Gladstone Commercial Corporation - Real Estate Investment Trust · NASDAQ:GOOD
Gladstone Commercial Corporation - Real Estate Investment Trust — Gladstone Commercial — Investor Presentation (May 2023)
33 slides from Gladstone Commercial Corporation - Real Estate Investment Trust's investor presentation, May 2023
Slide 1: Investor Presentation May 2023
Investor Presentation May 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 (3/31/2023) ▪ IPO in 2003 (Nasdaq: GOOD) # of Properties 137 1 Square feet (mm) 17.2 ▪ Market Capitalization: $510mm Occupancy 95.9% 1 ▪ Enterprise Value: $1,438mm States 27 Tenants 111 ▪ Common stock annual distribution per Industries 19 share: $1.202
Slide 7: Significant Growth & Diversification Since 2010
Significant Growth & Diversification Since 2010 GOOD Portfolio 12/31/2010 3/31/2023 Variance Total assets ($mm) $ 410.6 $ 1,186.6 $ 776.0 Properties 65 137 72 Grew a Tenants 52 111 59 diverse portfolio Square feet (mm) 6.8 17.2 10.4 Occupancy (%) 97.2 % 95.9 % (1.3)% 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 March 31, 2023 • 95.9% portfolio occupancy as of March 31, 2023 • 6.9 years remaining average
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 ($000) Invested in 8 Invested in growth 200,000 8 growth markets at a markets at 7.1% a 7.4% weighted weighted average cap 145,611 average rate 150,000 136,501 cap rate 131,188 129,082 129,160 114,350 107,000 99,65
Slide 13: Portfolio Overview
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Slide 14: Portfolio Overview
Portfolio Overview Geographic ▪ 137 properties across the U.S., located in 27 states diversity ▪ Focus on secondary growth markets with higher yields ▪ Diverse base of 19 different industries Tenant and ▪ Primarily industrial and office property types property diversity ▪ Focus on mid-size tenants o
Slide 15: Diversified Portfolio
Diversified Portfolio Geographic diversification 137 properties spread across 27 states (by annualized straight line rent) Northeast 16% Midwest 26% Southwest 20% Southeast 38% Property type diversification (by annualized straight line rent) Medical Office 1% Retail 3% Office 37% Industrial 59% Note
Slide 16: High Quality, Diversified Portfolio
High Quality, Diversified Portfolio % of annualized straight Publicly-traded vs. privately-held tenants Top tenants % of SF line rent (as % of annualized straight line rent) 4% 1% 3% 6% 3% 1% Public 44% 2% 1% Private 56% 2% 1% All other tenants 86 % 90 % Industry diversification Tenant credit rating
Slide 17: High Quality, Diversified Portfolio
High Quality, Diversified Portfolio Portfolio as of December 31, 2019 Portfolio as of March 31, 2023 (as % of annualized straight line rent) (as % of annualized straight line rent) By Property Type Other 5% Other 4% Office 37% Industrial 38% Office 57% 2020-2022 Industrial acquisitions and 59% dives
Slide 18: Financial Performance
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Slide 19: Summary Historical Performance
Summary Historical Performance Funds from Operations, as adjusted for comparability (Per Total Revenue ($ 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 $94.8 $1.2 $100 $83.8 $86.4 $75 $0.9 $50 $36.6 $0.6 $0.37 $25 $0.3
Slide 20: Capital Structure Overview
Capital Structure Overview Current Capital Structure as of 3/31/2023 ($000s) Capital Structure Details $1,500,000 (Dollars in $000s, except stock price) Wtd. Average Rate 3/31/2023 Mortgage Notes Payable, Net 4.24% $ 354,556 Less: Cash & Cash Equivalents (14,286) Net Mortgage Debt $ 340,270 $1,250,0
Slide 21: Liquidity and Debt Overview
Liquidity and Debt Overview Reducing Leverage Fixed vs. Floating Debt 70% 63.2% 59.3% 58.1% 60% 56.9% Floating Rate: 3.5% 48.6% 47.0% 50% 46.8% 46.1% 45.9% 45.5% 45.3% 45.2% 40% 30% Fixed Rate: 47.4% 20% Hedged Floating 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1 Rate: 49.1% 2023 Net D
Slide 22: Management
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Slide 23: Experienced Leadership Team
Experienced Leadership Team David Gladstone, ▪ Current Chairman and CEO of all four Gladstone funds, public companies #7, #8, #9 and #10 in his career Chairman and CEO ▪ Former Chairman of Allied Capital Commercial (REIT), Allied Capital and American Capital 25+ years of experience ▪ Former board me
Slide 24: Experienced Leadership Team (cont’d)
Experienced Leadership Team (cont’d) EJ Wislar, Chief ▪ Manages regional acquisition and asset management activities Investment Officer, ▪ Former Vice President with United Bankshares and Senior Investment Associate with Prudential Global Head of Northeast and Investment Management Real Estate Finan
Slide 25: Conclusion
Conclusion 25
Slide 26: Summary Highlights
Summary Highlights ▪ Growing industrial base comprising 59% of annualized straight line rent as of March 31, 2023, up from 38% as of December 31, 2019 ▪ Proven credit and real estate investment strategy has maintained high occupancy (>95%) since 2003 ▪ Strengthened credit profile with net total debt
Slide 27: Appendix
Appendix 1. Condensed Consolidated Statements of Operations 2. Funds From Operations (FFO) and Core FFO 3. Condensed Consolidated Balance Sheets 4. Debt Summary 5. External Management Structure Qualities 27
Slide 28: Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Operations ($ in thousands, except per share amounts) For the three months ended (unaudited) 3/31/2023 12/31/2022 3/31/2022 Operating revenues Lease revenue $ 36,554 $ 37,217 $ 35,531 Total operating revenues $ 36,554 $ 37,217 $ 35,531 Operating expenses Deprecia
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) 3/31/2023 12/31/2022 3/31/2022 Net income $ 2,397 $ 1,812 $ 3,391 Less: Distributions attributable to preferred and senior common stock (3,131) (3,117) (3,062) Less: Loss on exti
Slide 30: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets 3/31/2023 ($ in thousands) (unaudited) 12/31/2022 ASSETS Real estate, at cost $ 1,285,539 $ 1,287,297 Less: accumulated depreciation 294,773 286,994 Total real estate, net 990,766 1,000,303 Lease intangibles, net 107,778 111,622 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 3/31/2023 3/31/2023 2023 4.80% 57,523 2024 4.63% 11,192 2025 4.04% 28,907 2026 4.33% 41,344 2027 4.38% 105,506 2028 3.54% 29,935 2029 5.22% 21,871 2030 3.23% 39,806 2031 3.2
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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