Gladstone Commercial Corporation - Real Estate Investment Trust · NASDAQ:GOOD
Gladstone Commercial Corporation - Real Estate Investment Trust — Gladstone Commercial — Investor Presentation (March 2023)
33 slides from Gladstone Commercial Corporation - Real Estate Investment Trust's investor presentation, March 2023
Slide 1: Investor Presentation March 2023
Investor Presentation March 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
[PIC] [PIC] [PIC] [PIC] [PIC] [PIC] Gladstone Commercial Corporation [PIC] [PIC] [PIC] [PIC] [PIC] [PIC] 3
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 (12/31/2022) ▪ IPO in 2003 (Nasdaq: GOOD) # of Properties 137 1 Square feet (mm) 17.2 ▪ Market Capitalization: $742mm Occupancy 96.8% 1 ▪ Enterprise Value: $1,672mm States 27 Tenants 112 ▪ Common stock annual distribution per Industries 19 share: $1.20
Slide 7: Significant Growth & Diversification Since 2010
Significant Growth & Diversification Since 2010 GOOD Portfolio 12/31/2010 12/31/2022 Variance Total assets ($mm) $ 410.6 $ 1,201.5 $ 790.9 Properties 65 137 72 Grew a Tenants 52 112 60 diverse portfolio Square feet (mm) 6.8 17.2 10.4 Occupancy (%) 97.2 % 96.8 % (0.4)% Lease Revenue From Top 5 tenant
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 year ended December 31, 2022 • 96.8% portfolio occupancy as of December 31, 2022 • 7.0 years remaining aver
Slide 9: Investment Strategy
[PIC] [PIC] [PIC] [PIC] [PIC] [PIC] Investment Strategy [PIC] [PIC] [PIC] [PIC] [PIC] [PIC] 9
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 ($000) Invested in 8 Invested in 8 growth growth 200,000 Invested in 14 growth markets at a markets at a markets at a 7.7% 7.4% 7.1% weighted average cap weighted weighted rate average cap average cap 145,611 rate
Slide 13: Portfolio Overview
[PIC] [PIC] [PIC] [PIC] [PIC] [PIC] Portfolio Overview [PIC] [PIC] [PIC] [PIC] [PIC] [PIC] ‹#›
Slide 14: Portfolio Overview
Portfolio Overview Geographic ▪ 137 properties across the U.S., located in 27 states diversity ▪ Focus on secondary growth markets with higher yields ▪ Diverse base of 19 different industries Tenant and ▪ Primarily industrial and office property types property diversity ▪ Focus on mid-size tenants o
Slide 15: Diversified Portfolio
Diversified Portfolio Geographic diversification 137 properties spread across 27 states (by annualized straight line rent) Northeast 15% Midwest 25% Southwest 23% Southeast 37% Property type diversification (by annualized straight line rent) Medical Office 1% Retail 3% Office 40% Industrial 56% Note
Slide 16: High Quality, Diversified Portfolio
High Quality, Diversified Portfolio % of annualized straight Publicly-traded vs. privately-held tenants Top tenants % of SF (as % of annualized straight line rent) line rent 4% 1% 4% 1% 3% 6% Public 46% 3% 1% Private 54% 2% 1% All other tenants 84 % 90 % Industry diversification Tenant credit rating
Slide 17: High Quality, Diversified Portfolio
High Quality, Diversified Portfolio Portfolio as of December 31, 2019 Portfolio as of December 31, 2022 (as % of annualized straight line rent) (as % of annualized straight line rent) By Property Type Other 5% Other 4% Office 40% Industrial 38% Office 57% Industrial 2020-2022 acquisitions and 56% di
Slide 18: Financial Performance
[PIC] [PIC] [PIC] [PIC] [PIC] [PIC] Financial Performance [PIC] [PIC] [PIC] [PIC] [PIC] [PIC] 18
Slide 19: Summary Historical Performance
Summary Historical Performance Funds from Operations, as adjusted for comparability (Per Total Revenue ($ in millions) Share) $175 $149.0 $1.8 $1.58 $1.60 $150 $133.2 $137.7 $1.54 $1.53 $1.54 $1.55 $1.56 $1.54 $1.5 $125 $106.8 $114.4 $94.8 $1.2 $100 $83.8 $86.4 $75 $0.9 $50 $0.6 $25 $0.3 $0 $0 2015
Slide 20: Capital Structure Overview
Capital Structure Overview Current Capital Structure as of 12/31/2022 ($000s) Capital Structure Details $1,750,000 (Dollars in $000s, except stock price) Wtd. Average Rate 12/31/2022 Mortgage Notes Payable, Net 4.24% $ 359,389 Less: Cash & Cash Equivalents (11,653) Net Mortgage Debt $ 347,736 $1,500
Slide 21: Liquidity and Debt Overview
Liquidity and Debt Overview Reducing Leverage Fixed vs. Floating Debt 70% 63.2% 59.3% 58.1% 60% 56.9% Floating Rate: 3.1% 48.6% 47.0% 46.8% 50% 46.1% 45.9% 45.5% 45.3% 40% 30% Fixed Rate: 47.9% Hedged Floating 20% Rate: 49.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net Debt/Gross Asse
Slide 22: Management
[PIC] [PIC] [PIC] [PIC] [PIC] [PIC] Management [PIC] [PIC] [PIC] [PIC] [PIC] [PIC] 22
Slide 23: Experienced Leadership Team
Experienced Leadership Team David Gladstone, ▪ Current Chairman and CEO of all four Gladstone funds, public companies #7, #8, #9 and #10 in his career Chairman and CEO ▪ Former Chairman of Allied Capital Commercial (REIT), Allied Capital and American Capital 25+ years of experience ▪ Former board me
Slide 24: Experienced Leadership Team (cont'd)
Experienced Leadership Team (cont’d) EJ Wislar, Chief ▪ Manages regional acquisition and asset management activities Investment Officer, ▪ Former Vice President with United Bankshares and Senior Investment Associate with Prudential Global Head of Northeast and Investment Management Real Estate Finan
Slide 25: Conclusion
Conclusion 25
Slide 26: Summary Highlights
Summary Highlights ▪ Growing industrial base comprising 56% of annualized straight line rent as of December 31, 2022, up from 38% as of December 31, 2019 ▪ Proven credit and real estate investment strategy has maintained high occupancy (>95%) since 2003 ▪ Strengthened credit profile with net total d
Slide 27: Appendix
Appendix 1. Condensed Consolidated Statements of Operations 2. Funds From Operations (FFO) and Core FFO 3. Condensed Consolidated Balance Sheets 4. Debt Summary 5. External Management Structure Qualities 27
Slide 28: Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Operations ($ in thousands, except per share amounts) For the three months ended (unaudited) For the twelve months ended 12/31/2022 9/30/2022 12/31/2021 12/31/2022 12/31/2021 Operating revenues Lease revenue $ 37,217 $ 39,834 $ 35,306 $ 148,981 $ 137,688 Total op
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 twelve months ended 12/31/2022 9/30/2022 12/31/2021 12/31/2022 12/31/2021 Net income $ 1,812 $ 2,497 $ 3,076 $ 9,272 $ 9,733 Less: Distributions attributable to preferred
Slide 30: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets ($ in thousands) 12/31/2022 12/31/2021 ASSETS Real estate, at cost $ 1,287,297 $ 1,225,258 Less: accumulated depreciation 286,994 266,672 Total real estate, net 1,000,303 958,586 Lease intangibles, net 111,622 114,494 Real estate and related assets held for sale
Slide 31: Debt Summary
Debt Summary ($ in thousands) Weighted Average Interest Principal Balance Principal Maturity Date Rate as of Outstanding as of 12/31/2022 12/31/2022 2023 4.81% 58,300 2024 4.63% 11,309 2025 4.03% 31,228 2026 4.34% 41,785 2027 4.38% 106,246 2028 3.54% 30,114 2029 5.22% 21,952 2030 3.23% 40,045 2031 3
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
Slide 33: arrvet
arrvet me HAL (aii : me ECE ag t
Gladstone Commercial — Investor Presentation (March 2023) on 6ix