Earnings

Gladstone Commercial Swings to a Loss After Impairment

The Tip Desk · November 10, 2026 · 3 min read

Core FFO fell 7.8% to $0.35 a share as higher property expenses, interest expense and a prior-period lease termination fee weighed on results.

Gladstone Commercial Corporation (GOOD) reported a net loss of $2.06 million for the three months ended September 30, 2026, after a $6.5 million impairment charge on one property and a 3.6% sequential drop in operating revenue.

Net loss attributable to common stockholders and Non-controlling OP Unitholders was $5.2 million, or $0.11 a share.

The net-lease industrial and office REIT had posted $8.27 million of net income in the three months ended June 30, 2026. Net income available to common stockholders and Non-controlling OP Unitholders was $5.1 million, or $0.11 a share. Total operating revenue was $42.42 million, reversing a 5.0% sequential increase in the prior quarter.

The impairment lifted total operating expenses 25.5% to $32.92 million from $26.24 million. Other expense, net rose 22.0% to $11.57 million from $9.48 million.

Core funds from operations available to common stockholders and Non-controlling OP Unitholders declined 7.8% sequentially to $16.9 million, or $0.35 a share, from $18.3 million, or $0.38 a share, after a 7.7% sequential rise in the prior quarter. The company attributed the Core FFO decline primarily to higher property expenses, higher interest expense from a rising SOFR rate, and a lease termination fee recognized on a property sold in the prior period, partially offset by lower general and administrative expenses and a lower net incentive fee.

Monthly cash distributions remained $0.30 per common share and Non-controlling OP Unit, matching the prior quarter.

The company purchased one fully-occupied industrial property of 146,650 square feet for $6.6 million at a 9.16% cap rate, taking properties owned to 152 from 151 and square feet owned to 17.82 million from 17.67 million. Square feet leased rose to 99.3% from 98.7%.

Leasing activity leased or renewed 502,557 square feet at four properties with remaining terms of 5.5 to 20.0 years. Through the third quarter of 2026 the company leased or renewed 1,468,614 square feet with 12 tenants. It collected 100% of cash rents due during July, August and September.

The company issued 168,868 shares under its at-the-market program for $2.2 million of net proceeds, lifting basic weighted average shares to 48.51 million from 48.45 million. Mortgage notes payable, revolver, term loan and senior unsecured notes rose 0.7% to $858.27 million from $852.05 million. Total equity and mezzanine equity fell 2.9% to $318.10 million from $327.53 million.

Subsequent to quarter-end the company repaid $10.2 million of fixed-rate mortgage debt at 4.25% and renewed 522,521 square feet at three properties with remaining terms of 3.6 to 5.1 years. It collected 100% of October cash rents and declared monthly cash distributions for October, November and December totaling $0.30 per share on common stock and Non-controlling OP Units.

Chief Executive Officer and President Buzz Cooper said the company plans to continue its capital recycling program, selling non-core assets to de-lever the portfolio and acquire properties in target growth markets, with a focus on industrial investment opportunities. The company said it expects to continue to have access to the debt and equity markets, as necessary, for added liquidity.

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