McLEAN, VA—Net lease REIT Gladstone Commercial Corp. is planning to sell "multiple non-core assets over the next twelve to 18 months, president Bob Cutlip tells GlobeSt.com. The sales will be a classic capital recycling strategy as the company wishes to expand its presence in more secondary markets.
He declined to say which assets the company will market or how many, noting that he doesn't know this himself. "These are decisions we will be making over the next few months," Cutlip says.
Gladstone Commercial recently announced it has expanded its credit commitments under two facilities to $150 million from $100 million.
More significantly, three lenders joined the bank syndicate providing the capital. The bank group is now comprised of KeyBank, Comerica Bank, Fifth Third Bank, US Bank and Huntington Bank.
"The banks that are joining Key Bank are very strong and their presence signals that we have a solid balance sheet and that they are confident in our ability to grow," Cutlip says.
As a net lease REITs the acquisitions Gladstone Commercial makes are going to be on the small side. Nonetheless the REIT has steadily been adding to its portfolio, making an acquisition anywhere from once a month to once a quarter via what Cutlip estimates is a $300 million pipeline of prospects, deals and due diligence in various stages.
"We have had 16 consequent quarters of acquisitions," he said.
Just to name a few of its most recent deals: In July it acquired a four-story, 78,151 square foot office building in Atlanta, GA for $13 million. In June it snapped up a three-story, 86,409 square foot, single-tenant office building in Draper, Utah, for $22.2 million at an average cap rate of 7.95%. In May it bought a 78,033 square foot office building in Columbus, Ohio for $7.7 million.
Notice a pattern? These deals are all in secondary markets. The Columbus acquisition, according to Matt Tucker, managing director, "marks our fourth acquisition in Columbus which continues our strategic accumulation of properties in strong secondary markets in the US."
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