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Gladstone Commercial (GOOD) Posts Strong Rent Receipts, Occupancy

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Gladstone Commercial Corporation GOOD is witnessing high levels of rental collections, active leasing that is aiding solid occupancy, and ample liquidity to back its acquisitions and growth initiatives.

Specifically, the company has collected 100% of June cash base rents. Moreover, as of Jun 30, 2021, it portfolio occupancy is in excess of 95%. Notably, successful leasing activities have likely driven such encouraging portfolio occupancy. Moreover, the healthy levels of rental receipts have enabled the company to maintain its dividend rate.

In fact, its recent leasing activities look encouraging. On Jun 24, Gladstone announced a six-year lease extension through Aug 31, 2029, with Yanfeng US Automotive Interior Systems LLC at its 315,000-square-foot industrial facility in Monroe, MI, a suburb of Detroit. Markedly, the lease extension increased the company’s straight-line rent by 9.6%. The tenant occupies the entire building and has the right to request expansion of the building to accommodate its growing demands.

Also, on Jul 1, the company started a new lease through Dec 31, 2033, with Lyseon North America, Inc. at its 238,312-square-foot industrial facility at the Port of Catoosa outside of Tulsa, OK.

Gladstone is also focused on its growth measures and on Jun 17, it announced the acquisition of a 25,200-square-foot industrial service facility situated on 10.2 acres, in Baytown, TX for $8.125 million. Fully leased to Mobile Mini, Inc., this property has a 12.7 years of residual lease term. The GAAP capitalization rate on the investment is 7.1%.

Apart from these efforts, management noted that as of Jun 30, 2021, its available liquidity was roughly $33 million, consisting of revolving credit facility and cash on hand. Also, the company continues to raise equity capital through its ATM program and since the beginning of the year, has issued roughly 1 million shares of common stock for net proceeds of $19.5 million.Such an amount of liquidity supports Gladstone’s growth strategy.

Shares of this Zacks Rank #3 (Hold) company have gained 26.2% so far in the year, outperforming the industry’s rally of 17%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Zacks Investment Research

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Stocks to Consider

Mack-Cali Realty Corporation’s CLI Zacks Consensus Estimate for 2021 FFO per share moved up marginally over the past month. The company currently carries a Zacks Rank of 2 (Buy).

National Storage Affiliates Trust’s NSA consensus estimate for the current-year FFO per share moved 3.1% north to $1.99 in a month’s time. Currently, the company carries a Zacks Rank of 2.

Braemar Hotels & Resorts Inc. BHR holds a Zacks Rank of 2, at present. The consensus estimate for the ongoing year’s FFO per share has been revised 4.5% upward to 46 cents over the past month.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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