Gladstone Commercial Corp.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 3 November 2026: press release. Guidance figures: 1 kept. The quarter’s numbers.

Key takeaways

Core FFO fell 7.8% to $0.35: Core FFO available to common stockholders and Non-controlling OP Unitholders was $16.9 million, down 7.8% from the second quarter, equal to $0.35 per share. Source
Net loss against prior-quarter income: Net loss attributable to common stockholders and OP Unitholders was $5.2 million, or $0.11 per share, compared with net income of $5.1 million, or $0.11 per share, in the second quarter. Source
Leased or renewed 502,557 square feet: Leasing covered 502,557 square feet at four properties, with remaining lease terms from 5.5 years to 20.0 years. Source
Collected 100% of cash rents: The company collected 100% of cash rents due in July, August and September, and 100% of October cash rents after quarter end. Source
Capital recycling to continue: Management said it will keep selling non-core assets, using proceeds to de-lever and to buy properties in target growth markets. 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
Common distribution Source	October to December 2026	$0.30 per share	Kept

What changed from last quarter

New: A $6.5 million impairment charge was recognized on one property this quarter. The second-quarter table showed no impairment charge. Source
New: After quarter end the company repaid $10.2 million of fixed rate mortgage debt at an interest rate of 4.25%. Source

Quarter results and FFO

Revenue fell 3.6% quarter on quarter: Total operating revenue was $42.4 million, down $1.6 million or 3.6% from $44.0 million in the second quarter. Source
Core FFO fell 7.8% to $0.35: Core FFO available to common stockholders and Non-controlling OP Unitholders was $16.9 million, down 7.8% from the second quarter, equal to $0.35 per share. Source
Net loss against prior-quarter income: Net loss attributable to common stockholders and OP Unitholders was $5.2 million, or $0.11 per share, compared with net income of $5.1 million, or $0.11 per share, in the second quarter. Source
Lower G&A and incentive fee offset: Lower general and administrative expenses and a lower net incentive fee partly offset the Core FFO decline, according to management. Source

Portfolio and leasing

Acquired industrial property at 9.16% cap rate: The company bought one fully occupied industrial property of 146,650 square feet for $6.6 million, at a 9.16% cap rate. Source
Leased or renewed 502,557 square feet: Leasing covered 502,557 square feet at four properties, with remaining lease terms from 5.5 years to 20.0 years. Source
Occupancy and portfolio size at quarter end: The company owned 152 properties and 17.8 million square feet at September 30, up from 151 properties and 17.7 million square feet at June 30. Source
Year-to-date leasing reached 1.47 million square feet: Through the third quarter the company leased or renewed 1,468,614 square feet with 12 tenants, against 966,057 square feet with eight tenants through the second quarter. 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

Rent collection and tenants

Collected 100% of cash rents: The company collected 100% of cash rents due in July, August and September, and 100% of October cash rents after quarter end. Source
Same-store rent growth of about 2% a year: Management said same store rents have increased by 2% or greater annually in recent years, and expects them to keep rising as the company grows. Source
Renewals after quarter end: After quarter end the company renewed 522,521 square feet at three properties, with remaining lease terms of 3.6 to 5.1 years. Source

Costs, interest and Core FFO drivers

Operating expenses rose 25.5%: Total operating expenses were $32.9 million, up $6.7 million or 25.5% from $26.2 million in the second quarter, including the impairment charge. Source
Higher property expenses reduced Core FFO: Management cited higher property expenses as the main driver of the Core FFO decrease. Source
Higher interest expense from SOFR: Interest expense rose because the SOFR rate increased, and management named this as a cause of the Core FFO decline. Source

“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.”
Buzz Cooper, Chief Executive Officer and President

Capital, debt and equity

Debt balance rose $6.2 million: Mortgage notes, revolver, term loan and senior unsecured notes totaled $858.3 million, up $6.2 million from $852.1 million at June 30. Source
ATM program raised $2.2 million: The company issued 168,868 common shares under its at-the-market program for net proceeds of $2.2 million during the quarter. Source
Total equity declined $9.4 million: Total equity and mezzanine equity was $318.1 million at September 30, down $9.4 million from $327.5 million at June 30. Source

Capital recycling and portfolio focus

Capital recycling to continue: Management said it will keep selling non-core assets, using proceeds to de-lever and to buy properties in target growth markets. Source
No sale listed this quarter: The second quarter included the sale of one industrial property for $12.9 million; the third quarter activity list shows no sale.
Industrial focus and portfolio management: The company said it will keep investing in target markets with an emphasis on industrial properties and active portfolio management. Source

Coming up, as management said on 3 November 2026

Marketing remaining vacant space: Management said it is actively marketing the remaining vacant space and currently anticipates positive outcomes. Source
Continued access to capital markets: Management expects continued access to the debt and equity markets, as needed, for added liquidity. Source

Figures management reported

Figure	Reported
Properties owned Source	152
Square feet owned Source	17,816,521
Square feet leased Source	99.3%

Risks management discussed

External: Management expects challenges from inflation, higher interest rates and geopolitical and economic issues. Source
Financial: The SOFR rate increase raised interest expense, which reduced Core FFO in the quarter. Source
Financial: A $6.5 million impairment charge was recognized on one property during the quarter. Source
Operational: Higher property expenses were the main driver of the Core FFO decrease, according to management. Source
Demand: Some space remains vacant, and the company is marketing it for lease. Source

Earlier plans management reported on

Not stated: Management stated a plan to continue the capital recycling program, selling non-core assets and redeploying proceeds. Source

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 Third Quarter Ended September 30, 2026

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

MCLEAN, VA, November 3, 2026 (ACCESSWIRE) -- Gladstone Commercial Corporation (Nasdaq: GOOD) ("Gladstone Commercial" or the "Company") today reported financial results for the third quarter ended September 30, 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
	September 30, 2026		June 30, 2026	$ Change	% Change
Operating Data:
Total operating revenue	$42,419		$43,989	$(1,570)	(3.6)%
Total operating expenses	(32,915)	(1)	(26,237)	(6,678)	25.5%
Other expense, net	(11,567)		(9,482)	(2,085)	22.0%
Net (loss) income	$(2,063)		$8,270	$(10,333)	(124.9)%
Less: Dividends attributable to preferred stock	(3,032)		(3,036)	4	(0.1)%
Less: Dividends attributable to senior common stock	(100)		(99)	(1)	1.0%
Add/Less: Gain (loss) on extinguishment of Series F preferred stock, net	2		(7)	9	(128.6)%
Net (loss) income (attributable) available to common stockholders and Non-controlling OP Unitholders	$(5,193)		$5,128	$(10,321)	(201.3)%
Add: Real estate depreciation and amortization	15,435		14,957	478	3.2%
Add: Impairment charge	6,518		-	6,518	100.0%
Less: Gain on sale of real estate, net	-		(1,894)	1,894	(100.0)%
Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic	$16,760		$18,191	$(1,431)	(7.9)%
Add: Convertible senior common distributions	100		99	1	1.0%
Funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted	$16,860		$18,290	$(1,430)	(7.8)%
Funds from operations available to common stockholders and Non-controlling OP Unitholders - basic	$16,760		$18,191	$(1,431)	(7.9)%
Add: Asset retirement obligation expense	39		37	2	5.4%
Core funds from operations available to common stockholders and Non-controlling OP Unitholders - basic	$16,799		$18,228	$(1,429)	(7.8)%
Add: Convertible senior common distributions	100		99	1	1.0%
Core funds from operations available to common stockholders and Non-controlling OP Unitholders - diluted	$16,899		$18,327	$(1,428)	(7.8)%
Share and Per Share Data:
Net (loss) income (attributable) available to common stockholders and Non-controlling OP Unitholders - basic and diluted	$(0.11)		$0.11	$(0.22)	(200.0)%
FFO available to common stockholders and Non-controlling OP Unitholders - basic	$0.35		$0.38	$(0.03)	(7.9)%
FFO available to common stockholders and Non-controlling OP Unitholders - diluted	$0.35		$0.38	$(0.03)	(7.9)%
Core FFO available to common stockholders and Non-controlling OP Unitholders - basic	$0.35		$0.38	$(0.03)	(7.9)%

Core FFO available to common stockholders and Non-controlling OP Unitholders - diluted	$0.35	$0.38	$(0.03)	(7.9)%
Weighted average shares of common stock and Non-controlling OP Units outstanding - basic	48,507,694	48,446,593	61,101	0.1%
Weighted average shares of common stock and Non-controlling OP Units outstanding - diluted	48,829,501	48,768,526	60,975	0.1%
Cash dividends declared per common share and Non-controlling OP Unit	$0.30	$0.30	$ -	- %
Financial Position
Real estate, before accumulated depreciation	$1,427,631	$1,418,722	$8,909	0.6%
Total assets	$1,245,747	$1,242,968	$2,779	0.2%
Mortgage notes payable, net, borrowings under revolver, borrowings under term loan, net, and senior unsecured notes, net	$858,271	$852,050	$6,221	0.7%
Total equity and mezzanine equity	$318,104	$327,525	$(9,421)	(2.9)%
Properties owned	152	151	1	0.7%
Square feet owned	17,816,521	17,669,871	146,650	0.8%
Square feet leased	99.3%	98.7%	0.6%	0.6%

(1)Includes a $6.5 million impairment charge recognized on one property during the three months ended September 30, 2026.

Third Quarter Activity:

Collected 100% of cash rents: Collected 100% of cash rents due during July, August, and September;
Acquired property: Purchased one fully-occupied industrial property with 146,650 square feet of rental space, for $6.6 million and a cap rate of 9.16%;
Completed leasing activity: Leased or renewed 502,557 square feet with remaining lease terms ranging from 5.5 years to 20.0 years at four of our properties;
Issued common stock under ATM Program: Issued 168,868 shares of common stock under our at-the-market ("ATM") program for net proceeds of $2.2 million; 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.

Third Quarter 2026 Results: Core FFO available to common shareholders and Non-controlling OP Unitholders for the three months ended September 30, 2026 was $16.9 million, a 7.8% decrease when compared to the three months ended June 30, 2026, equaling $0.35 per share. Core FFO decreased primarily due to higher property expenses, higher interest expense due to the SOFR rate increasing, and a lease termination fee recognized on the property sold during the previous period. This was partially offset by lower general and administrative expenses and a lower net incentive fee in the current period.

Net loss attributable to common stockholders and Non-controlling OP Unitholders for the three months ended September 30, 2026 was $5.2 million, or $0.11 per share, compared to net income available to common stockholders and Non-controlling OP Unitholders for the three months ended June 30, 2026 of $5.1 million, or $0.11 per share. In the Summary Information table above, we provide a reconciliation of Core FFO to net (loss) income (which we believe is the most directly comparable GAAP measure to Core FFO) for the three months ended September 30, 2026 and June 30, 2026, 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 (loss) income per weighted average share of common stock and Non-controlling OP Unit.

Subsequent to the end of the quarter:

Collected 100% of October cash rents: Collected 100% of cash rents due in October;
Renewed space: Renewed 522,521 square feet with remaining lease terms ranging from 3.6 years to 5.1 years at three of our properties;
Repaid debt: Repaid $10.2 million in fixed rate mortgage debt at an interest rate of 4.25%; and
Declared distributions: Declared monthly cash distributions for October, November, and December 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 three quarters' cash rents and 100% of October 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, through the third quarter of 2026, we leased or renewed 1,468,614 square feet with 12 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, November 4, 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 November 11, 2026. To hear the replay, please dial (877) 660-6853 and use playback conference number 13762361. 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