Gladstone Commercial Corporation reported a net income of $24.0 million for the fiscal year ending December 31, 2024, a significant increase from $4.9 million in the previous year. This growth was primarily driven by a reduction in impairment charges and an increase in gains from real estate sales, which rose to $14.2 million compared to $7.7 million in 2023. Total operating revenues increased by 1.2% to $149.4 million, with lease revenue contributing $149.4 million, reflecting a steady demand for the company's industrial and office properties.
The company’s financial performance showed notable improvements in several areas compared to the previous fiscal year. Operating expenses decreased by 11.5% to $102.8 million, largely due to lower depreciation and amortization costs, as well as a significant reduction in impairment charges from $19.3 million in 2023 to $6.8 million in 2024. The funds from operations (FFO) available to common stockholders and non-controlling OP unitholders increased slightly to $59.2 million, with FFO per share at $1.41, down from $1.46 in the prior year.
Strategically, Gladstone Commercial continued its capital recycling program, selling seven non-core properties during 2024 and acquiring seven new properties, which totaled approximately $27.4 million. The company’s portfolio now consists of 135 properties across 27 states, with an occupancy rate of 98.7% and an average remaining lease term of 6.9 years. The company also maintained a strong liquidity position, with $101.7 million available as of December 31, 2024, which includes cash and borrowing capacity under its revolving credit facility.
Operationally, the company reported a diverse tenant base, with no significant exposure to high-risk sectors such as retail and hospitality. The five largest tenants accounted for approximately 16.9% of total lease revenue, indicating a well-distributed risk profile. The company’s proactive management approach has allowed it to collect 100% of all outstanding base rent for the year, underscoring the effectiveness of its credit underwriting and asset management teams.
Looking ahead, Gladstone Commercial remains optimistic about its growth trajectory, focusing on acquiring additional industrial properties and managing lease expirations effectively. The company anticipates continued demand for its properties, particularly in light of ongoing trends in the industrial sector and a modest recovery in the office market. However, it acknowledges potential challenges related to interest rate fluctuations and market conditions, which could impact its financing and operational strategies.
About GLADSTONE COMMERCIAL CORP
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