Gladstone Commercial Corp.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 5 May 2026: press release. Guidance figures: 5 kept. The quarter’s numbers.

Key takeaways

Core FFO fell 4.7%: Core FFO was $17.0 million, or $0.35 per share, down 4.7% from the prior quarter. The company attributed the decrease mainly to a lease termination fee and easement settlement recognized in the prior period. Source
805,622 square feet leased or renewed: The company leased or renewed 805,622 square feet with five tenants across five properties. Remaining lease terms range from 0.7 to 6.0 years. Source
Rent collection at 100%: The company collected 100% of cash rents due in January, February and March, and reported 100% of April cash rents collected after quarter end. Source
151 properties, 98.7% leased: The company owned 151 properties totaling 17,675,963 square feet. Square feet leased was 98.7%, compared with 99.1% at December 31, 2025. One property is held for sale at $12.0 million. Source
Distributions held at prior level: The company paid $0.30 per share on common stock and OP units for the quarter. Preferred and senior common distributions were also paid at the same amounts as the prior quarter. Source
Capital recycling continues: Management said the company will keep selling non-core assets and using the proceeds to reduce debt and buy properties in target growth markets. Source
Inflation and rate challenges expected: Management said it expects challenges from inflation, a corresponding rise in interest rates, and geo-political and economic issues. Source

“Our financial results reflect consistent performance and stabilized revenues from our tremendous same store property occupancy, rent collection and growth, accretive real estate investments, and our ability to renew tenants.”
Buzz Cooper, Chief Executive Officer and President

Guidance

Area	Period	Figure	Against last quarter
Distribution, common stock and Non-controlling OP Units Source	April - June 2026	$0.30 per share	Kept
Distribution, Series E Preferred Stock Source	April - June 2026	$0.414063 per share	Kept
Distribution, Series F Preferred Stock Source	April - June 2026	$0.375 per share	Kept
Distribution, Series G Preferred Stock Source	April - June 2026	$0.375 per share	Kept
Distribution, senior common stock Source	April - June 2026	$0.2625 per share	Kept

Results and growth drivers

Core FFO fell 4.7%: Core FFO was $17.0 million, or $0.35 per share, down 4.7% from the prior quarter. The company attributed the decrease mainly to a lease termination fee and easement settlement recognized in the prior period. Source
Net income rose on lower expenses: Total operating revenue was $41.9 million, down 3.6%. Net income was $7.0 million, up 29.5%, with operating expenses down 4.3% and other expense, net down 17.2%. Source
Per-share earnings improved, FFO eased: Net income available to common holders was $3.8 million, or $0.08 per share, up from $0.05. FFO per share was $0.35, down from $0.37 in the prior quarter. Source

Leasing, occupancy and rent

805,622 square feet leased or renewed: The company leased or renewed 805,622 square feet with five tenants across five properties. Remaining lease terms range from 0.7 to 6.0 years. Source
Rent collection at 100%: The company collected 100% of cash rents due in January, February and March, and reported 100% of April cash rents collected after quarter end. Source
151 properties, 98.7% leased: The company owned 151 properties totaling 17,675,963 square feet. Square feet leased was 98.7%, compared with 99.1% at December 31, 2025. One property is held for sale at $12.0 million. Source
Remaining vacant space marketed: The company is actively marketing its remaining vacant space and said it currently anticipates positive outcomes. Source
Same-store rents expected to rise: Management said same-store rents have increased by 2% or more annually in recent years and are expected to keep rising as the company grows. Source

“While we expect to face challenges due to inflation, with a corresponding increase in interest rates, and various geo-political and economic issues, we feel strongly about the depth of our tenant credit underwriting.”
Buzz Cooper, Chief Executive Officer and President

Costs, margins and fees

Operating and other expenses fell: Total operating expenses were $25.2 million, down 4.3%. Other expense, net was $9.7 million, down 17.2%, as shown in the summary table. Source
Lower net incentive fee helped: Core FFO was partly offset by a lower net incentive fee in the current period, and interest expense fell as fees written off in the prior period did not recur. Source
Gain on sale excluded from FFO: The FFO reconciliation removes a $1.8 million gain on sale of real estate, net, recorded in the quarter. The prior quarter had no such gain. Source

Capital, debt and distributions

Debt balance down $7.1 million: Mortgage notes, revolver, term loan and senior notes totaled $836.4 million, down $7.1 million from year-end 2025. Total equity and mezzanine equity was $333.6 million. Source
Mortgage debt repaid and extended: The company repaid $1.5 million of fixed-rate mortgage debt at a 6.58% weighted average rate. It also extended $7.8 million of swapped mortgage debt at 3.78% for one additional year. Source
Distributions held at prior level: The company paid $0.30 per share on common stock and OP units for the quarter. Preferred and senior common distributions were also paid at the same amounts as the prior quarter. Source

“We have collected 100% of the first quarter's cash rents and 100% of April cash rents.”
Buzz Cooper, Chief Executive Officer and President

Strategy and capital recycling

Capital recycling continues: Management said the company will keep selling non-core assets and using the proceeds to reduce debt and buy properties in target growth markets. Source
Industrial focus in target markets: The company said it will keep investing mainly in its target markets, with an emphasis on industrial properties, and keep actively managing the portfolio. Source
Land parcel sold for $2.0 million: The company sold a portion of a land parcel for $2.0 million. The prior release listed the same sale as a post-year-end event. Source

Economic conditions and tenants

Inflation and rate challenges expected: Management said it expects challenges from inflation, a corresponding rise in interest rates, and geo-political and economic issues. Source
Tenant credit underwriting cited: Management said it feels firmly about the depth of its tenant credit underwriting and anticipates tenants will keep operating as economic conditions normalize. Source
Capital access expected as needed: Management expects continued access to debt and equity markets as needed for added liquidity. Source

Figures management reported

Figure	Reported
Properties owned Source	151
Square feet owned Source	17,675,963
Square feet leased Source	98.7%
Square feet leased or renewed in the quarter Source	805,622

Risks management discussed

External: Management expects challenges from inflation and a corresponding rise in interest rates, along with geo-political and economic issues. Source
Demand: The company still has remaining vacant space to lease. Square feet leased fell to 98.7% from 99.1% at year-end 2025. Source

Earlier plans management reported on

Not stated: The prior release anticipated selling additional non-core assets over the next one to two years. This release does not state a status for those sales.
Met: Management stated the company has never skipped or deferred a distribution since its inception in 2003.

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Gladstone Commercial Corporation Reports Results for the First Quarter Ended March 31, 2026

Please note that the limited information that follows in this press release is not adequate to make an informed investment judgment.

MCLEAN, VA, May 5, 2026 (ACCESSWIRE) -- Gladstone Commercial Corporation (Nasdaq: GOOD) ("Gladstone Commercial" or the "Company") today reported financial results for the first quarter ended March 31, 2026. A description of funds from operations, or FFO, and Core FFO, both non-GAAP (generally accepted accounting principles in the United States) financial measures, are located at the end of this press release. All per share references are to fully-diluted weighted average shares of common stock and Non-controlling OP Units, unless otherwise noted. For further detail, please also refer to both the quarterly financial supplement and the Company's Quarterly Report on Form 10-Q, which can be retrieved from the Investors section of our website at www.gladstonecommercial.com.

Summary Information (dollars in thousands, except share and per share data):

	As of and for the three months ended
	March 31, 2026	December 31, 2025	$ Change	% Change
Operating Data:
Total operating revenue	$41,909	$43,461	$(1,552)	(3.6)%
Total operating expenses	(25,243)	(26,367)	1,124	(4.3)%
Other expense, net	(9,694)	(11,712)	2,018	(17.2)%
Net income	$6,972	$5,382	$1,590	29.5%
Less: Dividends attributable to preferred stock	(3,042)	(3,048)	6	(0.2)%
Less: Dividends attributable to senior common stock	(98)	(102)	4	(3.9)%
Add: Gain on extinguishment of Series F preferred stock, net	4	5	(1)	(20.0)%
Net income available to common stockholders and Non-controlling OP Unitholders	$3,836	$2,237	$1,599	71.5%
Add: Real estate depreciation and amortization	14,796	15,482	(686)	(4.4)%
Less: Gain on sale of real estate, net	(1,783)	-	(1,783)	(100.0)%
Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic	$16,849	$17,719	$(870)	(4.9)%
Add: Convertible senior common distributions	98	102	(4)	(3.9)%
Funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted	$16,947	$17,821	$(874)	(4.9)%
Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic	$16,849	$17,719	$(870)	(4.9)%
Add: Asset retirement obligation expense	37	36	1	2.8%
Add: Realized loss on interest rate hedging instruments	29	-	29	100.0%
Core funds from operations available to common stockholders and Non-controlling OP Unitholders - basic	$16,915	$17,755	$(840)	(4.7)%
Add: Convertible senior common distributions	98	102	(4)	(3.9)%
Core funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted	$17,013	$17,857	$(844)	(4.7)%
Share and Per Share Data:
Net income available to common stockholders and Non-controlling OP Unitholders - basic and diluted	$0.08	$0.05	$0.03	60.0%
FFO available to common stockholders and Non-controlling OP Unitholders - basic	$0.35	$0.37	$(0.02)	(5.4)%
FFO available to common stockholders and Non-controlling OP Unitholders - diluted	$0.35	$0.37	$(0.02)	(5.4)%
Core FFO available to common stockholders and Non-controlling OP Unitholders - basic	$0.35	$0.37	$(0.02)	(5.4)%

Core FFO available to common stockholders and Non-controlling OP Unitholders - diluted	$0.35		$0.37		$(0.02)	(5.4)%
Weighted average shares of common stock and Non-controlling OP Units outstanding - basic	48,446,467		48,442,596		3,871	- %
Weighted average shares of common stock and Non-controlling OP Units outstanding - diluted	48,768,782		48,764,911		3,871	- %
Cash dividends declared per common share and Non-controlling OP Unit	$0.30		$0.30		$ -	- %
Financial Position
Real estate, before accumulated depreciation	$1,404,695	(1)	$1,402,640	(2)	$2,055	0.1%
Total assets	$1,230,988		$1,246,933		$(15,945)	(1.3)%
Mortgage notes payable, net, borrowings under revolver, borrowings under term loan, net, and senior unsecured notes, net	$836,385		$843,466		$(7,081)	(0.8)%
Total equity and mezzanine equity	$333,633		$341,933		$(8,300)	(2.4)%
Properties owned	151	(1)	151	(2)	-	- %
Square feet owned	17,675,963	(1)	17,675,963	(2)	-	- %
Square feet leased	98.7%		99.1%		(0.4)%	(0.4)%

(1)Includes one property classified as held for sale of $12.0 million and 161,458 square feet.

(2)Includes one property and a portion of a land parcel classified as held for sale of $12.2 million and 161,458 square feet, in the aggregate.

First Quarter Activity:

Collected 100% of cash rents: Collected 100% of cash rents due during January, February, and March;
Sold properties: Sold a portion of a land parcel for $2.0 million;
Completed leasing activity: Leased or renewed 805,622 square feet with remaining lease terms ranging from 0.7 years to 6.0 years at five of our properties;
Repaid debt: Repaid $1.5 million in fixed rate mortgage debt at a weighted average interest rate of 6.58%;
Extended mortgage debt maturity date: Extended the maturity date of $7.8 million swapped to fixed rate mortgage debt with an interest rate of 3.78% for an additional year; and
Paid distributions: Paid monthly cash distributions for the quarter totaling $0.30 per share on our common stock and Non-controlling OP Units, $0.414063 per share on our Series E Preferred Stock, $0.375 per share on our Series F Preferred Stock, $0.375 per share on our Series G Preferred Stock, and $0.2625 per share on our senior common stock.

First Quarter 2026 Results: Core FFO available to common shareholders and Non-controlling OP Unitholders for the three months ended March 31, 2026 was $17.0 million, a 4.7% decrease when compared to the three months ended December 31, 2025, equaling $0.35 per share. Core FFO decreased primarily due to a lease termination fee and proceeds from an easement settlement recognized in the prior period, partially offset by a lower net incentive fee in the current period and a decrease in interest expense from deferred financing fees written off in the prior period as part of the credit facility recast.

Net income available to common stockholders and Non-controlling OP Unitholders for the three months ended March 31, 2026 was $3.8 million, or $0.08 per share, compared to net income available to common stockholders and Non-controlling OP Unitholders for the three months ended December 31, 2025 of $2.2 million, or $0.05 per share. In the Summary Information table above, we provide a reconciliation of Core FFO to net income (which we believe is the most directly comparable GAAP measure to Core FFO) for the three months ended March 31, 2026 and December 31, 2025, a computation of basic and diluted Core FFO per weighted average share of common stock and Non-controlling OP Unit, and basic and diluted net income per weighted average share of common stock and Non-controlling OP Unit.

Subsequent to the end of the quarter:

Collected 100% of April cash rents: Collected 100% of cash rents due in April;
Declared distributions: Declared monthly cash distributions for April, May, and June 2026, totaling $0.30 per share on our common stock and Non-controlling OP Units, $0.414063 per share on our Series E Preferred Stock, $0.375 per share on our Series F Preferred Stock, $0.375 per share on our Series G Preferred Stock, and $0.2625 per share on our senior common stock.

Comments from Gladstone Commercial’s Chief Executive Officer and President, Buzz Cooper: "Our financial results reflect consistent performance and stabilized revenues from our tremendous same store property occupancy, rent collection and growth, accretive real estate investments, and our ability to renew tenants. We plan to continue our capital recycling program, whereby we sell non-core assets and use the proceeds to de-lever our portfolio, as well as to acquire properties in our target growth markets. We will continue to opportunistically sell non-core assets and redeploy the proceeds into stronger target growth markets with a focus on industrial investment opportunities. While we expect to face challenges due to inflation, with a corresponding increase in interest rates, and various geo-political and economic issues, we feel strongly about the depth of our tenant credit underwriting. We have collected 100% of the first quarter's cash rents and 100% of April cash rents. We anticipate our tenants will successfully navigate the current economic climate and will be able to continue operating successfully when economic normalcy returns fully. Despite economic uncertainty, so far during 2026, we leased or renewed 805,622 square feet with five tenants. We are actively marketing our remaining vacant space and currently anticipate positive outcomes. We expect to continue to have access to the debt and equity markets, as necessary, for added liquidity. We believe our same store rents, which have increased by 2% or greater annually in recent years, should continue to rise as we grow, and we will continue to primarily focus on investing in our target markets, with an emphasis on industrial properties and actively managing our portfolio."

Conference Call: Gladstone Commercial will hold a conference call on Wednesday, May 6, 2026, at 8:30 a.m. Eastern Time to discuss its earnings results. Please call (877) 407-9045 to enter the conference call. An operator will monitor the call and set a queue for questions. A conference call replay will be available beginning one hour after the call and will be accessible through May 13, 2026. To hear the replay, please dial (877) 660-6853 and use playback conference number 13759086. The live audio broadcast of the Company's quarterly conference call will also be available on the investors section of our website, www.gladstonecommercial.com.

About Gladstone Commercial: Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Further information can be found at www.gladstonecommercial.com.

About the Gladstone Companies: Information on the business activities of the Gladstone family of funds can be found at www.gladstonecompanies.com.

Investor Relations: For Investor Relations inquiries related to any of the monthly distribution-paying Gladstone family of funds, please visit www.gladstonecompanies.com.

Non-GAAP Financial Measures:

FFO: The National Association of Real Estate Investment Trusts (“NAREIT”) developed FFO as a relative non-GAAP supplemental measure of operating performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO, as defined by NAREIT, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and impairment losses on property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. FFO does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of its performance or to cash flow from operations as a measure of liquidity or ability to make distributions. The Company believes that FFO per share provides investors with an additional context for evaluating its financial performance and as a supplemental measure to compare it to other REITs; however, comparisons of its FFO to the FFO of other REITs may not necessarily be meaningful due to potential differences in the application of the NAREIT definition used by such other REITs.

Core FFO: Core FFO is FFO adjusted for certain items that are not indicative of the results provided by the Company’s operating portfolio and affect the comparability of the Company’s period-over-period performance. These items include the adjustment for acquisition related expenses, gains or losses from early extinguishment of debt and any other non-recurring expense adjustments. Although the Company’s calculation of Core FFO differs from NAREIT’s definition of FFO and may not be comparable to that of other REITs, the Company believes it is a meaningful supplemental measure of its operating performance. Accordingly, Core FFO should be considered a supplement to net income computed in accordance with GAAP as a measure of our performance.

The Company’s presentation of FFO, as defined by NAREIT, or presentation of Core FFO, does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of its performance or to cash flow from operations as a measure of liquidity or ability to make distributions.

Forward-looking statements notice

The statements in this press release regarding the forecasted stability of Gladstone Commercial’s income, its ability, plans or prospects to re-lease its unoccupied properties, and grow its portfolio are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on Gladstone Commercial’s current plans that are believed to be reasonable as of the date of this press release. Factors that may cause actual results to differ materially from these forward-looking statements include, but are not limited to, Gladstone Commercial’s ability to raise additional capital; availability and terms of capital and financing, both to fund its operations and to refinance its indebtedness as it matures; downturns in the current economic environment; the performance of its tenants; the impact of competition on its efforts to renew existing leases or re-lease space; and significant changes in interest rates. Additional factors that could cause actual results to differ materially from those stated or implied by its forward-looking statements are disclosed under the caption "Risk Factors" of its Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC on February 18, 2026, and other reports filed with the SEC. Gladstone Commercial cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Gladstone Commercial undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contacts
Gladstone Commercial Corporation
(703) 287-5893