Gladstone mercial (US:GOOD)2022-11-07 21:51Property Management - As of November 7, 2022, the company owned 137 properties totaling 17.2 million square feet of rentable space, with an occupancy rate of 96.3%[117] - The company has seven partially vacant buildings and three fully vacant buildings, with available vacant space representing 3.1% of total square footage[125] - The annual carrying costs on the vacant space are approximately $3.8 million[125] - The company continues to focus on re-leasing vacant space and renewing upcoming lease expirations[124] - The company acquired 11 industrial properties during the same period, totaling 1,105,006 square feet with a weighted average lease term of 13.8 years and an aggregate purchase price of $98.276 million[130] - Texas generated $15.97 million in lease revenue, representing 14.3% of total lease revenue for the nine months ended September 30, 2022[147] Financial Performance - Total lease revenue for the nine months ended September 30, 2022, was $111.8 million, compared to $102.4 million for the same period in 2021, reflecting a year-over-year increase[147] - Lease revenue for Q3 2022 was $39,834,000, an increase of 16.0% from $34,334,000 in Q3 2021[161] - Total operating revenues for Q3 2022 were $39,834,000, up by $5,500,000 or 16.0% compared to Q3 2021[161] - Total operating revenues for the nine months ended September 30, 2022, increased by $9,383 thousand, or 9.2%, to $111,764 thousand compared to $102,381 thousand in 2021[163] - Net income for Q3 2022 was $2,497,000, a decrease of 44.5% from $4,498,000 in Q3 2021[161] - Net income for the nine months ended September 30, 2022, was $7,459 thousand, an increase of $802 thousand, or 12.0%, compared to $6,657 thousand in 2021[163] Debt and Financing - During the nine months ended September 30, 2022, the company repaid 13 mortgages totaling $97.843 million at an average interest rate of 4.75%[133] - The company issued five mortgages totaling $41.313 million during the same period, with a weighted average interest rate of 4.39%[134] - The company increased its Credit Facility Revolver from $100.0 million to $125.0 million and added a new Term Loan C of $150.0 million, with a maturity date of February 18, 2028[139] - The company has approximately $636.5 million reserved for the sale of its 6.00% Series F Cumulative Redeemable Preferred Stock under its 2020 Universal Shelf[141] - The company had 44 mortgage notes payable totaling $370.3 million with a weighted average interest rate of 4.19% as of September 30, 2022[180] - As of September 30, 2022, the company had $377.8 million outstanding under its Credit Facility at a weighted average interest rate of approximately 4.43%[188] Funds from Operations (FFO) - Funds from Operations (FFO) available to common stockholders and Non-controlling OP Unitholders for Q3 2022 was $16,976,000, a 4.7% increase from $16,220,000 in Q3 2021[161] - FFO available to common stockholders and Non-controlling OP Unitholders plus assumed conversions for the nine months ended September 30, 2022, was $47,416,000, compared to $42,488,000 for the same period in 2021, indicating a year-over-year increase of 11.4%[197] - Basic FFO per weighted average share of common stock for the three months ended September 30, 2022, was $0.43, slightly down from $0.44 in the same period of 2021[197] Expenses and Impairments - Total operating expenses increased by 46.9% to $37,448,000 in Q3 2022 from $25,498,000 in Q3 2021[161] - Total operating expenses for the nine months ended September 30, 2022, increased by $13,544 thousand, or 17.5%, to $90,932 thousand compared to $77,388 thousand in 2021[163] - The company recorded an impairment charge of $12,092 thousand during the nine months ended September 30, 2022, due to properties being valued below their carrying amount[170] - Impairment charge for Q3 2022 was $10,718,000, representing a 100.0% increase from no impairment charge in Q3 2021[161] Interest Rates and Risk Management - The company aims to limit the impact of interest rate changes on earnings and cash flows by primarily borrowing at fixed rates or variable rates with the lowest margins available[205] - The company has entered into derivative contracts to cap interest rates for variable rate notes payable and has implemented interest rate swaps to manage interest rate risk[199] - A 1% increase in SOFR would result in a net decrease in net income of $1,561,000, while a 2% increase would decrease net income by $1,482,000[202] - A 2% decrease in SOFR would result in a net income increase of $4,720 thousand, while a 1% decrease would increase net income by $2,638 thousand[202] - The company is monitoring the transition from LIBOR to SOFR and believes there may be minimal impact on its variable rate debt[205] Liquidity and Capital - Available liquidity as of September 30, 2022, was $69.5 million, consisting of approximately $13.5 million in cash and cash equivalents and $56.0 million in available borrowing capacity under the Credit Facility[175] - The company has the ability to raise up to $648.3 million in additional equity capital through the 2020 Universal Shelf, with $621.3 million reserved for Series F Preferred Stock sales[179] - The company anticipates being able to refinance $66.1 million of mortgage debt due in 2023 with new mortgage debt and additional equity securities[181] Management and Controls - As of September 30, 2022, the company's disclosure controls and procedures were evaluated as effective by management[207] - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended September 30, 2022[208]