GOODN - Gladstone Commercial: Glad To Pick Up The Series E

2024-02-05 07:59:50 ET

Summary

• Gladstone Commercial Corporation has a diversified portfolio of industrial and office properties.
• We consider the Series E preferred stock as the safest and most attractive option among Gladstone's listed securities.
• The Series E preferred stock offers a potential ~37% IRR and ~1.23x MOIC if redeemed in October and is well covered, detaching through ~12% cap rate / ~9x adj. FFO.

Summary / Overview

Gladstone Commercial Corporation ( GOOD ) is a diversified REIT with ~17.2MM sqft of GLA across 135 industrial and office properties. In this report, we look at the Series E and G preferred stocks and discuss why we think the Series E are the safest and most attractive option among Gladstone's listed securities. Current prices imply a ~37% IRR / ~1.23x MOIC if redeemed in October. If the redemption does not come to fruition or is delayed, we gain comfort on the asset coverage through the preferred (n.b., detaching through ~65% of LTV based on market values for the common and through a ~12.3% cap rate / ~9x adj. FFO), and sufficient cash flow to support the distribution. ...

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