a measure of liquidity or ability to make distributions.
The statements in this press release regarding the forecasted stability of Gladstone Commercial's income, its ability, plans or prospects to re-lease its unoccupied properties, and grow its portfolio are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on Gladstone Commercial's current plans that are believed to be reasonable as of the date of this press release. Factors that may cause actual results to differ materially from these forward-looking statements
include, but are not limited to, Gladstone Commercial's ability to raise additional capital; availability and terms of capital and financing, both to fund its operations and to refinance its indebtedness as it matures; downturns in the current economic environment; the performance of its tenants; the impact of competition on its efforts to renew existing leases or re-lease space; and significant changes in interest rates. Additional factors that could cause actual results to differ materially from those stated or implied by its forward-looking statements are disclosed under the caption "Risk factors" of its Form 10-K for the fiscal year ended
CONTACT: Gladstone Commercial Corporation +1-703-287-5893Source:
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