Gladstone Commercial's Q3 Core FFO falls on higher expenses

Overview

• US REIT's Q3 operating revenue fell 3.6% from prior quarter

• Core FFO per share for Q3 declined 7.9% sequentially to $0.35

• Core FFO decline driven by higher property and interest expenses, and lease termination fee

Outlook

• Company plans to continue selling non-core assets and acquiring properties in target growth markets

• Company expects challenges from inflation, higher interest rates, and economic uncertainty

• Company anticipates same store rents to continue rising as portfolio grows

Result Drivers

• HIGHER EXPENSES - Increased property and interest expenses, as well as a lease termination fee, drove Core FFO decline

• IMPAIRMENT CHARGE - Co recorded a $6.5 mln impairment charge on one property in Q3

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the diversified reits peer group is "buy"

• Wall Street's median 12-month price target for Gladstone Commercial Corp is $14.16, about 22.3% above its November 2 closing price of $11.58

• The stock recently traded at 56 times the next 12-month earnings vs. a P/E of 58 three months ago

Reuters Recommended Reads

• Nov 3 - Gladstone Commercial Q3 revenue slightly misses on higher property expenses

• Nov 2 - Realty Income's Q3 revenue beats; raises 2026 AFFO per share outlook

• Nov 2 - Independence Realty Trust Q3 adjusted EBITDA beats estimates; reaffirms FY guidance

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)