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Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:30 a.m. ET Chairman - David Gladstone Director of Investor Relations - Catherine Gerkis Chief Executive Officer and President - Arthur Cooper Chief Financial Officer - Gary Gerson Operator: Greetings, and welcome to the Gladstone Commercial Corporation Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to Chairman, David Gladstone. Thank you. You may begin. David Gladstone: Well, thank you, [ Kristen ]. That was a nice introduction, and thank all of you for calling in today. We really do enjoy this time with you guys, and I hope you have a lot of questions for us today. Now we'll hear from Catherine Gerkis. She's our Director of Investor Relations, and she's got a brief disclosure to read to you regarding certain regulatory matters concerning all of these calls and things that we're doing today. Catherine, go ahead. Catherine Gerkis: Thanks, David, and good morning, all. Today's call may include forward-looking statements, which are based on management's estimates, assumptions and projections. There are no guarantees of future performance, and actual results may differ materially from those expressed or implied in these statements due to various uncertainties, including the risk factors set forth in our SEC filings, which you can find on the Investors page of our website, gladstonecommercial.com. We assume no obligation to update any of these statements unless required by law. Please visit our website for a copy of our Form 10-Q and earnings press release for more detailed information. You can also sign up for our e-mail notification service and find information on how to contact our Investor Relations department. We are also on X @GladstoneComps as well as Facebook and LinkedIn. The keyword for both is The Gladstone Companies. Today, we'll discuss FFO, which is funds from operations, a non-GAAP accounting term defined as net income, excluding the gains or losses from the sale of real estate and any impairment losses on property plus depreciation and amortization of real estate assets. We may also discuss core FFO, which is generally FFO adjusted for certain other nonrecurring revenues and expenses. We believe these metrics can be a better indication of our operating results and allow better comparability of our period-over-period performance. Now let's turn the presentation to Buzz Cooper, Gladstone Commercial's CEO and President. Arthur Cooper: Thank you, Catherine, and thank you all for joining today's call. We are pleased to update you on our results for the quarter ended June 30, 2026, our current portfolio and our future outlook. Before I turn to our results, I'll comment briefly on the market. Starting with the broader market, industrial conditions continued to improve during the quarter. According to Cushman & Wakefield, net absorption rose 21% from the prior quarter to 62.1 million square feet. This brings year-to-date net absorption to 113.6 million square feet, the strongest total since 2023. National vacancy declined 10 basis points to 6.9%, which Cushman views as a sign the market has passed the peak of this cycle and asking rents rose 2.9% year-over-year. Demand remains concentrated in modern large-format buildings supported by onshoring, nearshoring and ongoing supply chain optimization. New construction deliveries remain below last year's pace. And while the development pipeline has begun to grow again, roughly 1/3 of it are build-to-suits, which keep speculative supply in check. The overall health of the industrial market remains continued competition for assets of all sizes, particularly those assets that are well located and mission-critical. Turning to our results during the quarter. We acquired 153,890 square foot industrial property in Newport News, Virginia leased to Huntington Ingalls Industries for $22.75 million. This facility supports Huntington's Newport News shipbuilding operation, and we funded the purchase with internally generated cash flow without issuing equity. We sold a 161,458 square foot industrial building in Monroe, North Carolina to the tenant ASSA ABLOY. We acquired this asset in 2021. Over the term of our hold period, the property was 100% occupied and the sale represents a gain on equity and a highly accretive cap rate. This acquisition and sale together illustrate our ability to generate equity and redeploy proceeds into mission-critical industrial assets. The Newport News acquisition represents nearly double the cash and straight-line rents from our North Carolina assets. We were able to achieve this growth without issuing new shares during a period when our common stock price was not attractive for new issuances. Furthermore, we increased portfolio WALT and added another mission-critical location at a great basis. With respect to our existing portfolio, we renewed or leased over 126,000 square feet of office, retail and over 34,000 square feet of industrial with an increase in straight-line rent of $169,500 annually purchased a land parcel adjacent to our Clintonville, Wisconsin facility and simultaneously entered into a lease amendment in which we provide the funding for an approximate expansion of 86,000 square feet and significant improvements to the existing 521,000 square foot facility. The completion of these improvements is expected to be in the second quarter of 2027. The lease will commence with a new 15-year term. Also, we've collected 100% of the cash-based rents in this period and this month. Subsequent, we leased 82,000 square feet or the second floor at our Austin, Texas office property. We also acquired 146,650 square foot industrial property in Red Bud, Illinois for $6.5 million. As it relates to the Austin property and other office properties within our portfolio, we acknowledge that office leasing and re-leasing requires CapEx dollars. When office buildings are as mission-critical and well located as those in our portfolio, we are able to minimize those dollars such that we receive an accretive return on our investment. When we evaluate any office re-leasing, we review payback period, IRR and ROI as well as alternative of selling the property. We acknowledge that the returns are generally not as attractive to us as industrial properties but they keep a constant stream of cash flow for our shareholders. We are not looking to grow our office portfolio, but until capital markets return fully, capital expenditures are typically more accretive and revenue generating than choosing to sell the asset. Again, we evaluate each opportunity on a case-by-case basis, and we target payback periods between 6 and 9 months. Through the efforts of our asset management team, as of June 30, 2026, the portfolio was 98.7% occupied, and the WALT on that portfolio is over 7.1 years. These transactions bring our industrial concentration to 69% of annualized straight-line rent as we continue working toward our near-term goal of 70%. Each of these milestones is a testament to the mission-critical nature of the assets in our portfolio, the quality of tenant credit in our portfolio and our underwriting capabilities. As evidenced by our execution during and subsequent to the second quarter, we remain steadfast in several key focus areas, growing our industrial concentration, adding value in our existing portfolio through renewals, extension and strategic capital investments and disposing of noncore assets and strategically redeploying those proceeds into quality industrial assets. By continuing to execute on these focus areas, we expect to, again, increase our WALT, maintain strong occupancy rates, increase straight-line rent growth across the portfolio and decreased cost of capital. Looking ahead into the second half of 2026, we remain focused on evaluating opportunities to acquire high-quality industrial assets that are mission-critical to tenants and industries and accretive to our long-term strategy. We are working toward our near-term goal of 70% industrial annualized straight-line rents. We will look to achieve this goal and push past it during the year. While we do not have a timeline for the disposition of our office portfolio, we are keenly focused on growing the industrial concentration of all of the overall portfolio. At the same time, we will continue to work with our existing tenants to extend leases, capture mark-to-market opportunities and support tenant growth through tenant expansions, capital improvement initiatives and build-to-suit opportunities. While we remain aware of the challenging office environment, we will be strategic and intentional in evaluating our specific portfolio, seeking opportune times to dispose of office and noncore industrial as part of our continued capital recycling efforts. With the availability via our increased line of credit, access to private placement bond market, cash on hand and the ability to raise equity at our ATM, although presently, we believe our current stock price does not reflect the quality of our portfolio, tenant credit or overall shareholder returns, we are positioned to deploy capital into accretive industrial acquisitions and portfolio improvements. In closing, the team executed well in the first half of the year, and we are focused on continuing that momentum through the remainder of 2026. I will now turn the call over to Gary Gerson to review our financial results for the quarter and liquidity position. Gary Gerson: Thank you, Buzz. I'll start my remarks regarding our financial results this morning by reviewing our operating results for the second quarter of 2026. All per share numbers referenced are based on fully diluted weighted average common shares. FFO and core FFO per share available to common stockholders were both $0.38 per share, respectively, for the quarter. FFO and core FFO available to common stockholders during the same period in 2025 were $0.33 and $0.35, respectively. FFO and core FFO per share for the 6 months ended June 30, 2026, were both $0.72. FFO and core FFO for the same period in 2025 was $0.67 and $0.69 per share, respectively. Same-store lease revenue increased by 1.2% in the 6 months ended June 30, 2026, over the same period in 2025 due to an increase in recovery revenue from property expenses and an increase in rental rates from leasing activity subsequent to the 6 months ended June 30, 2025. Our second quarter results reflected total operating revenues of $44 million with operating expenses of $26.2 million as compared to operating revenues of $39.5 million and operating expenses of $25.1 million for the same period in 2025. Operating revenues were higher in 2026 due to an increased portfolio size, increased recovery revenues, higher rental rates and a onetime termination fee recognized in relation to the sale of a property. Expenses were higher in the second quarter of 2026 versus the same period in 2025, mainly due to higher depreciation from a larger portfolio and the payment of the majority of the incentive fee in the second quarter of 2026. At the end of the quarter, we had no properties held for sale. As of today, we have $17.7 million of loan maturities in 2026 and $51.9 million of loan maturities through the second quarter of 2027. As of the end of the quarter, we had $51.57 million of revolver borrowings outstanding. Looking at our debt profile, as of June 30, 47% was fixed rate, 47% was hedged floating rate and 6% was floating rate, which is the amount drawn on our revolving credit facility. As of June 30, our effective average SOFR was 3.68%. Our outstanding bank term loans are all hedged to maturity with interest rate swaps. We continue to monitor interest rates closely and update our hedging strategy as needed. During the 6 months ended June 30, 2026, we did not sell any shares of common stock under our ATM. We continue to manage our equity activity to ensure that we have sufficient liquidity for all upcoming capital requirements and new acquisitions. As of today, we have approximately $8.4 million in cash and $68.8 million of availability under our line of credit. We encourage you to review our quarterly financial supplement posted on our website, which provides more detailed financial and portfolio information for the quarter. Our common stock dividend is $0.30 per share per quarter or $1.20 per year. And now I'll turn the program back to David. David Gladstone: Well, that was a good report, Gary, and a good one from Buzz and Catherine. The team has performed very well. Overall, again, a very nice quarter. You've heard a lot today in summary, during the second quarter of '26, we acquired 153,000 square foot industrial property in Newport News using proceeds from the sale of an industrial property in Monroe, North Carolina, and that resulted in increase in the straight-line rent and FFO per share. We renewed a lease for 34,000 square feet at an industrial property and 126,000 square feet in office and retail. Again, the company just continues to go along making more money. Subsequent to the end of the quarter, we acquired 146,000 square foot industrial property in Red Bud, Illinois and that was for $6.55 million. So a small one, but again, just adds to the ability to pay more dividends. Now paying about $1.20 per share per year. It's 9.8% yield. That's a great yield for such solid company like this. Gladstone's commercial team is growing the real estate we own at a good pace. And the team is doing a great job of managing the properties we own, especially during some of these challenging times that comes up. Our team of strong professionals continues to pursue quality properties on the list of acquisitions. They are reevaluating what we own in order to get us closer to all properties that are for -- projects that are critical to some of the tenants that we have. Our acquisition team is seeking strong credit tenants, and we are getting that done very well. Okay. Let's just stop here for a while and get some questions from our listeners. So operator, if you come on and ask some questions for us. Operator: [Operator Instructions]Our first question comes from the line of Rob Stevenson with [ Huntington ]. Robert Stevenson: I think Gary said that there was no properties held for sale. How are you guys thinking about funding future transactions given the commentary also about how undervalued the stock price is? Gary Gerson: Well, Rob, I mean, we did a redeployment this last time around. We had a sale and then we redeployed the assets into a new property. We intend to do that going forward. If we have a potential acquisition that is accretive at the stock price, wherever we are, we would consider selling stock at that price to make that acquisition. But right now, I mean, it's a little tough, but we continue to grow, and we're going to invest more into our existing properties as a way to increase our revenues and capital deployment. Robert Stevenson: Okay. And at this point, do you think that you guys have any excess preferred capacity to be able to do any issuance there versus the common? Gary Gerson: We're really not considering doing any more preferred at this time. Robert Stevenson: Okay. And then you guys have done a good job of maintaining the occupancy level in the portfolio. But can you talk about some of the current vacancy? Are you in process on some of that in terms of signed but not commenced leases? Are you getting close to some new tenants in some places? How should we be thinking about where some of that, I guess, 1.3% of vacancy goes over the next 4 quarters or so? Arthur Cooper: Sure, Rob. Thank you. And as I've mentioned in the past, our portfolio management and asset management team does a great job staying on top of our tenancies, both obviously occupied, unoccupied and the historical occupancy that we've maintained over the last several years, it's got to be one of the top in the marketplace. So yes, we are actively engaged with everything within the next 24 months. As I mentioned, with the added space taken down in Austin. Our office occupancy is going to be north of 95% here going forward for a period of time. Our industrial is 99.8%, which we do have lease there that will bring it to 100% occupancy at the end of the year. In remainder of '26, we've got 4 properties that we are working on as it relates to upping tenancy, if you will. And all of those have RFPs or documentation that we are negotiating out. And secondly, going into '27, we have 11%. Again, all have been addressed in conversations with paper going in some cases, back and forth, whether it's an RFP, whether it is nits within a lease. So we feel very confident of those, I see one, and it is an office building that I have concern over, but I believe that we will get something done there before the maturity at the end of 2027. So I appreciate that question, but we are ahead of the curve as it relates to those properties. And I believe we will maintain a high occupancy going forward. Operator: Our next question comes from the line of Craig Kucera with Lucid Capital Markets. Craig Kucera: You made mention that there was a termination fee recognized on the North Carolina disposition sold during the quarter. Can you give us a sense of how much that termination fee was? Gary Gerson: I believe that was $1.9 million. Craig Kucera: Okay. That's helpful. And then I think you have in the Q, there's an additional $1.6 million of what you refer to as accelerated rent. None of it's been recognized. When do you expect to recognize that? Gary Gerson: Over a period of time, this is a termination and this will be through, I think, the mid of next year. So this won't be -- yes, I'm sorry, this is through '29. So this won't be -- because of the straight-line rent requirements, this won't be something you'll see in a block. This will be a small amount every month for a couple of years. Craig Kucera: Okay. That's helpful. And given the leasing at the Austin asset this quarter, what does that bring occupancy to at that building? Does that bring it up closer to 60% or 70%? Arthur Cooper: Well, the occupancy currently is at 69%, but this is going to bring it north of 90%. Craig Kucera: Okay. Perfect. And just given your commentary about capital, the Austin asset that has been out there for a while, it sounds like that's not one that you're looking to sell that you're expecting based on your leasing commentary that, that will be renewed? Arthur Cooper: We are looking at all opportunities there, whether it be, again, additional tenancy or sale, but we also are looking to get good value out of it. It has been a good asset for us, obviously, troubling with the vacancy within it during COVID, but we will entertain offers, and we are exploring quietly in the marketplace. Craig Kucera: Okay. That's helpful. And obviously, your cost of capital is a little bit high to do a lot with equity right now, but I'm curious sort of what you're screening as far as your investment pipeline right now and what you're seeing in the marketplace? Arthur Cooper: We have one deal that we have an LOI out on for approximately $32 million. We should hear about that transaction here in the next few weeks. We, of course, always are evaluating the marketplace. We've got 15 that we currently are digging into their financials upon and looking to see if the property makes sense for us. So we've got a healthy pipeline and having just closed that one deal here subsequent to the end of the quarter. Obviously, we look to backfill that, make it stronger. But we will evaluate, as we always have, making sure that these are accretive transactions. Operator: Our next question comes from the line of Dave Storms with Stonegate Capital. David Storms: Sticking with the acquisition pipeline, we're going to get my head maybe around the cap rates in the industrial market. It looks like Newport was high 6s, Red Bud, low 9s. Obviously, there's some variance between those 2 properties. But just any of the puts and takes that we should be thinking about to maybe get a better view on cap rates? Arthur Cooper: Sure. And as you know, Dave, we are not able to compete down in the 6s at this point in time, although we are -- as we sell noncore assets, able to take the cash from those sales, put them into new deals, obviously, it doesn't cost us to raise that money. So it makes the transaction more accretive for us. But the cap rates that we're seeing are going to be 7.5% north. That 9% that you referenced was an average as it relates over the term of the lease, longer the term, the better for us. So we are looking at transactions that have a cap rate going in the door approximately 7.5%, looking to get to averages north of 9%. David Storms: Understood. Very helpful. It also looked like tenant improvements, existing real estate maybe came in a little bit lower. I know you mentioned this in your prepared remarks. Is that mostly a timing thing there? Or is there anything else we should read into that? Arthur Cooper: I don't believe there's anything else you would read into that. Yes, it is a matter of timing. And as I mentioned, we look to try to -- we're not going to spend money that's not going to be accretive to us at the end of the day. We look to have a payback period on our tenant improvements as a general rule of between 6 to 9 months. We want to make sure those dollars are obviously recaptured because we want to be cognizant. And again, tenancy and cash flow is important. David Storms: Understood. And then maybe just last one on the land purchase. If I remember right, that was right next to an existing property. Is that the kind of profile that you're looking for in land purchases? Or are there other variables that you try to keep in mind there? Arthur Cooper: That property, the purchase was, again, for the expansion. It will come along at the end of the day with a 15-year lease. The average cap rate on that transaction is north of 9.5%. I'm not sure because I got a little garbled there exactly if I hit all of your question, but that is a very opportune purchase for us. We'll build it out here and hope to have that completed by second quarter of next year. Operator: Our next question comes from the line of Gaurav Mehta with Alliance Global Partners. Gaurav Mehta: I wanted to ask you on the industrial asset that you guys decided to sell. I just want to get some more color on why you sold that asset. And are there any more industrial assets in your portfolio that you may look to sell? Arthur Cooper: We had that asset. We purchased it in 2021, Gaurav. The reason for the sale is the tenant came to us with a very profitable number, and we were able to redeploy those assets into the Huntington transaction that doubled the straight-line rent and the current rent. So it made all the sense in the world, and we didn't have to raise equity to do the transaction. Gaurav Mehta: Any more industrial properties in your portfolio that you could look to sell to redeploy that into other industrial assets? Arthur Cooper: We have certainly within our portfolio, some of the leases carry a purchase option. I don't have any at the moment that I would classify that are going to happen any time imminently. But are there a few out there that could happen? Yes, but nothing that I have today, although certainly, we are looking at some to see if we could sell them at economics that make sense, we would. Operator: Our next question comes from the line of John Massocca with B. Riley. John Massocca: Technical one. If I think about the accelerated rent versus the lease termination fee and understanding those are separate things. Is there a GAAP impact from that accelerated rent as well? Or is that like even like the top line impact of that will be kind of over time? I'm just trying to determine if the cash and GAAP -- like different kind of cash and GAAP kind of impact from the accelerated rent. And I'm assuming that is when we can all hit in the current quarter. Gary Gerson: Yes. The termination fee was a onetime hit in the quarter. The accelerated rent, and you can call that, it's a variation on the same theme. This will be -- this will have a GAAP effect. It will be -- you take the amount of that termination fee, divide it by the total amount of months that you have left on your lease and then you straight line it through. So yes, it will have a small GAAP impact. It's not a significant amount. John Massocca: But the $1.9 million... Gary Gerson: The cash has already been received. John Massocca: The $1.9 million, though, was all impacting in 2Q, correct? Gary Gerson: Yes, correct. John Massocca: And then apologies if I missed this earlier in the call, I kind of was cutting in and out. The leasing activity, can you maybe provide a little color on where kind of rents moved for kind of all the leasing activity you discussed and if there is any kind of significant CapEx associated with any of those leases? Arthur Cooper: As I mentioned, we look for the CapEx to get a payback on that, obviously, as quickly as we can, and we try to keep that CapEx and lease commissions as low as we can. On average, we see a payback of between 6 to 9 months. The approximately $200,000 that we had in leases that were renewed as a plus up prior to the end of the quarter is an average across the portfolio of the leases that we renewed. We always look to do what we can to, I hate to put it this way, get as much as we can. And the market is improving, as referenced in my remarks, that lease rates are going up. So we are very cognizant of the CapEx dollars needed, but I'd rather have the property occupied and paying and creating cash flow for us versus obviously vacancy. John Massocca: Okay. And then I guess as we look out on the kind of future lease expiration schedule maybe out over the next 2 years, where do those assets maybe sit versus kind of market roughly? -- exact numbers, just kind of up or down? Arthur Cooper: They are all positioned and with the numbers that we are discussing with the tenancies, they are all -- gee, except maybe 2 are up. So we've got 15 between this year and next year that we're looking at, 2 of which are going to go vacant. We have had tours within the buildings. So I feel confident that at the end of the day, the net-net, it's going to be a plus up. And again, I have one office building down in Florida that we are working on, and that does not mature until September '27. So I don't want to say we have time, we are aggressively addressing it. But I do worry about that one. And it's not a large property. It's approximately 80,000 square feet within the portfolio, but we're going to do what we can to keep these buildings occupied and/or sold. Operator: Our next question comes from the line of [ Francois Swanepoel ], a private investor. Unknown Attendee: I would like to ask about if you could clarify our current payout ratio. What is our current payout ratio with the dividend at $0.10 a month? Gary Gerson: It's in the -- we get this for you. It is in the low 80s. Actually, it was what, 79%, I think, this time around, hold on. I believe it was -- our payout ratio is just under 80% this last quarter, yes. Unknown Attendee: Yes. So my question on that is, as a REIT, shouldn't we be keeping that as a percentage of profit at closer to 90% to keep us at... Gary Gerson: As a triple net, we typically are paying more than a non-triple net as far as a distribution ratio of dividends over to FFO. But we would like to maintain more internal cash flow. And you see the triple nets are probably in the low -- the mid-70s to low 80s as a general group. We would like to kind of get our distribution ratio a little lower. It's better for the shareholders in the long run as we can redeploy the capital into our portfolio and grow the portfolio and earnings over time. So then eventually, we can then increase the dividend. But if you can maintain -- if you look at some of the bigger REITs, their yields and they have a much lower distribution than we -- so over time, if you can do that, you can reinvest those proceeds or that cash into new properties without having to sell new equity and thus potentially dilute the shareholders. Unknown Attendee: I understand that. I understand that. My question on that is according to the IRS rule, what's the rule of keeping that at 90% for us to qualify -- corporation to not pay high taxes on that income? Gary Gerson: Yes, that's a 90% of taxable income, not of GAAP income. So we probably pay out probably, in many cases, way above the 90% required to maintain REIT status. So we're definitely doing that. Oh yes, absolutely. We will not lose our REIT status there. Unknown Attendee: Okay. Will the annual increases in rent, if they are implemented and when they are implemented, I'm not sure when you guys implement annual increases on rent. But will that be able -- will we be able to use those proceeds to maybe look at an increase in the dividend? Gary Gerson: We'll certainly consider it, but that's something to look at in the future. David Gladstone: Do we have any additional questions -- any questions? Operator: We have no more questions at this time. Mr. Gladstone, I'd like to turn the floor back to you for closing comments. David Gladstone: Well, thank you very much, everybody, for listening to this, and we appreciate the questions. Hope you have a lot more questions next quarter. And that's the end of this. So thank you again. Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day. Before you buy stock in Gladstone Commercial, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Gladstone Commercial wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Gladstone Commercial (GOOD) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed performance gains to the successful execution of a capital recycling strategy, specifically selling a North Carolina asset to fund a mission-critical acquisition in Virginia without issuing equity. The industrial market is viewed as having passed its cyclical peak, with demand concentrated in modern, large-format buildings driven by onshoring and supply chain optimization. Strategic focus remains on increasing industrial concentration toward a near-term goal of 70% of annualized straight-line rent, up from the current 69%. Office assets are being managed for cash flow stability rather than growth, with management prioritizing accretive capital expenditures over immediate sales in the current capital market environment. Portfolio occupancy remains high at 98.7%, which management credits to the mission-critical nature of their assets and proactive tenant relationship management. The company is utilizing internally generated cash flow and credit facilities for acquisitions to avoid diluting shareholders while the stock price remains at unattractive levels. Management expects to complete a 86,000 square foot expansion in Wisconsin by Q2 2027, which will trigger a new 15-year lease term at a projected average cap rate north of 9.5%. The acquisition pipeline is described as healthy, with one $32 million deal under letter of intent and 15 additional properties currently undergoing financial evaluation. Future office re-leasing efforts will target specific financial hurdles, including payback periods between 6 and 9 months to ensure accretive returns on investment. Management intends to continue recycling capital by disposing of non-core assets and redeploying proceeds into industrial properties to improve the portfolio's Weighted Average Lease Term (WALT). The company plans to maintain its current dividend level while aiming to lower the distribution ratio over time to increase internal cash flow for reinvestment. A one-time lease termination fee of $1.9 million was recognized in Q2 2026 related to a property sale, contributing to the year-over-year FFO increase. Approximately $1.6 million in accelerated rent will be recognized as GAAP income through 2029, though the cash has already been received. Management identified one specific 80,000 square foot office building in Florida as a potential vacancy risk ahead of its September 2027 lease maturity. The debt profile is heavily protected against interest rate volatility, with 94% of debt being either fixed-rate or hedged floating-rate. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management emphasized a preference for capital recycling and redeploying proceeds from sales into new properties rather than issuing common equity at current prices. The company is not currently considering the issuance of additional preferred stock as a capital source. Management noted they cannot compete for assets with cap rates in the 6% range using new capital, but can make such deals work through recycling cash from non-core sales. Current acquisition targets focus on properties with going-in cap rates around 7.5% and average cap rates exceeding 9% over the lease term. Industrial occupancy is expected to reach 100% by year-end, while office occupancy is projected to rise north of 95% following recent leasing activity in Austin. Of the 15 leases expiring through 2027, management expects most to result in positive rent spreads, with only two properties currently projected to go vacant. The current payout ratio is just under 80% of FFO; management aims to lower this over time to retain more cash for internal growth. Management clarified that the 90% distribution requirement for REIT status applies to taxable income, not GAAP income, and they remain well above the required threshold.

This article first appeared on GuruFocus. FFO per Share (Q2 2026): $0.38, up from $0.33 in Q2 2025. Core FFO per Share (Q2 2026): $0.38, up from $0.35 in Q2 2025. FFO per Share (Six Months Ended June 30, 2026): $0.72, up from $0.67 in the prior-year period. Core FFO per Share (Six Months Ended June 30, 2026): $0.72, up from $0.69 in the prior-year period. Total Operating Revenues (Q2 2026): $44.0 million, compared to $39.5 million in Q2 2025. Operating Expenses (Q2 2026): $26.2 million, compared to $25.1 million in Q2 2025. Same-Store Lease Revenue Growth: Increased 1.2% in the six months ended June 30, 2026. Portfolio Occupancy: 98.7% as of June 30, 2026. Portfolio WALT: Over 7.1 years as of June 30, 2026. Industrial Concentration: 69% of annualized straight-line rent. Common Stock Dividend: $0.30 per share per quarter, or $1.20 per year. Warning! GuruFocus has detected 8 Warning Signs with GOOD. Is GOOD fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. FFO and Core FFO per share increased to $0.38 in Q2 2026 from $0.33 and $0.35, respectively, in Q2 2025. Portfolio occupancy remained high at 98.7%, with industrial occupancy at 99.8% and a WALT of over 7.1 years. Strategic capital recycling: sold a North Carolina industrial asset and redeployed proceeds into a higher-rent Newport News property, doubling straight-line rent without issuing equity. Industrial concentration increased to 69% of annualized straight-line rent, nearing the 70% target. Collected 100% of cash base rents during the quarter and month, demonstrating strong tenant payment performance. Leased 82,000 sq ft at the Austin office property, boosting occupancy to over 90% and improving cash flow. Executed a lease amendment for a 15-year term with a tenant expansion in Clintonville, Wisconsin, enhancing long-term income. Stock price remains undervalued, limiting the ability to issue equity for acquisitions at attractive prices. Office portfolio continues to face challenges, requiring CapEx for leasing and re-leasing, with returns less attractive than industrial assets. A $1.9 million termination fee was recognized in Q2, indicating a tenant vacated, and additional accelerated rent will be recognized over time. Payout ratio is just under 80%, which is lower than the typical REIT distribution, potentially limiting dividend growth in the near term. The company has significant debt maturities upcoming: $17.7 million in 2026 and $51.9 million through Q2 2027, requiring careful liquidity management. One office property in Florida is a concern for lease maturity in 2027, with potential vacancy risk. Q: How are you thinking about funding future transactions, given the commentary about how undervalued the stock price is?A: Gary Gerson (CFO) stated that the company intends to continue its strategy of redeploying proceeds from asset sales into new acquisitions, as demonstrated by the recent sale of a North Carolina property and the purchase of a Newport News asset. While they would consider issuing equity for an accretive acquisition, the current stock price makes it challenging. Therefore, they are focusing on investing in existing properties to increase revenues and capital deployment. Q: Can you provide some color on the current vacancy and how the 1.3% vacancy might be filled over the next four quarters?A: Buzz Cooper (CEO) explained that the portfolio management team is actively engaged with all tenancies expiring within the next 24 months. Following the recent lease-up in Austin, office occupancy is expected to be north of 95%, and industrial occupancy is at 99.8%, with one lease set to bring it to 100% by year-end. For the remainder of 2026, there are four properties with active negotiations, and for 2027, there are 11, all of which have documentation or RFPs in progress. He expressed confidence in maintaining high occupancy, though he noted one office building in Florida is a concern, but he believes a deal will be completed before its maturity in late 2027. Q: What is the current payout ratio, and shouldn't it be closer to 90% to maintain REIT status?A: Gary Gerson (CFO) clarified that the payout ratio is just under 80% of FFO. He explained that the 90% requirement applies to taxable income, not GAAP income, and the company is paying out well above the required level to maintain its REIT status. He noted that triple-net REITs typically have payout ratios in the mid-70s to low 80s, and the company prefers to retain more cash to redeploy into the portfolio and grow earnings over time, which could eventually lead to dividend increases. Q: Can you give us a sense of the cap rates in the industrial market and the variance between recent acquisitions?A: Buzz Cooper (CEO) stated that the company cannot compete at cap rates in the high sixes. By selling non-core assets and redeploying cash, they can make transactions more accretive. The cap rates they are seeing are 7.5% and north, with the 9% rate on the Red Bud acquisition being an average over the lease term. They are targeting transactions with an initial cap rate of approximately 7.5%, aiming for averages north of 9%. Q: Why did you sell the industrial asset in North Carolina, and are there more industrial assets you may look to sell?A: Buzz Cooper (CEO) explained that the tenant, ASSA ABLOY, came to them with a very profitable offer. The proceeds were redeployed into the Huntington Ingalls acquisition, which doubled the straight-line and current rent without needing to raise equity. While there are no imminent sales planned, some leases in the portfolio carry purchase options, and they are always evaluating opportunities to sell assets at economics that make sense to redeploy into better opportunities. Q: What does the recent leasing at the Austin asset bring occupancy to, and are you looking to sell it?A: Buzz Cooper (CEO) stated that the lease of 82,000 square feet brings the Austin property's occupancy to north of 90%, up from 69%. While they are exploring all opportunities, including a potential sale, they are quietly marketing the property to get good value. The asset has been good for the company, and they will entertain offers while also considering additional tenancy. Q: Can you provide more color on the $1.9 million termination fee and the $1.6 million of accelerated rent?A: Gary Gerson (CFO) confirmed that the $1.9 million termination fee was a one-time item that hit in the current quarter. The $1.6 million of accelerated rent is a variation on the same theme and will be recognized over time through 2029 due to straight-line rent requirements. It will have a small GAAP impact each month rather than appearing as a lump sum. Q: What is the current state of the acquisition pipeline, and what are you seeing in the marketplace?A: Buzz Cooper (CEO) revealed that they have one deal under a letter of intent for approximately $32 million, with a decision expected in the next few weeks. They are also evaluating 15 other properties, digging into their financials to see if they make sense. The pipeline is healthy, and they will continue to ensure any transactions are accretive. Q: Can you provide some color on where rents moved for the leasing activity and any significant CapEx associated with those leases?A: Buzz Cooper (CEO) stated that the company targets a payback period of six to nine months on tenant improvements and lease commissions. The approximately $200,000 in renewed leases represents a plus-up across the portfolio. He emphasized that the market is improving with lease rates going up, and they are cognizant of CapEx dollars but prefer to have properties occupied and generating cash flow versus vacancy. Q: How do the future lease expirations over the next two years sit versus market rates?A: Buzz Cooper (CEO) stated that all but two of the 15 leases expiring between this year and next year are positioned to be renewed at rates above current market. He noted that two properties are expected to go vacant, but they have had tours within the buildings and feel confident that the net-net result will be a plus-up. He highlighted one office building in Florida that matures in September 2027, which they are aggressively addressing to either lease or sell. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Gladstone Commercial Corporation? Here are five stocks we like better. FFO increased: Second-quarter FFO and Core FFO each rose to $0.38 per share, up from $0.33 and $0.35, respectively, a year earlier. Revenue also increased to $44 million from $39.5 million. Industrial portfolio expansion continued: Gladstone acquired a $22.75 million industrial property in Virginia and sold a North Carolina facility, raising industrial properties to 69% of annualized straight-line rent—near its 70% target. A subsequent $6.5 million Illinois acquisition further advanced the strategy. Occupancy and balance sheet remained solid: Portfolio occupancy was 98.7%, with industrial occupancy at 99.8%, while the company renewed or leased more than 160,000 square feet during the quarter. The quarterly dividend remained $0.30 per share, and nearly all debt was fixed-rate or hedged floating-rate. Gladstone Commercial (NASDAQ:GOOD) reported higher funds from operations and continued to shift its portfolio toward industrial properties during the second quarter of 2026, supported by acquisitions, asset sales and leasing activity. Funds from operations, or FFO, and Core FFO available to common stockholders were each $0.38 per share for the quarter ended June 30, up from $0.33 and $0.35 per share, respectively, in the prior-year period. For the first six months of 2026, FFO and Core FFO were both $0.72 per share, compared with $0.67 and $0.69 per share, respectively, a year earlier. → 3 Drone Stocks That Should Soar After the Summer Slump “The team executed well in the first half of the year, and we are focused on continuing that momentum through the remainder of 2026,” CEO and President Buzz Cooper said on the company’s earnings call. During the quarter, Gladstone Commercial acquired a 153,890-square-foot industrial property in Newport News, Virginia, for $22.75 million. The facility is leased to Huntington Ingalls Industries and supports the tenant’s Newport News shipbuilding operations. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth The company funded the acquisition with internally generated cash flow and did not issue equity, Cooper said. Gladstone also sold a 161,458-square-foot industrial building in Monroe, North Carolina, to its tenant, ASSA ABLOY. The company acquired that asset in 2021, and Cooper said it remained fully occupied throughout Gladstone’s ownership. According to management, the Newport News acquisition produces nearly twice the cash and straight-line rent of the North Carolina property that was sold. The transaction also increased the portfolio’s weighted average lease term, or WALT. → Jersey Mike's Serves Fresh Gains After IPO Stumble Subsequent to quarter-end, Gladstone acquired a 146,650-square-foot industrial property in Red Bud, Illinois, for $6.5 million. Management said the company remains focused on recycling capital from non-core assets and expanding its industrial exposure. Industrial properties represented 69% of annualized straight-line rent at June 30, approaching Gladstone’s near-term target of 70%. Cooper said the company has a letter of intent outstanding for an approximately $32 million acquisition and is evaluating 15 additional potential transactions. Management is seeking deals with initial cap rates of roughly 7.5% or higher and average cap rates above 9% over the lease term. Gladstone renewed or leased more than 126,000 square feet of office and retail space and more than 34,000 square feet of industrial space during the quarter. The leasing activity increased annual straight-line rent by $169,500, according to Cooper. The company also purchased land adjacent to its 521,000-square-foot facility in Clintonville, Wisconsin, and entered into a lease amendment to fund an approximately 86,000-square-foot expansion along with improvements to the existing building. Construction is expected to be completed in the second quarter of 2027, when a new 15-year lease term will begin. Gladstone leased 82,000 square feet on the second floor of its Austin, Texas, office property. Cooper said the transaction is expected to raise occupancy at that building from 69% to more than 90%. At June 30, the overall portfolio was 98.7% occupied, with a WALT of more than 7.1 years. Cooper said industrial occupancy stood at 99.8% and is expected to reach 100% by year-end based on one pending lease. The company’s office occupancy is expected to exceed 95% following the Austin leasing activity. While Gladstone does not intend to grow its office portfolio, Cooper said the company will evaluate capital expenditures for office renewals and re-leasing on a case-by-case basis. Management targets payback periods of six to nine months for tenant improvements and related investments. The company is also considering additional leasing or a potential sale of the Austin property, though Cooper said it would seek an attractive valuation. Total operating revenue rose to $44 million in the second quarter from $39.5 million a year earlier. CFO Gary Gerson said the increase reflected a larger portfolio, higher recovery revenue, increased rental rates and a one-time termination fee associated with a property sale. Operating expenses increased to $26.2 million from $25.1 million in the prior-year quarter, primarily because of higher depreciation from the larger portfolio and payment of most of the company’s incentive fee during the quarter. Cooper said the termination fee related to the North Carolina disposition was approximately $1.9 million and was recognized during the second quarter. The company also has $1.6 million of accelerated rent that will be recognized over time through 2029 under straight-line accounting requirements. Same-store lease revenue increased 1.2% during the first six months of 2026. Gladstone collected 100% of cash base rents during the quarter and in the current month, according to management. Cash on hand: approximately $8.4 million as of the call date. Available capacity under the line of credit: $68.8 million. Revolving credit facility borrowings at June 30: $51.57 million. Loan maturities remaining in 2026: $17.7 million. Loan maturities through the second quarter of 2027: $51.9 million. As of June 30, 47% of the company’s debt was fixed rate, 47% was hedged floating rate and 6% was unhedged floating rate, representing borrowings on the revolving credit facility. Gladstone’s effective average SOFR was 3.68%, Gerson said. The company did not sell common shares through its at-the-market program during the first half of 2026. Management said it may consider issuing equity for acquisitions that are accretive at the prevailing share price, but described current equity issuance as difficult given its view that the stock price does not reflect the quality of the portfolio. Gladstone’s common dividend remains $0.30 per share quarterly, or $1.20 annually. Gerson said the quarterly FFO payout ratio was just under 80%, while noting that the REIT distribution requirement is based on taxable income rather than GAAP earnings. Gladstone Commercial Corporation is a real estate investment trust (REIT) that focuses on the acquisition and long‐term ownership of industrial and office properties throughout the United States. The company's portfolio emphasizes both single‐tenant net‐leased investments and multi‐tenant assets, targeting properties that provide stable, predictable rental income. Gladstone Commercial seeks to grow shareholder value through both internal cash flow from its existing portfolio and strategic property acquisitions in markets with strong occupancy trends. The company's primary business activities include identifying, underwriting and acquiring commercial real estate assets that support light industrial users and professional office tenants. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Gladstone Commercial Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Please note that the limited information that follows in this press release is not adequate to make an informed investment judgment. MCLEAN, VA / ACCESS Newswire / August 5, 2026 / Gladstone Commercial Corporation (Nasdaq:GOOD) ("Gladstone Commercial" or the "Company") today reported financial results for the second quarter ended June 30, 2026. A description of funds from operations, or FFO, and Core FFO, both non-GAAP (generally accepted accounting principles in the United States) financial measures, are located at the end of this press release. All per share references are to fully-diluted weighted average shares of common stock and Non-controlling OP Units, unless otherwise noted. For further detail, please also refer to both the quarterly financial supplement and the Company's Quarterly Report on Form 10-Q, which can be retrieved from the Investors section of our website at www.gladstonecommercial.com. Summary Information (dollars in thousands, except share and per share data): Second Quarter Activity: Collected 100% of cash rents: Collected 100% of cash rents due during April, May, and June; Acquired property: Purchased one fully-occupied industrial property with 153,890 square feet of rental space, for $22.8 million and a cap rate of 6.76%; Acquired land: Purchased a parcel of land adjacent to our Clintonville, Wisconsin property for $0.7 million, which will be used to construct an approximately 86,000 square foot expansion of the current facility; Sold properties: Sold one industrial property as part of our capital recycling strategy for $12.9 million; Completed leasing activity: Leased or renewed 160,435 square feet with remaining lease terms ranging from 3.9 years to 10.4 years at three of our properties; and Paid distributions: Paid monthly cash distributions for the quarter totaling $0.30 per share on our common stock and Non-controlling OP Units, $0.414063 per share on our Series E Preferred Stock, $0.375 per share on our Series F Preferred Stock, $0.375 per share on our Series G Preferred Stock, and $0.2625 per share on our senior common stock. Second Quarter 2026 Results: Core FFO available to common shareholders and Non-controlling OP Unitholders for the three months ended June 30, 2026 was $18.3 million, a 7.7% increase when compared to the three months ended March 31, 2026, equaling $0.38 per share. Core FFO increased primarily due to a lease termination fee recognized on the property sold during the current period, partially offset by a higher net incentive fee and higher general and administrative expenses in the current period. Net income available to common stockholders and Non-controlling OP Unitholders for the three months ended June 30, 2026 was $5.1 million, or $0.11 per share, compared to net income available to common stockholders and Non-controlling OP Unitholders for the three months ended March 31, 2026 of $3.8 million, or $0.08 per share. In the Summary Information table above, we provide a reconciliation of Core FFO to net income (which we believe is the most directly comparable GAAP measure to Core FFO) for the three months ended June 30, 2026 and March 31, 2026, a computation of basic and diluted Core FFO per weighted average share of common stock and Non-controlling OP Unit, and basic and diluted net income per weighted average share of common stock and Non-controlling OP Unit. Subsequent to the end of the quarter: Collected 100% of July cash rents: Collected 100% of cash rents due in July; Acquired property: Purchased a 146,650 square foot industrial property for $6.6 million at a cap rate of 9.16%, which is leased to one tenant on an 8.4 year lease; and Declared distributions: Declared monthly cash distributions for July, August, and September 2026, totaling $0.30 per share on our common stock and Non-controlling OP Units, $0.414063 per share on our Series E Preferred Stock, $0.375 per share on our Series F Preferred Stock, $0.375 per share on our Series G Preferred Stock, and $0.2625 per share on our senior common stock. Comments from Gladstone Commercial's Chief Executive Officer and President, Buzz Cooper: "Our financial results reflect consistent performance and stabilized revenues from our tremendous same store property occupancy, rent collection and growth, accretive real estate investments, and our ability to renew tenants. We plan to continue our capital recycling program, whereby we sell non-core assets and use the proceeds to de-lever our portfolio, as well as to acquire properties in our target growth markets. We will continue to opportunistically sell non-core assets and redeploy the proceeds into stronger target growth markets with a focus on industrial investment opportunities. While we expect to face challenges due to inflation, with a corresponding increase in interest rates, and various geo-political and economic issues, we feel strongly about the depth of our tenant credit underwriting. We have collected 100% of the first two quarters' cash rents and 100% of July cash rents. We anticipate our tenants will successfully navigate the current economic climate and will be able to continue operating successfully when economic normalcy returns fully. Despite economic uncertainty, through the second quarter of 2026, we leased or renewed 966,057 square feet with eight tenants. We are actively marketing our remaining vacant space and currently anticipate positive outcomes. We expect to continue to have access to the debt and equity markets, as necessary, for added liquidity. We believe our same store rents, which have increased by 2% or greater annually in recent years, should continue to rise as we grow, and we will continue to primarily focus on investing in our target markets, with an emphasis on industrial properties and actively managing our portfolio." Conference Call: Gladstone Commercial will hold a conference call on Thursday, August 6, 2026, at 8:30 a.m. Eastern Time to discuss its earnings results. Please call (877) 407-9045 to enter the conference call. An operator will monitor the call and set a queue for questions. A conference call replay will be available beginning one hour after the call and will be accessible through August 13, 2026. To hear the replay, please dial (877) 660-6853 and use playback conference number 13760771. The live audio broadcast of the Company's quarterly conference call will also be available on the investors section of our website, www.gladstonecommercial.com. About Gladstone Commercial: Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Further information can be found at www.gladstonecommercial.com. About the Gladstone Companies: Information on the business activities of 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.gladstonecompanies.com. Non-GAAP Financial Measures: FFO: The National Association of Real Estate Investment Trusts ("NAREIT") developed FFO as a relative non-GAAP supplemental measure of operating performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO, as defined by NAREIT, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and impairment losses on property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. 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 Company believes that FFO per share provides investors with an additional context for evaluating its financial performance and as a supplemental measure to compare it to other REITs; however, comparisons of its FFO to the FFO of other REITs may not necessarily be meaningful due to potential differences in the application of the NAREIT definition used by such other REITs. 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 December 31, 2025, as filed with the SEC on February 18, 2026, and other reports filed with the SEC. Gladstone Commercial cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Gladstone Commercial undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. CONTACT:Gladstone Commercial Corporation(703) 287-5893 SOURCE: Gladstone Commercial Corporation View the original press release on ACCESS Newswire

MCLEAN, VA / ACCESS Newswire / July 14, 2026 / Gladstone Commercial Corporation (Nasdaq:GOOD) (the "Company") announced today that its board of directors declared cash distributions for the months of July, August and September 2026 and also announced its plan to report earnings for the second quarter ended June 30, 2026. Cash Distributions: Common Stock: $0.10 cash distribution per common share for each of July, August and September 2026, payable per Table 1 below. The Company has paid 258 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, the Company paid five consecutive quarterly cash distributions. Table 1: Summary of common stock cash distributions: Senior Common Stock: $0.0875 cash distribution per share of the Company's senior common stock ("Senior Common") for each of July, August and September 2026, payable per Table 2 below. The Company has paid 195 consecutive monthly cash distributions on its Senior Common. Table 2: Summary of Senior Common cash distributions: Series E Preferred Stock: $0.138021 cash distribution per share of the Company's 6.625% Series E Preferred Stock ("Series E Preferred Stock") for each of July, August and September 2026, payable per Table 3 below. The Series E Preferred Stock trades on Nasdaq under the symbol "GOODN." Table 3: Summary of Series E Preferred Stock cash distributions: Series F Preferred Stock: $0.125 cash distribution per share of the Company's 6.00% Series F Preferred Stock ("Series F Preferred Stock") for each of July, August and September 2026, payable per Table 4 below. The Series F Preferred Stock is not listed on a national securities exchange. Table 4: Summary of Series F Preferred Stock cash distributions: The Company offers a dividend reinvestment plan (the "DRIP") to its common stockholders and Series F Preferred stockholders. For more information regarding the DRIP, please visit www.gladstonecommercial.com. Series G Preferred Stock: $0.125 cash distribution per share of the Company's 6.00% Series G Preferred Stock ("Series G Preferred Stock") for each of July, August and September 2026, payable per Table 5 below. The Series G Preferred Stock trades on Nasdaq under the symbol "GOODO." Table 5: Summary of Series G Preferred Stock cash distributions: Earnings Announcement: The Company also announced today that it plans to report earnings for the second quarter ended June 30, 2026, after the stock market closes on Wednesday, August 5, 2026. The Company will hold a conference call on Thursday, August 6, 2026 at 8:30 a.m. ET to discuss its earnings results. Please call (877) 407-9045 to enter the conference call. An operator will monitor the call and set a queue for questions. A conference call replay will be available after the call and will be accessible through August 13, 2026. To hear the replay, please dial (877) 660-6853 and use playback conference number 13760771. The live audio broadcast of the Company's conference call will be available online at www.gladstonecommercial.com. If you have questions prior to or following the earnings release you may e-mail them to [email protected]. Gladstone Commercial Corporation is a real estate investment trust ("REIT") focused on acquiring, owning and operating net leased industrial and office properties across the United States. As of March 31, 2026, Gladstone Commercial's real estate portfolio consisted of 151 properties located in 27 states, totaling approximately 17.7 million square feet. Additional information can be found at www.gladstonecommercial.com. Investor Relations Inquiries: Please visit www.gladstonecommercial.com or (703) 287-5893. SOURCE: Gladstone Commercial Corporation View the original press release on ACCESS Newswire

Gladstone reported strong operational metrics — 100% cash rent collection, 98.7% occupancy and a 7.3‑year WALT after leasing/renewing >773,000 sq ft of industrial space — and management aims to push industrial assets to >20% of annualized straight‑line rent during 2026. FFO rose modestly to $0.35 per diluted share and total operating revenues increased to $41.9M, while the company reaffirmed its common dividend of $0.30 per quarter; balance-sheet liquidity includes ~$7.8M cash and ~$77M available on the credit line, with debt roughly 48% fixed/48% hedged and an effective SOFR of 3.68%. Management is actively recycling non‑core assets into industrial acquisitions — working on two deals expected to close, with ~three LOIs (~$87M) under review and target purchases around a mid‑6.5% cap — and says recent dispositions have been accretive to both straight‑line and current rent. Interested in Gladstone Commercial Corporation? Here are five stocks we like better. Gladstone Commercial (NASDAQ:GOOD) reported first-quarter 2026 results highlighted by steady funds from operations, high rent collections, and continued progress toward increasing the industrial concentration of its portfolio. Management said the company renewed or leased more than 773,000 square feet of industrial space and 32,000 square feet of office space during the quarter, resulting in an increase in straight-line rent of more than $86,000 annually. The company did not sell any properties in the first quarter, though it sold a portion of a land parcel and recorded a gain of approximately $1.8 million. → 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries On the call, the company reiterated its strategic focus on growing industrial exposure, adding value through renewals and capital investments, and disposing of non-core assets to recycle proceeds into industrial acquisitions. Management said it expects those efforts to support longer weighted average lease term (WALT), strong occupancy, straight-line rental growth, and a lower cost of capital over time. CEO and President Arthur Cooper pointed to operational performance metrics for the period, including: 100% collection of cash-based rents 98.7% occupancy across the portfolio 7.3-year average remaining lease term → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches Cooper said the company is working toward a near-term goal of having industrial assets represent 20% of annualized straight-line rent, with an expectation to reach that level and “push past it” during 2026. He added that while the company does not have a timeline to dispose of all office properties, management remains focused on increasing industrial concentration and being “strategic and intentional” around office dispositions in a challenging environment. CFO Gary Gerson reported first-quarter 2026 FFO and Core FFO of $0.35 per diluted share, compared with $0.34 per diluted share for both measures in the first quarter of 2025. → Tyson Foods' Total Returns: Tasty Treats for Income Investors? Same-store lease revenue increased 1% year over year for the three months ended March 31, 2026, which Gerson attributed to higher recovery revenue from property operating expenses and higher rental rates from leasing activity after the first quarter of 2025. Total operating revenues were $41.9 million for the quarter, with operating expenses of $25.2 million. In the prior-year period, operating revenues were $37.5 million and operating expenses were $23.9 million. Gerson said the revenue increase reflected a larger portfolio, higher recovery revenues, and higher rental rates, while expense growth was driven mainly by higher depreciation from the larger portfolio. He also noted that expenses were “partially offset by crediting back all the incentive fee in the first quarter of 2026.” Gerson said one small industrial property in Charlotte, North Carolina, was held for sale at quarter-end. As of the call, management said the company had $17.9 million of loan maturities in 2026 and $35.2 million of maturities in the first quarter of 2027. At the end of the quarter, revolving borrowings totaled $34.3 million. Gerson described the company’s debt profile as of March 31 as 48% fixed rate, 48% hedged floating rate, and 4% floating rate (the revolving credit amount). He said the company’s effective average SOFR was 3.68% and that its outstanding bank term loans are hedged to maturity with interest rate swaps, adding that management continues to monitor rates and adjust its hedging strategy as needed. The company did not sell shares under its at-the-market (ATM) program during the quarter, according to Gerson. He said that as of the call date, the company had approximately $7.8 million in cash and $77 million of availability under its line of credit. Gerson also reiterated the company’s common dividend of $0.30 per share per quarter, or $0.10 per month ($1.20 per year). During the Q&A, management addressed leasing spreads, saying that the quarter included a “plus-up,” largely tied to an industrial renewal, and that the company seeks to capture mark-to-market opportunities where possible. Management also said it is “in front of” expiring leases for 2026 and 2027, with particular focus on a property in Austin. Asked about a small sequential decline in occupancy versus the fourth quarter, management said it came from an office property in Pennsylvania where a tenant downsized. Management said occupancy should improve beginning in the third quarter when a new tenant starts a longer-term lease, with the company hoping to expand that tenant further within the building. Management said the Austin lease referenced on the call expires on Dec. 31, 2026, and that the company intends to address the situation before that date. Discussing the mix of upcoming expirations, management characterized the current profile as approximately 60% industrial and 40% office. Management said it is working on two industrial transactions it believes will close in the current quarter, and described the use of proceeds from a previously referenced building sale as “very accretive,” adding that both straight-line and current rent on that transaction “doubles.” Management also pointed to a slowdown in acquisition activity coming out of the first quarter and said it anticipates a more robust second and third quarter. In response to questions about cap rates and pipeline size, management said it is looking at deals around “the mid 6.5% cap going in,” while noting competition. Management said it typically has $300 million to $350 million under review, with “two LOIs, actually three LOIs currently, for approximately $87 million,” and about 13 opportunities under review at the time of the call. Asked about underwriting and whether macro factors have changed the company’s process, management said it has not changed its credit underwriting standards and does not plan to do so. Management also said it has not had tenants request rent relief, has not seen a drop in credit quality, and continues to conduct quarterly reviews and annual reviews where appropriate. Regarding sale-leaseback activity, management said it continues to focus on “mission-critical” industrial real estate, often tied to manufacturing and facilities with significant equipment and “heavy bolt down cost,” which can make tenants less likely to relocate. Chairman David Gladstone, in closing remarks, characterized the quarter as another “very nice” period for the company and highlighted the portfolio’s tenant quality and the team’s property management efforts “during these challenging times.” Gladstone Commercial Corporation is a real estate investment trust (REIT) that focuses on the acquisition and long‐term ownership of industrial and office properties throughout the United States. The company's portfolio emphasizes both single‐tenant net‐leased investments and multi‐tenant assets, targeting properties that provide stable, predictable rental income. Gladstone Commercial seeks to grow shareholder value through both internal cash flow from its existing portfolio and strategic property acquisitions in markets with strong occupancy trends. The company's primary business activities include identifying, underwriting and acquiring commercial real estate assets that support light industrial users and professional office tenants. The article "Gladstone Commercial Q1 Earnings Call Highlights" was originally published by MarketBeat.

Performance was driven by a 1% increase in same-store lease revenue, resulting from higher recovery revenues and rental rate growth from recent leasing activity. Management is executing a strategic pivot toward industrial concentration, targeting a near-term goal of 70% industrial annualized straight-line rent. High occupancy of 98.7% and 100% cash rent collection are attributed to the mission-critical nature of assets and rigorous credit underwriting of middle-market tenants. The company is actively recycling capital by disposing of non-core office assets and redeploying proceeds into accretive industrial acquisitions. Operational expenses increased primarily due to higher depreciation from a larger portfolio, though this was partially offset by an incentive fee credit. Strategic value-add initiatives include capturing mark-to-market opportunities and supporting tenant growth through targeted expansions and build-to-suit projects. Management anticipates a more robust acquisition environment in the second and third quarters as private credit fluctuations drive tenants toward sale-leaseback financing. The acquisition pipeline remains steady at approximately $300 million to $350 million, with three letters of intent currently totaling approximately $87 million. Near-term growth strategy focuses on manufacturing properties with high 'bolt-down' costs and specialized equipment, which increases tenant retention and switching costs. The company plans to utilize its $77 million line of credit and ATM program to fund accretive industrial acquisitions while maintaining a disciplined cost of capital. Management is proactively addressing 2026 and 2027 lease expirations, with a specific focus on the Austin property lease expiring at the end of 2026. Recorded a gain on sale of approximately $1.8 million from an opportunistic disposal of a land parcel to a municipality for a bike path. Identified one small industrial property in Charlotte, North Carolina, as held for sale as of the end of the quarter. Management acknowledged the challenging office environment but remains 'strategic and intentional' regarding the timing of office dispositions. Debt profile remains 96% fixed or hedged, mitigating exposure to interest rate volatility, with an effective average SOFR of 3.68%. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management reported a positive rent 'plus up' for the quarter, primarily driven by a renewed industrial asset. The company has addressed nearly all 2026 expirations, with only 3 or 4 leases remaining to be finalized. A slight decline in occupancy was attributed to a tenant downsizing in a Pennsylvania office building. Occupancy is expected to recover in the third quarter as a new tenant begins a longer-term lease for that space. Management is targeting industrial deals with going-in cap rates in the 'mid-6.5' range. The company differentiates itself in a competitive market by sticking to committed terms and avoiding 're-trading' deals after initial underwriting. The GM lease in Austin expires on December 31, 2026; management is 'working hard' on activity for that space. The 2027 expiration mix is approximately 60% industrial and 40% office, including a Delta facility in Atlanta where renewal discussions are ongoing. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.