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Gladstone Commercial (GOOD) Renews Lease With Morgan Stanley

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Gladstone Commercial Corporation (GOOD - Free Report) is witnessing solid demand for its properties from existing as well as new tenants. Recently, the company clinched a five-year lease renewal at its office property in Columbus, OH, with the leading global financial services firm, Morgan Stanley (MS - Free Report) . 

Morgan Stanley's existing tenancy began in 2008, and this lease renewal for 72,301 square feet of the 101,869-square-foot office building at 4343 Easton Commons through Dec 31, 2030 secures GOOD’s cash flows from the property.

Per Ryan Carter, executive vice president for the Midwest and Western Regions for Gladstone Commercial, "Morgan Stanley is an excellent tenant, and we are pleased that our office building meets their requirements for continued operations within the Columbus, Ohio market."

Gladstone Commercial has been witnessing healthy leasing activity, aiding solid occupancy and healthy rental collections. The company collected 100% of cash rents during April, May and June, 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.

Gladstone Commercial recently sold its two medical office properties in the Atlanta MSA at a cap rate of 5.97%. The properties, which were leased to Northside Hospital, encompassed 26,331 square feet of space. The REIT realized a leveraged internal rate of return of around 13.2% on the properties, which were acquired as part of an eight-property portfolio transaction in 2007. The move came as part of Gladstone Commercial’s capital recycling efforts, allowing the company to redeploy capital into industrial real estate.

GOOD is also focused on expanding on the buyouts of high-quality industrial assets in strong growth corridors leased to tenants with solid credit profiles. In line with this, 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%.

Shares of this Zacks Rank #3 (Hold) company have risen 16.4% in the past six months, outperforming the industry’s increase of 8.9%.

Zacks Investment Research
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Stocks to Consider

Some better-ranked stocks from the REIT sector are Lamar Advertising Company (LAMR - Free Report) and Cousins Properties Incorporated (CUZ - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Lamar Advertising’s 2024 FFO per share has moved marginally northward in the past month to $8.08.

The Zacks Consensus Estimate for Cousins Properties’ ongoing-year FFO per share has increased marginally over the past month to $2.66.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.

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