On November 6, 2023, Gladstone Commercial Corp (GOOD, Financial) released its financial results for the third quarter ended September 30, 2023. The company reported a 17.3% decrease in Core Funds from Operations (FFO) available to common stockholders and Non-controlling OP Unitholders, amounting to $13.7 million, compared to the previous quarter. This decrease was primarily due to accelerated rent from a lease termination recognized during Q2 2023 and higher interest expenses due to rising interest rates.
Financial Highlights
The company's total operating revenue for Q3 2023 was $36.46 million, a decrease of 5.7% from the previous quarter. Total operating expenses also decreased by 12.2%, amounting to $29.59 million. The net income for the quarter was $1.79 million, a significant improvement from the net loss of $4.59 million in Q2 2023.
Despite the decrease in Core FFO, Gladstone Commercial Corp (GOOD, Financial) maintained strong property occupancy and rent collection, collecting 100% of cash rents due during July, August, and September. The company also sold three non-core properties as part of its capital recycling program for $19.0 million and borrowed $9.0 million in fixed rate mortgage debt at a weighted average interest rate of 6.10%, maturing on September 1, 2028.
Company's Outlook
Despite the challenges posed by the pandemic and significant inflation, the company remains optimistic about its future performance. Gladstone Commercial Corp (GOOD, Financial) plans to continue its capital recycling program, selling non-core assets and using the proceeds to de-lever its portfolio and acquire properties in target growth markets. The company has successfully exited six assets in 2023 and anticipates selling additional non-core assets in the next one to two years.
President of Gladstone Commercial, Buzz Cooper, commented on the company's performance, stating,
Our financial results reflect consistent performance and stabilized revenues from our tremendous same store property occupancy, rent collection and growth, accretive real estate investments made during 2023, and our ability to renew tenants, as well as our deleveraging and capital recycling programs."
Despite the decrease in Core FFO, the company's financial results and future plans indicate a strong focus on maintaining property occupancy, rent collection, and growth, which are key factors for its continued success.
Explore the complete 8-K earnings release (here) from Gladstone Commercial Corp for further details.
