Gladstone Commercial (GOOD) Sees High Occupancy, Grows Portfolio
Gladstone Commercial Corporation GOOD has been witnessing active leasing, aiding solid occupancy, healthy rental collections and ample liquidity to back its acquisitions and growth efforts.
As of Jun 8, 2022, Gladstone Commercial’s portfolio occupancy was 97.0% due to successful leasing activities. Moreover, Gladstone Commercial collected 100% of the May cash base rent. The healthy levels of rental receipts have enabled GOOD to maintain its dividend rate.
Gladstone Commercial is also focused on expansion. In May, the company acquired a 260,719-square-foot, two-property industrial portfolio, with locations in Fort Payne, AL and Cleveland, OH, for $19.3 million. In the same month, Gladstone Commercial acquired a 345,584-square-foot industrial manufacturing/distribution warehouse, positioned on 59 acres in Wilmington, NC, for $18.8 million.
So far in the year, the company shelled out $51.4 million as the total cost for the acquisition of 742,303 square feet of industrial real estate. These consisted of five properties and four tenants with an average remaining lease term at acquisition of 11.7 years.
Gladstone Commercial is also witnessing healthy demand for its properties. So far in the year, GOOD extended or executed 287,483 square feet of space, covering five tenants with an average residual lease term of 10.2 years. The annualized straight-line rent of these transactions amounts to $3.1 million.
Further, management noted that as of Jun 8, 2022, the company’s available liquidity was $20.2 million, consisting of a revolving credit facility and cash in hand. Gladstone Commercial continues to raise equity capital. Since Jan 1, 2022, and through Jun 8, 2022, the company issued 1,294,681 shares of common stock for net proceeds of $27.4 million. Such an amount of liquidity supports Gladstone Commercial’s growth strategy.
Shares of this Zacks Rank #4 (Sell) company have declined 9.8% in the past three months compared with the industry’s fall of 4.9%.
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Stocks to Consider
Some key picks from the REIT sector include Terreno Realty TRNO and OUTFRONT Media OUT.
The Zacks Consensus Estimate for Terreno Realty’s 2022 funds from operations (FFO) per share has marginally moved upward in the past two months to $1.96. TRNO presently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for OUTFRONT Media’s ongoing year’s FFO per share has been raised 51.4% over the past two months to $2.09. OUT sports a Zacks Rank #1 currently.
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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