GOOD Gladstone Commercial

David Gladstone Chairman & CEO
Mike Sodo CFO
Bob Cutlip President
Michael LiCalsi General Counsel and Secretary
Rob Stevenson Janney
Barry Oxford D.A. Davidson
Call transcript
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Good day, ladies and gentlemen and welcome to the Gladstone Commercial Corporation's First Quarter Ended March 31, 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to turn the conference over to David Gladstone, Chairman, you may begin.

David Gladstone

Nicole. you, Thank thanks this and of for you Nice to in morning. calling introduction all all we in open time by We on time area have are the enjoy that an Washington the called and you, if say DC we and McLean, ever with you in the are have stop wish had suburb talk invitation more located to to we but hello. you the phone you with Virginia,

them people buying the now. the here. There of are some of that of on doing most do are see new work the You'll members road Hopefully, estate. over they XX real

all First we'll and related Gladstone as and of concerning Counsel also legal public well. hear General companies President and a matters make regulatory He some Michael the to from today. Gladstone regarding Administration is call as brief report the our Michael and serves announcement is He funds Secretary. which will LiCalsi. administrator Michael? the

Michael LiCalsi

other and risk may under our and cause the future may our that factors expressed good from are we forward-looking any listed found Securities XXXX, our that or operations. regarding can these on events as to morning. those our Relations obligation our go of future documents factors all you statements, Many all SEC. website, of Thanks, the XXXX future revise on FFO on which depreciation on be Act Those involve funds in reasonable. assets. SEC's is whether discuss XX-Q, required which net results update a any will believe the plans, undertake from no statements, Investor file forward-looking or losses specifically We implied results term and the actual defined materially certain and and including new we which estate XX-K, statements otherwise, forward-looking of the Exchange current as including Act forward-looking based information, be the excluding by different is with a Today page by course. the any that's or forms income these or of as result the include Today's sale to of performance. be publicly accounting real to FFO, plus David if and website, except amortization of uncertainties losses Securities law real of and estate non-GAAP from property, is report to impairment risks we or statements These gains

and a for believe discuss We nonrecurring will of performance. revenue allows adjusted and results our of is and other our FFO period-over-period better also expenses this we comparability core generally certain FFO, is which better indication operating

again you website, service. We opportunity also email the ask take, to that our sign up notification for visit

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to the Bob Cutlip. time Gladstone over I'll hand Now back Commercial's President,

Bob Cutlip

Thanks Michael, morning good everyone.

events recently property the non-deal consultants. term over our a and in and hosted at capital Tewksbury, by feet two is rated Orlando Chicago, quarter in Ohio, and These adjacent Milwaukee, tenants multiple of Columbus, of and assembly include acquisition investment acquisition relations roadshows functions. activity Alabama; totaling Arlington, one industrial that Ohio; property at with Boston, new of vacant expansion our companies. in visits assembly X.XX% a assets by asset to million; City, $XX.X were management X.X%. favorite initiated growth acquisitions conducted These Texas; mine, significant Angeles, $XX.X parent in have Mercedes-Benz and industrial markets plant acquisitions investors Alabama property; and noteworthy of Maple During and the analysts of in and and rate average across Lake project the XX% investment-grade the Ohio notes raising XX,XXX an Mercedes-Benz These Orlando. or Massachusetts million tenants in investment-grade our existing and non-core office Salt mortgage invested two this Tampa rate were with in cap past repaid coverage eight in acquired potential fixed issued research Columbus sold Los Heights first mortgage $XXX Philadelphia, months we collateralized XX are to The leased by witnessed million debt million Vance, space investor square a they recent our in of previously volume plant $X.X we

maturing the six Raleigh, capital foot up renewed per lower We also a square at Carolina, as part and lower non-core extended at recast lease an term of revolver property and in refinanced rate and tenants million North rates. at of program; rental leverage recycling leases $XX.X exited increase five an gap industrial of of extended mortgages the costs; properties our our of office property X.X%; Houston; completed loan and expanded and in lower and interest

capital impacts distribution, We available leverage. cash to per and our these for course expect FFO on each positive of availability items of have share,

across successful all one these can to member team were our every achievements. contributors functions think conclude I also that

of our Some critics investors our payout challenge ratio. and on us

dividend While for of distribution have these true of FFO available our cash share excess exceeded per for payments time. XXX% some in amount, is

the leasing the also because which XX% mortgages, each to while However, improve XX%. leverage upon consistently improved required period a the expirations able required payout million share and lease balance acquired worth The XXXX terms were improvements for XXXX annual X.X%. significant this per that during range with average these $XXX capital of through the FFO profile to has increasing we the lease gap to the X volume $XXX ratio unexpired escalations, and equate acquisition accretive to maintain maturing significant addressing the we year. million, have These rate of even We deleveraging. been after plus those flow since since XX equity of and characteristics today's tenant rate credit currently lower average and assets with from cap characteristics lease for sheet XX overall is on every from noting. cash that year $X.XX are to to approximately years The while assets ratio year $X.XX investments improving commissions annual

which to are leases gap This perspective. a are the point rents ratio inflection at the be straight-line will approaching as the or rent payout straight-line exceeding time from these also shareholders rents by the We cash benefit the compared working of approaching period increased same-store lower position. our rents to should whereas continue capital basis same-store looking And quarter X%. the rents increased first the and first of quarter by approximately gap cash X.X% XXXX, to the of at at XXXX as

We momentum and continued to first quarter. acquired assembly Vance, the Mercedes-Benz Alabama. the during our acquisitions asset asset industrial Our management adjacent second plant in

to earlier, investment you and manufacturing As plant will increased has the recently be XXXX. models they I've at their two announced Mercedes-Benz beginning SUV noted around electric

Truck this average models Our the automated nine The the in over and square tire plans. of for increased existing number aside, and at Mercedes-Benz mostly with investment $XX.X of $XX Wheel that Wheel SUVs our provides fully operation cap manufactured their the acquisition Europe. approximately lease personally million three-quarter term rate and location. assemblies million as the in are has direct has over is wheel relationship foot year The and a XXX,XXX Truck result an invested property. And X.X% tenant an and is

properties million. program state sales and subject XX,XXX gain to $XX.X square basis quarter redeploy we leasing by our transactions occupancy the in current one The increased $X.X we target our plan of combined is of can Texas. a proceeds on rate important immediately property. increase net select We market also cap Arlington XX.X%. Tewksbury were conditions occupancy industrial also and were quarter, Ohio Heights, discuss. continue feet when in realized our our to These to non-core continue a million to of an recycling one The We the Massachusetts our during into Maple prices markets. capital this of collectively sold in end one at Two

have closings the And in appear with be quarter year industrial are quarterly exception XXXX. expected first the through of the a peaking first the noted that than market in lower decrease year-end last listings to trending did our fact XX% call, investment XXXX continue well. standpoint. overall researchers the was volume for forecast XXXX. volumes to XXXX volume lower during to as peaking reports properties, quarter sales X% reflect prices between cycle the as from ninth for be industry and softening noted by following than Published This current the As of Completing cycle, maybe compared of the sales of XXXX. to and

industry the trailing a reported for fact, the months research In pricing firm types for Advisors, that REIT overall their for index Green noted Street X%. all public product down is XX

that and are to points. guidance, originally low are to to much Now this promoted could appropriate rise forecasting potential a expected not overall disconnect for office transactions XXXX. higher note pricing as close are acquisition very market in similar XX and is with candidates as returning coming the as firms interest XXXX that indicative significant be the of is cap seeing were research is volume rates investment that seller-buyer XX rate It we failed with to It however still to months. on to basis

continue promote asset opportunities credit, Our and team growth and investigate properties market location to are monitor when accretive and returns our measured will will the actively strategy. conditions tenant acquire and

the opportunities which our operating our in about the the Before current for are I plus are order stage few XX pipeline set our pursuing, characteristics helps comments a strategy. address execution and over we months next

currently We lease year we occupied. balance for and are of the have the expirations no XX%

have For XXXX of forecasted rents we expiring. the X.X%

our candidates $XXX are this industrial. is million we and to at for have a XX on balance Therefore, and conscious our a stable $XX Of to of nearly pursuing the million averaged under have level. flow maturities XXXX this our properties initial effort growth of both growth strong pipeline industrial growing time XX same-store and Intent acquisition making strategy, should just team capital loan should addition, available for in very be $XX the our increase a and per Relating opportunities to cash our stage volume, XXXX in manageable Letter exceeding million continues and our initiatives. In which allocation. year total We're review. of properties is

believe industrial With XX,XXX with which middle to we fully XXX,XXX of to are be who non-rated competition tenant our parking capabilities that trailer is properties in properties, hand other are size, strategy well many in feet properties not tenants, several is The by proven underwriting underwrite replacement and our larger heights with larger the for square appropriate are credit on could focus and us. market, costs an clear parks the heated we in with occupied that larger trading for developed capabilities. markets we believe higher do going above

quarter activities well summary, our and refinanced and extended months and in positioned acquisition growth pursue first opportunities. success, continued our leasing So maturing XX our us loans, credit last facility, to

financial to the Now on for let's results. report turn over Mike it a

Mike Sodo

toward reviewing Good approximately this common quarter morning. basis, shares. All contributed completed are profitability The million help per are FFO I'll quarter the rents the of equates $XX.X a based I XXXX that growth over $XXX,XXX the share fully FFO to core common per average and us to by numbers increase totaling to forward. million or the to share respectively share available accretive to per core acquisitions $XX.X is going X% FFO quarter for weighted per On $X.XX and reference $X.XX this quarter. start continue operating our anticipated share. significantly stockholders the increase of end first prior from were additional were diluted and results. which a on from FFO core

fully industrial March we As and Bob only of vacant our acquired mentioned, in also property one disposed property. late

reflect results increase the to compared of quarter revenues period. $XX.X first expenses total operating million in $XX.X to operating million an Our for as total

Now debt let's activity take a look our and structure. capital at

our strong enhance balance our grow on we to as assets focus decreasing our continue leverage. and sheet We

XX% XXXX new to acquisitions the generally leverage debt and We financing gross levels. XX% at through since our refinancing debt have beginning assets lower reduced maturing to of by

We expect leverage decrease our the to XX next gradually XX over continue to to months.

investors, long-term. and this analysts, discussed us put we've forward the with this proper leverage going believe will at we level lenders, As

debt acquisitions. use We continue to primarily mortgage make long-term to

our unsecured we As our additional through time expand assets property to Over look increase disciplined high-quality well. will to pool grow as we'll alternatives. investments this financing

from one-month X.X% manage repaid sheet caps all LIBOR we with a months ranging plus rate million our $XXX.X interest swaps new the As new variable rate loans. at interest rates to spread variable over of rate debt balance past we primarily to long-term placed the mortgages have X.XX%. equal XX We on or

also our placement pool sheet whether of effort more our In under equity to an to order some we an permanent the have unencumbered or in We into line provide additional of these our future. properties put the in improve to debt credit disposition added advanced flexibility properties. balance refinanced often

has reducing those in this rates discussed, with million the and reduce to enabled thereby obtain previously helped As $X us rates leverage interest annually. mortgages lower dollars on excess our expense generally of interest significantly

mortgages at Looking XXXX due than quarter XXXX from we are until on maturities profile, two dates single end. our after very of have $XX.X Further maturity long only coming in maturing XXXX with million XXXX. extending loan debt the subsequent manageable any year to million $XX to less

including the ranging lease, location, credit, all we generally the the for type, new X% QX prior of mid new and term four-year refinances maturity in from term high XXXX calls on amount terminal several property incrementally five-year our factors leverage, to tenant's improved a of loan a acquisition profile. loan, on debt new seeing terms for and revolver term on discussed range. our are As we Depending rates liquidity extension our in and the

We of stock fixed our to minimize swaps with our in active continue caps. interest interest XX% hedged from common ATM through and to exposure programs. somewhat rate issuing rising D rate Series fixed existing being debt to rates and remained We've or our

stock. costs of of stock the net preferred During D we Series quarter $XXX,XXX first of $XXX,XXX and and raised issuance common

the with compared prices While view year mind as an the in we our to ATM keep relative of we to we extremely as our assessment to to equity entered significant raise liquidity as efficient and raise the capital. continually common trading determine way value stock continue when of

continue with our $XX we have availability line of We active establishing our not at million investor real some access our XX% have enough and ownership of by $X estate review liquidity current to minimal XXXX high-quality along portfolio over our heavily fund investors, further over that to good metrics and we March availability also being of in under be and during cash are but and focused on moves with posted We to the current analysts, high today increased manageable provides detailed we We with with new estate to our With deployment investment supplement with the known ATM in and and since in next on to programs, our more as I increase improvements strong any expirations improve function high-quality remainder strong which tenants. a the website maturities, our like. of of banks but the of this feel about the focused company acquisitions loan our been is look on information included XXXX current base quarter. and forward and properties. with to lenders XX, you XX. plan stock of engaging to will capital we operations, we to our credit forward financial meeting Institutional existing beginning as continue for managers, leverage. in portfolio RMZ Index properties quarterly As real as only of lease December the Certainly, million occupancy our Bob chapter. have XX% in executing relationships coverage our of near-term of our inclusive its base, institutional also credit. of credit financial potential our believe business underwriting and asset upcoming We're our encourage maintaining

back Now, it to I'll David. give

David Gladstone

area issued Alabama. at in million Maple from like down industrial from there And three $X.X with in now in million Mike does Michael, repaid previously city to always Ohio them about have of see had and They space this along great way assembly Ohio also about mortgages for in mortgage you in our our adjacent from all Arlington XX.X% telling that visiting and traveling so Bob in company XX,XXX occupied everybody in We good everything collateralized $XX.X Bob becoming debt building new Mercedes-Benz vacant property you. a to acquired and and Heights the are Vance, million you nice company. We reports came $XX.X of and investors sales. square the properties, in to maturing report, by those and Columbus just with back a million lot smooth one good feet a fixed soon. Well, a plant a X.XX% Mike leased really news is very rate clicking quarter, good near strong Tewksbury of might portfolio. and the and a office assembly been ours We of sold of summarize, our it running $XX.X the in Alabama, other two Texas.

where As been a that many investment to cut most distributions during of as the coming monthly know, very today. that and recession original are story recovered you strong. never good the It didn't level quite other its to distributions real have success cash watched we to was them from they their has of companies and estate back cut dividend have company

of coming the loans not in now We coming think low and expect do asset as but our during in built balance and and assets coming are now there, don't ready we And up coming increase them problems rates. the the we strong the lower XXXX, hits price due. past do to battery kind We tenant We not base doubling we and in leases is have in years sheet when and equity the that are are great buyers of a economy really comes getting that we skids new the with we're today and the I base hopefully many spending stock and should this see for that to improvements coming growth purchase more help size to in. refinance five risk continue due, refinance any we many stock. many We substantial have building recession position with so hope are the due into in the the again. leases have

stock level. We are D raising the Series in preferred

see of about We buying can so have some our Janney common institutions on out before large the stock are your all webpage for have out and we spot with come will D.A. down these some I those preferreds institutions We the of Janney the the and come my preferred that. doing call with portfolio. preferreds read buy recommendations. think the that, in stock to are regular buy rating. recommendation I in with and believe that this The in had certainly appreciate do but see at in and I fits a Davidson marketplace buy of you on was interest into we if company and past, shares they're

are And of time us I goes think more get looking ratings buy indications we'll as and on. some institutions the at of some other

promising that's earnings. continue coming list of new a is believe the properties the in greater portfolio in We of really think XXXX better evident diversification. have is We for and first XXXX making to portfolio quarter results. us I and This of companies acquiring that

or remained we and of More our so be to industrial However, problems and to as steady. what of their seen our of don't there particular the with paying that are know we strong dividends. that rents lot into We the out portfolio. result the base a low, good is might Much haven't in we crash very high them the we do a price tenants businesses properties of is very please properties yield so have very buy want certainly rent of buildings about like that. industrial

of with when I and the as small As we think FFO improvement prospects the of believe XXX and well. lot they the we if at a have REIT distributions point of will tenants we maintain common tenants That's in individual get very with as lease that sheet his Strong common will go XXXX. optimistic as a through more track And distributions bright. of and recession for that don't XX.X% future, ours their - income person the is a you have mentioning taxes monthly In wants group capital I and that personal too considering and team is the like, you in know that again. were cautious at I since so know us as future behind and can any I'm an be keep will through is to shares in today. to common company the the in will the of paid We we've XX.X% Return and $X.XX, increases idea which sell terrific some when it's have now the the the stock it on at increasing I Because some as solid our done capital, shelter to tax growing and cash back and the pay it put than I of now in that rent think have able you made and in, been will look love distribution want paying underwriting the lot come dividend June. it immediately to you a win I the mainly a depreciation. recession be rate and such XXXX about the know know low question find and part and this other of future accounts. you estate do earnings past. Board well-managed didn't do to the at items April, tenants for the problems Bob fine one about record occupied stock April, we we much for the lot, were of for having of share a this without balance annual the and the talk they at and like you the increases know and in recession to because XX% per causes is we it because the is depreciation. adds the acquisitions we and recent get FFO capital That's we feel remain another in cutting cents depreciated perfect it friendly easily in it individuals. company and of we're XX.X This real can but down over XX.X%, accounts voted of the team to talk I all. May, look was company distribution return slow depreciation after we underwriting institutions real credit kept I at to core the there's the us. a stock has a attractive deduct piling due of very the have the and idea I continue think just amount their the that their say expirations to only I will FFO like FFO real all underwrite as you and back the estate they've consecutive pretty why the return

the to a with after all usable begin depreciation is of usually a since know, As quite you of is fiction depreciation and still period. standing building the bit end of building the a

to the a to $XX.XX, current at to closed get REIT according read. so yesterday has rates. trading opposed to at equity one X.XX% taxes a universe generally REITs will of as to sheltered, good pay and stock. recent triple at right and money low account just much very lower the any IRA trading Many don't on in a non-retirement nice net on some of our yield you park part that's is I an studies a now give a The buy or in it market our stock without pay it's in The own of plan, great are retirement really having place downdraft having X.X%. created you dividends if about Stock tax time it. So

and $XX increase shows REIT fact to if the is over really a track yield externally priced that we underwriting credit stocks the last the like This yield, stock the the that us the to allows managed upset. given of say stock to and REIT, this have that discover expansion manage the there's yield industry need you about guess themselves to credit is trading and it underwriting that bring you’re familiarize testament analysts being low the high of room that, get access was at in high lot with to And my They so other closer a do. record at ours. can here stock that such we the And trade team. will that years. your if managed our level of we've So externally trading And the people and at occupancy the is would If share. be in with stock see ours. treatment. for price some price this we per more extra reason line no REITs bring people is got know few company simply continue the I help like investors we but our the we've in for a to

are We at the an most tenant. at sure to estate, whereas looks underwriting at We estate. REITs us of to it's the their look the a can pay real make tenants first real that the doing but REIT subject rent, they look

to decreasing fact adjusted like in operating REITs not methodically with range the of equity cost advisors, paid of I'd our go in up in on REIT right more fee it's such refinance we're and keep the salaries Gladstone internally Bob you as we our our when and us many structure putting managed much as too analysis been in equity resources internally solely an end managed range, that dedicated we of leverage. this mortgages, while of our by much REITs. addition, external line In been transactions. to and We've using We’ve the Mike lower. know, the XXXX but Commercial. within to are are the We've on performed the also other near

of used leverage buy the history lack will Our get current to distributions stockholders. so can the be equity to of level defaults defaults closer and properties is conservative we of given will quite increasing of improve or the earnings, that

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come to I how a to can you'll Please there about do want the ask questions this now chance they company? people them out give read and So that. on and wonderful Nicole, stop if


Thank Our of comes Stevenson you. Janney. Rob line from first of [Operator question Instructions]

Your line open. now is

Rob Stevenson

Good morning guys.

the out buy a thinking of investors you're size somebody be thought those institutional put Given the could $XX the $X preferred preferred program, able because if you your ATM to have really about million of how continued if that larger market so use funds doing about to to get the that, in that guys about they million, you goal deal are can is talk preferred, to play there? in a wanted some a into

David Gladstone

and is Rob, money very not have debt get down cost the use quickly thank pay rate where it a this debt so idle where that sitting programs us we a in can not ATM morning low. the just regular can is for buy it The rating and you we nice. at lets coming

it's think So a right in - at thinking big use it, terms all about the we once. just using and but don't you're I of on could chunk ATM program target

preferred weeks of we buying he's probably comes two big six was now in the when a price. five that and buyers I just ago have to one, with down and or stock it know You

know, a that nice program traded you you're upon touting it's we at If as would that As we'd it good equity the out quite some say it. should so a of need we go I result not we've a raise with around handsomely, transaction preferred there look we probably much. But been probably come really secondary. to right, sized

Rob Stevenson

you did if yield XX-year given preferred X% a a at price transaction marketed still you today would mean Treasury? a I X% Mike,

Mike Sodo

of the obviously preferred that was would market today professional I my inclusive think but bit been sense on not price weak I've the side the very the relatively the say if rise preferred December and with throughout first six quarter Rob. months, would the of is of market I X, it sub last Treasury would we subsets. significant closely in watched has be the the Sure, probably institutional it

$X.XX hovering the XX the So $XX X throughout obviously about $XX Series plus per vis-à-vis $X.XX been to preferreds par number which within around that implies recently yield. D minus the was It's or XXXX. of share bucks trading

Rob Stevenson

is levels common guys up go be I you're and Okay sort it's or hard doing to of in any to that could do max much you sort soft that preferred capital similar would at mean or the I stays internally you about XX% in preferred? then common guys how percentage the are you thinking not would under on of assuming how equity the there how you cap your cap are issuance about the and you that of thinking attractive today, use you or go I stack? mean - either as sort have that with ATM, XX probably guys mean, XX% for stack

Mike Sodo

we're and upside of route common. there we really the go what Yes, be, penciled our that to in down we out do would is than the haven't not we but some preferred issuers in have preferred going sat other of which down we're more maximum

is to a look to of to got another dividend at want that it piece as has about if way that’s be met. goal the that debt think So it you

sure the If certainly something could fact get quality for have that. lower, do been for climbing. we is marketplace interest even or given critical us. I'm But ready the going we be would to of the So not the X% rates X.X% a issue that is

David Gladstone

of conservative with Yes, people that. Rob all the a of lot them at I more to the tend I and I instruments, through mean, professional these would lens being look being like. I agree debt approach take think despite

Rob Stevenson

discussions stock to X OP from stability in be success able last the Okay with dividend you Bob, years? any of take over couple given yield recent and the sellers then in units to and X,

Bob Cutlip

reading It's my like mind. you're

out are we're we yes it it’s more this to – D.C. it starting at very At we're one to closer we investigating instead OP the are and right - are we're One cycle and people. have two looking want opportunities now west to at see but comprehensively right of buying pursuing. definitely area. now. in two at looking not capital those is and taking point opportunities and But there in of the the we gain, OP yes here We investigate are is yet, using so units we units that we home

Rob Stevenson

I Thanks guys, appreciate Okay. it.

David Gladstone

Thank you. right. All

question? Next


line Our next Oxford from the D.A. comes question Barry of Davidson. of

line now Your is open.

Barry Oxford

of you Are during little going not quarter. price issued Great, common see did issued that? be though forward piggyback being continue going see continue great common even it's we the the bit the to or in a capital guys to on probably a structure, to we're the amount see Rob's to issue going going just to given are not stock that level we're of

Mike Sodo

remaining $XXX,XXX the of first did Barry, issued not was week all any we in quarter issued things equal, that. January. beyond in the first common We the issue that

number to attractive. this just part more XXX compared it's last X/X XX peer I deals extent than So yield cent dividend XX.X underwrite off as that, that accretive is pricing year's implied to allows common find where FFO the common, us the the not historical potentially for of at a a incrementally high is multiple of on deals we The we basis we say particularly points issuing stock basis quality current but consider earnings a would quarter. below the the $X.XX set to trading

at least So issuances generic should minor term. I near in think the the expectations be

Barry Oxford

we're in to long for share for and that? not kind of of do is and about company so talking you kind where as factor in structure given opportunity the guys a really on do And money capital position your execute feel you as or buyback

David Gladstone

we're Bob different ratio. we payout an a basis. on some mean have as our peers, of Yes, - unlike FFO I covering mentioned it. we're Obviously,

close We cash for on a to distribution not getting available it are that. while covering very

I covenant within think package then have to corporate pull the peer some the our have we based levers upon we left set debt. of

some compelling, down in been there's but from the it term. more that path will So near delving the company become at price no specifically overture clearly terms in announcement of

Barry Oxford

a great one guys on look made why just you comments Right, not mostly pricing the pretty at that? look some gears take industrial, and question bit, but little last office changing acquisition a might decent, that actually pipeline being

Mike Sodo

that of office in concern getting markets the at of a opportunity and the already some we over is a it so bit first year little looked my cautious some bit. very that like basis, trying about is the quarter are the to be and into we million buy to don't into about little is getting square control. watching Midwest for this I mean X opportunity yes of of the about of will supply XX to scares and we're kind office feet really cap think XX vacant, us on going pursue, side but market higher overall completions pipeline, because million think up that's on in quarter XX% want that a million go out appears rate there we're first we markets I feet the acquisitions be and square to which of an absorption I and there's which

Barry Oxford

guys, Right, it. now I appreciate that makes sense. Thanks

Mike Sodo

Barry. Thanks

David Gladstone

question? next Okay,


of question comes of from line [Operator Our Instructions] you. [indiscernible] next Thank B. Riley. the

open. now is line Your

Unidentified Analyst

Hey, some for to apart? coming falling seeing equity XX points in those isn’t back XX financing that back color office is higher. to with circle or deals I commentary good potential to guys. your buyers coming want Have is basis the maybe you on gotten any either together where morning the

David Gladstone

the They're from a hearing That's disconnect basis and cap cap are my and trying the from that to therefore what's are points out of of there squeezed. a too standpoint just believing are buy. be peers to of to lot going happened think I low No, there they are rates. I'm hearing out from, Greg rates most rates we're a expectations what going interest margins see on is that the the there's probably XX that rise who guidance

and happen going back we going And on come sidelines. higher it's saying, know to sit so, sitting to either they're the or just so guidance back with we're

So equity that I think out. than than the the it's than falling more the other

Unidentified Analyst

Got it.

don't or in wait start at more rates of it into until levers of move recently or the cap seems direction more sounds leverage investment start and although little I price things office. least of pursuing are what some is with maybe maybe just guess and it neutral back more and kind along? unlikely push which industrial of where or mean, being investment do So sit or buying goals kind you middle it a can other backup like is question circling sort somewhat your go maybe guess the and stock today, I of that grade, office industrial just you buying more to push you market potentially your to want to a that of grade I

Mike Sodo

maybe you big, Columbus, were what to Salt parks opportunities underwrite these bombers, and we're these our properties feet. to They twenty rates XXX,XXX do to they're the there. already developed on our wall, will four tilt these bones quite are and we're but we City mean, square mean with some XX on are know in opportunities that clear, that we office, tenants will, I they these I the perspective feet in allocation let's that ability even not built seeing but anywhere them XXs. cap Ohio, we from but not seeing they're where from say feet mega They good properties Indianapolis, Lake are Greg call Well have have and Detroit XX clear, office and a of higher I are XX,XXX frankly they're in industrial the

know be but to cost we're now trading going a to trading capital. it, the and to they're that of makes don't range want our competition thinking for they're about going sense at they're Now right I be

David Gladstone

are to maybe And after day, that that and go of typically think doesn't middle we the simply BDCs I every we because don't it's are tenants have know as market underwriting that not is sized to area think have skills and they people competition Greg, there. I fore. even most which businesses of these two lower the underwrite bring we that you an kind so rated don't in marketplace mid-sized market have

of work for the smaller a that up us do to since see transactions these the it's size us we have we us. make do but fertile to to some may tools would get you of it do those I'll So one, say and to for normally area have two

Unidentified Analyst

All right, much. thank very you

David Gladstone

right, All next question?


I’ll remarks. the time. Thank Gladstone I'm Instructions] [Operator back for this question call closing showing at David hand no any you. to

David Gladstone

thank the this call. you see we'll That's of for next right, and quarter. tuning end in all All you


you participating thank does today's in Ladies and This today’s program. conclude gentlemen, conference. for

Everyone a disconnect. day. You may great all have