Gladstone Commercial Corporation - Real Estate Investment Trust · NASDAQ:GOOD
Gladstone Commercial Corporation - Real Estate Investment Trust — Gladstone Commercial — Investor Presentation (November 2023)
33 slides from Gladstone Commercial Corporation - Real Estate Investment Trust's investor presentation, November 2023
Slide 1: Investor Presentation November 2023
Investor Presentation November 2023 1
Slide 2: Legal Disclaimer
Legal Disclaimer Forward-Looking Statements: This presentation may include forward-looking statements within the meaning of the Securities Act of 1933 or the Securities Exchange Act of 1934. Forward-looking statements are typically identified by words such as “estimate,” “may,” “might,” “believe,” “
Slide 3: Gladstone Commercial Corporation
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Slide 4: Company Overview
Company Overview ▪ Gladstone Commercial Corporation (“Gladstone” or the “Company”) is a publicly owned Real Estate Investment Trust (“REIT”) that completed its IPO in 2003 and is listed on Nasdaq (Ticker: GOOD) ▪ The Company invests in single tenant and anchored multi-tenant net leased assets, with
Slide 5: Gladstone Commercial's Investment Philosophy
Gladstone Commercial’s Investment Philosophy 5
Slide 6: Gladstone Commercial Overview
Gladstone Commercial Overview Portfolio summary (9/30/2023) ▪ IPO in 2003 (Nasdaq: GOOD) # of Properties 135 1 Square feet (mm) 17.2 ▪ Market Capitalization: $490mm Occupancy 96.6% 1 ▪ Enterprise Value: $1,420mm States 27 Tenants 110 ▪ Common stock annual distribution run Industries 19 rate per shar
Slide 7: Significant Growth & Diversification Since 2010
Significant Growth & Diversification Since 2010 GOOD Portfolio 12/31/2010 9/30/2023 Variance Total assets ($mm) $ 410.6 $ 1,167.2 $ 756.6 Properties 65 135 70 Grew a Tenants 52 110 58 diverse portfolio Square feet (mm) 6.8 17.2 10.4 Occupancy (%) 97.2 % 96.6 % (0.6)% Lease Revenue From Top 5 tenants
Slide 8: Current Balance Sheet and Portfolio Supports Future Accretive Acquisitions
Current Balance Sheet and Portfolio Supports Future Accretive Acquisitions ▪ Stable portfolio of assets in strong locations backed by credit-worthy tenants: • 100% base rent collection for the quarter ended September 30, 2023 • 96.6% portfolio occupancy as of September 30, 2023 • 6.8 years remaining
Slide 9: Investment Strategy
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Slide 10: Proven Strategy of Underwriting Real Estate and Tenant Strength
Proven Strategy of Underwriting Real Estate and Tenant Strength ▪ Tenants operate in a diverse array of industries ▪ Each tenant’s credit underwritten to Gladstone standards, developed over decades of middle Tenant strength market corporate lending, investing and buyouts through affiliated funds ▪ E
Slide 11: Continue Transition to Industrial-Focused Net Lease REIT
Continue Transition to Industrial-Focused Net Lease REIT ▪ The Company continues to focus on acquiring industrial assets in attractive growth markets with long-term net leases to credit tenants ▪ The Company began a focused transition to industrial assets in 2018 (before COVID-19), and we have succe
Slide 12: Gladstone Has Achieved Consistent and Disciplined Growth
Gladstone Has Achieved Consistent and Disciplined Growth Historical Investment Volume ($000) Invested in 8 Invested in growth 200,000 8 growth markets at a markets at 7.1% a 7.4% weighted weighted average cap 145,611 average rate 150,000 136,501 cap rate 131,188 129,082 129,160 Invested in 4 114,350
Slide 13: Portfolio Overview
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Slide 14: Portfolio Overview
Portfolio Overview Geographic ▪ 135 properties across the U.S., located in 27 states diversity ▪ Focus on secondary growth markets with higher yields ▪ Diverse base of 19 different industries Tenant and ▪ Primarily industrial and office property types property diversity ▪ Focus on mid-size tenants o
Slide 15: Diversified Portfolio
Diversified Portfolio Geographic diversification 135 properties spread across 27 states (by annualized straight line rent) Northeast 15% Midwest 27% Southwest 20% Southeast 38% Property type diversification (by annualized straight line rent) Medical Office 1% Retail 3% Office 37% Industrial 59% Note
Slide 16: High Quality, Diversified Portfolio
High Quality, Diversified Portfolio % of annualized straight Publicly-traded vs. privately-held tenants Top tenants % of SF line rent (as % of annualized straight line rent) 4% 1% 3% 6% 3% 1% Public 42% 2% 1% Private 58% 2% 1% All other tenants 86 % 90 % Industry diversification Tenant credit rating
Slide 17: High Quality, Diversified Portfolio
High Quality, Diversified Portfolio Portfolio as of December 31, 2019 Portfolio as of September 30, 2023 (as % of annualized straight line rent) (as % of annualized straight line rent) By Property Type Other 5% Other 4% Office 37% Industrial 38% Office 57% 2020-2023 Industrial acquisitions and 59% d
Slide 18: Financial Performance
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Slide 19: Summary Historical Performance
Summary Historical Performance Funds from Operations, as adjusted for comparability (Per Total Revenue ($ in millions) Share) $175 $149.0 $1.8 $150 $133.2 $137.7 $1.54 $1.53 $1.54 $1.58 $1.55 $1.56 $1.60 $1.54 $1.5 $125 $106.8 $114.4 $111.7 $94.8 $1.2 $1.10 $100 $83.8 $86.4 $75 $0.9 $50 $0.6 $25 $0.
Slide 20: Capital Structure Overview
Capital Structure Overview Current Capital Structure as of 9/30/2023 ($000s) Capital Structure Details $1,500,000 (Dollars in $000s, except stock price) Wtd. Average Rate 9/30/2023 Mortgage Notes Payable, Net 4.20% $ 310,974 Less: Cash & Cash Equivalents (18,263) Net Mortgage Debt $ 292,711 $1,250,0
Slide 21: Liquidity and Debt Overview
Liquidity and Debt Overview Reducing Leverage Fixed vs. Floating Debt 70% 63.2% 59.3% 58.1% 60% 56.9% Floating Rate: 9.4% 48.6% 47.0% 50% 46.8% 46.1% 45.9% 45.5% 45.3% 45.5% 40% Fixed Rate: 41.6% 30% 20% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 2023 Hedged Floating Rate: 49.0% Net D
Slide 22: Management
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Slide 23: Experienced Leadership Team
Experienced Leadership Team David Gladstone, ▪ Current Chairman and CEO of all four Gladstone funds, public companies #7, #8, #9 and #10 in his career Chairman and CEO ▪ Former Chairman of Allied Capital Commercial (REIT), Allied Capital and American Capital 25+ years of experience ▪ Former board me
Slide 24: Experienced Leadership Team (cont'd)
Experienced Leadership Team (cont’d) EJ Wislar, Chief ▪ Manages regional acquisition and asset management activities Investment Officer, ▪ Former Vice President with United Bankshares and Senior Investment Associate with Prudential Global Head of Northeast and Investment Management Real Estate Finan
Slide 25: Conclusion
Conclusion 25
Slide 26: Summary Highlights
Summary Highlights ▪ Growing industrial base comprising 59% of annualized straight line rent as of September 30, 2023, up from 38% as of December 31, 2019 ▪ Proven credit and real estate investment strategy has maintained high occupancy (>95%) since 2003 ▪ Strengthened credit profile with net total
Slide 27: Appendix
Appendix 1. Condensed Consolidated Statements of Operations 2. Funds From Operations (FFO) and Core FFO 3. Condensed Consolidated Balance Sheets 4. Debt Summary 5. External Management Structure Qualities 27
Slide 28: Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Operations ($ in thousands, except per share amounts) For the three months ended (unaudited) For the nine months ended (unaudited) 9/30/2023 6/30/2023 9/30/2022 9/30/2023 9/30/2022 Operating revenues Lease revenue $ 36,464 $ 38,658 $ 39,834 $ 111,675 $ 111,764 To
Slide 29: Funds From Operations (FFO) and Core FFO
Funds From Operations (FFO) and Core FFO ($ in thousands except per share amounts) For the three months ended (unaudited) For the nine months ended (unaudited) 9/30/2023 6/30/2023 9/30/2022 9/30/2023 9/30/2022 Net income (loss) $ 1,792 $ (4,588) $ 2,787 $ 370 $ 7,852 Less: Distributions attributable
Slide 30: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets 9/30/2023 ($ in thousands) (unaudited) 12/31/2022 ASSETS Real estate, at cost $ 1,226,461 $ 1,287,297 Less: accumulated depreciation 291,986 286,150 Total real estate, net 934,475 1,001,147 Lease intangibles, net 102,629 111,622 Real estate and related assets he
Slide 31: Debt Summary
Debt Summary ($ in thousands) Weighted Average Interest Principal Balance Principal Maturity Date Rate as of Outstanding as of 9/30/2023 9/30/2023 2023 4.04% 9,015 2024 5.02% 19,601 2025 4.04% 28,442 2026 4.21% 32,115 2027 4.38% 103,886 2028 4.14% 38,577 2029 5.22% 21,707 2030 3.23% 39,327 2031 3.24
Slide 32: External Management Structure Qualities
External Management Structure Qualities • President, CIO, CFO, Acquisitions, Asset Management and Accounting staff exclusively dedicated to Gladstone Commercial ▪ Benefit: Aligned with shareholder interests • Legal, Compliance, Human Resources, and IT shared among four funds ▪ Benefit: Reduced costs
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