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Gladstone Commercial (GOOD) Records High Occupancy, Collections
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Gladstone Commercial Corporation (GOOD - Free Report) recently announced its semi-annual business update regarding its portfolio performance during a time of market volatility.
GOOD, a U.S.-focused REIT known for its acumen in acquiring, owning and operating net leased industrial and office properties, collected 100% of cash base rents through Jun 30, 2024, underscoring the robustness of its tenant base. The strong occupancy rate of 98.5% as of Jun 30, 2024, is a testament to the trust tenants place in the company’s properties and management.
Between January and June 2024, the company executed or extended leases covering 2.4 million square feet with five tenants, boasting an average remaining lease term of six years. The annualized straight-line rent of these transactions aggregated $11.4 million and saw a notable 46% increase, indicating healthy demand for GOOD's properties.
In May, Gladstone Commercial acquired a 142,125-square-foot industrial manufacturing, distribution and service facility located on 115 acres in Warfordsburg, PA, for $11.7 million at a GAAP capitalization rate of 12.3%.
Moreover, GOOD’s disciplined capital-recycling strategy adds to its balance sheet strength, poising it well to capitalize on long-term growth opportunities. The company focuses on selling non-core assets and using the proceeds to de-lever its portfolio and acquire properties in its target growth markets with a focus on industrial investment opportunities.
During the period, GOOD continued with its office property dispositions, selling a 114,786 square foot office building in Columbus, OH, an 86,409 square foot office building in Draper, UT, a 155,984 square foot office building in Richardson, TX, and a 29,257 square foot office building in Egg Harbor, NJ.
As of Jun 30, 2024, GOOD had a healthy liquidity position of approximately $48.8 million through its revolving credit facility and cash on hand.
For investors, the high cash base rent collection, significant leasing activity, strategic acquisitions and a solid liquidity position are indicators of a sound business model and competent management, making Gladstone Commercial a viable investment opportunity within the REIT space.
However, it is worth noting that in a volatile and persistently high interest rate environment and geopolitical concerns, customers remain focused on cost controls and delaying their decisions with respect to leasing in the industrial and office real estate market. Amid this, net absorption in the forthcoming quarters is likely to be affected, while leasing is expected to stay competitive in a few of the larger, higher-rent markets.
Shares of this Zacks Rank #5 (Strong Sell) company have risen 8.3% in the past three months compared with the industry’s increase of 3.7%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Iron Mountain Incorporated (IRM - Free Report) and Americold Realty Trust, Inc. (COLD - Free Report) . While Americold Realty sports a Zacks Rank #1 (Strong Buy), Iron Mountain has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Iron Mountain’s 2024 FFO per share of $4.45 indicates an 8% increase year over year.
The Zacks Consensus Estimate for Americold’s 2024 FFO per share is pegged at $1.44, which suggests 13.4% year-over-year growth.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Gladstone Commercial (GOOD) Records High Occupancy, Collections
Gladstone Commercial Corporation (GOOD - Free Report) recently announced its semi-annual business update regarding its portfolio performance during a time of market volatility.
GOOD, a U.S.-focused REIT known for its acumen in acquiring, owning and operating net leased industrial and office properties, collected 100% of cash base rents through Jun 30, 2024, underscoring the robustness of its tenant base. The strong occupancy rate of 98.5% as of Jun 30, 2024, is a testament to the trust tenants place in the company’s properties and management.
Between January and June 2024, the company executed or extended leases covering 2.4 million square feet with five tenants, boasting an average remaining lease term of six years. The annualized straight-line rent of these transactions aggregated $11.4 million and saw a notable 46% increase, indicating healthy demand for GOOD's properties.
In May, Gladstone Commercial acquired a 142,125-square-foot industrial manufacturing, distribution and service facility located on 115 acres in Warfordsburg, PA, for $11.7 million at a GAAP capitalization rate of 12.3%.
Moreover, GOOD’s disciplined capital-recycling strategy adds to its balance sheet strength, poising it well to capitalize on long-term growth opportunities. The company focuses on selling non-core assets and using the proceeds to de-lever its portfolio and acquire properties in its target growth markets with a focus on industrial investment opportunities.
During the period, GOOD continued with its office property dispositions, selling a 114,786 square foot office building in Columbus, OH, an 86,409 square foot office building in Draper, UT, a 155,984 square foot office building in Richardson, TX, and a 29,257 square foot office building in Egg Harbor, NJ.
As of Jun 30, 2024, GOOD had a healthy liquidity position of approximately $48.8 million through its revolving credit facility and cash on hand.
For investors, the high cash base rent collection, significant leasing activity, strategic acquisitions and a solid liquidity position are indicators of a sound business model and competent management, making Gladstone Commercial a viable investment opportunity within the REIT space.
However, it is worth noting that in a volatile and persistently high interest rate environment and geopolitical concerns, customers remain focused on cost controls and delaying their decisions with respect to leasing in the industrial and office real estate market. Amid this, net absorption in the forthcoming quarters is likely to be affected, while leasing is expected to stay competitive in a few of the larger, higher-rent markets.
Shares of this Zacks Rank #5 (Strong Sell) company have risen 8.3% in the past three months compared with the industry’s increase of 3.7%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Iron Mountain Incorporated (IRM - Free Report) and Americold Realty Trust, Inc. (COLD - Free Report) . While Americold Realty sports a Zacks Rank #1 (Strong Buy), Iron Mountain has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Iron Mountain’s 2024 FFO per share of $4.45 indicates an 8% increase year over year.
The Zacks Consensus Estimate for Americold’s 2024 FFO per share is pegged at $1.44, which suggests 13.4% year-over-year growth.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.