Gladstone Commercial Prices Common Stock Offering - Analyst Blog

On Tuesday, Gladstone Commercial Corp. GOOD, the McLean, VA-based real estate investment trust (REIT), announced the pricing of 1.4 million common shares at $17.00 per share. This common stock offering is expected to generate approximately $22.5 million worth of net proceeds. The funds will be utilized to finance future acquisitions, repay debts and meet other corporate needs.

Per the terms of the public offering, underwriters have been granted a 30-day option to buy additional common shares up to 210,000. For this offering, Jefferies LLC and Janney Montgomery Scott LLC have been appointed as joint book-running managers, while Oppenheimer & Co. Inc., J.J.B. Hilliard, W.L. Lyons, LLC and Ladenburg Thalmann & Co. Inc. have been appointed as co-managers. The offering is likely to close around Jun 6, 2014.

Gladstone Commercial is engaged in investing and owning net leased commercial, industrial and retail real estate properties. Currently, the company is present in 23 states. As of Mar 31, 2014, its real estate portfolio consists of 89 properties, spanning over 9.3 million square feet area.

Although this public offering will result in share dilution, the intention to use the net proceeds for debt repayment is encouraging, as it will lower interest costs. In addition, the strategic acquisitions will help Gladstone Commercial enhance its portfolio quality.

Gladstone Commercial currently holds a Zacks Rank #4 (Sell). Some better-ranked equity REITs include The GEO Group, Inc. GEO, Parkway Properties Inc. PKY and Aviv REIT, Inc. AVIV. All these stocks sport a Zacks Rank #1 (Strong Buy).