DALLAS, TX -- February 20, 2026 -- Gladstone Commercial Corp. (NasdaqGS: GOOD): Stonegate Capital Partners Updates Coverage on Gladstone Commercial Corp. (NasdaqGS: GOOD). In the fourth quarter of 2025, Gladstone Commercial Corp. maintained its disciplined portfolio management approach. The Company ended the quarter with 151 properties across 27 states, comprised of 17.7M square feet of rentable space. During FY25, GOOD executed its capital recycling strategy by selling two non-core properties, for an aggregate amount of $8.0M and completed the sale transaction on one non-core industrial property for $18.5M. Additionally, the Company expanded its portfolio in FY25 by acquiring 19 fully-occupied properties, with an aggregate of ~1.57M square feet for $206.7M, at a cap rate of 8.88%. These moves underscore GOOD’s ongoing emphasis on industrial assets while maintaining liquidity and reducing exposure to non-core properties.
Strengthened Liquidity and Capital Resources: Gladstone reported total liquidity of approximately $73.6M in 4Q25, consisting of $10.8M in cash and cash equivalents and $62.8M in borrowing capacity under its revolving credit facility. This liquidity position represents an increase from last year. As of this report the Company has upsized its credit facility and established a new term loan, providing for sufficient liquidity. The Company has sold 4.4M shares of common stock via the ATM program, raising net proceeds of $61M. These measures reflect the company’s approach to maintaining flexibility.
Fundamentals Remain Strong: GOOD continues to demonstrate strong operational fundamentals, maintaining a high occupancy rate of 99.1% as of 4Q25, remaining strong from 3Q25 and up from 4Q24. The Company also reported 100% cash rent collection in the quarter, showcasing its stable tenant base and strong leasing activity. Renewal and Leasing activity remained stable in 4Q25 despite broader economic uncertainty, with 2 properties seeing leasing and renewal activity. The portfolio’s weighted average lease term was 7.3 years, reflecting the Company’s ability to secure long-term leases.
Quarterly Results: GOOD reported revenue, FFO per share, and AFFO per share of $43.5M, $0.37, and $0.25, respectively. This compares to our/consensus estimates of $39.0M/$41.2M, $0.32/$0.36, and $0.22/$0.27.
Improving Diversification: GOOD continues its strategic shift toward industrial properties, reducing exposure to office assets. As of 4Q25, the Company’s portfolio composition, based on annualized straight-line rent, consisted of 69% industrial properties and 28% office properties, maintaining its trajectory from the previous quarter and up from 63% industrial assets at year-end FY24. The shift underscores the Company’s focus on acquiring resilient, long-duration, single-tenant net lease industrial properties, with our expectation that the company will be 70%+ industrial properties by FY26 end.
Payout Ratios: The Company currently pays an 10.0% dividend yield, paying out an annualized $1.20 per share. Based on a 4Q25 per share values for FFO of $0.37, Core FFO of $0.37, and AFFO of $0.25 GOOD has payout ratios of 82.1%, 81.9%, and 119.2% respectively.
Valuation: We use a combination of comp analysis, Revalued NAV (reNAV) per share analysis, and a Perpetual Growth Model based on the most recent FFO Payout Ratio to frame our valuation of GOOD. When we average these valuation methods it returns a valuation range of $12.60 to $14.47 with a midpoint of $13.53.
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