Gladstone Commercial : Financial Supplement as of March 31, 2024

Supplemental Financial & Operating Information for the Quarter Ended

March 31, 2024 | Nasdaq: GOOD

Legal Disclaimer

Forward-LookingStatements:This presentation may include forward-looking statements within the meaning of the Securities Act of 1933 or the Securities Exchange Act of 1934. Forward-looking statements are typically identified by words such as "estimate," "may," "might," "believe," "will," "provided," "anticipate," "future," "could," "growth," "plan," "project," "intend," "expect," "should," "would," "if," "seek," "possible," "potential," "likely" or the negative or variations of such terms or comparable terminology. These forward-looking statements include comments with respect to our objectives and strategies, and the future results of our operations and our business. By their nature, these forward-looking statements involve numerous assumptions, uncertainties and descriptions of opportunities, both general and specific. The risk exists that these statements may not be fulfilled. We caution readers of this presentation not to place undue reliance on these forward- looking statements as a number of factors could cause our future results to differ materially from these statements. Any results or performance implied by forward-looking statements may be influenced by certain factors including, but not limited to, fluctuations in interest rates and stock indices, the effects of competition in the areas in which we operate, the overall impact of public health emergencies, and changes in economic, political, regulatory and technological conditions as well as those factors delineated under the caption "Risk Factors" in our Forms 10-Q and Form 10-K, and other documents we file with the SEC from time to time. Therefore, we caution that the foregoing list is not exhaustive. Investors should not rely on forward-looking statements to make decisions and should carefully consider the aforementioned factors as well as other uncertainties and events. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including subsequent annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Past or Present Performance Disclaimer:This presentation includes information regarding past or present performance of the Company. Please note, past or present performance is not a guarantee of future performance or future results.

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Table of contents

About Gladstone Commercial

Corporate overview	4
Portfolio and financial overview	5
Q1 2024 highlights (unaudited)	6

Financial overview

Condensed consolidated statements of operations	8
Funds from Operations (FFO) and core FFO	9
Condensed consolidated balance sheets	10
Capital structure	11
Liquidity and debt overview	12
Debt summary	13
Select corporate covenants	14

Portfolio Overview

Portfolio overview

16-19

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Corporate overview

Industrial building owned by Gladstone Commercial, located in

Tifton, Georgia

Corporate Headquarters	Investor Relations
1521 Westbranch Drive	703-287-5893
Suite 100	[e-mail]
McLean, VA 22102
703-287-5800
www.gladstonecommercial.com

About Gladstone Commercial

Gladstone Commercial (Nasdaq: GOOD) is an established real estate investment trust (REIT) that invests in single tenant and anchored multi-tenant net leased assets. As of March 31, 2024, we owned approximately 16.7 million square feet of primarily industrial and office real estate nationwide. We partner with a variety of tenants-from middle market private businesses to investment grade rated companies. We acquire properties through third party purchases, sale leaseback transactions, and by partnering with developers in build-to-suit transactions.

As of March 31, 2024, total assets were approximately $1.1 billion, representing investments in 132 properties. Our properties are leased to 110 tenants who represent 19 diversified industries across 27 states.

At March 31, 2024, our leases had an average remaining term of 6.7 years. In addition, approximately 51% of our tenants have an investment grade or investment grade equivalent credit rating.

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Portfolio and financial overview

Portfolio data1

Total assets ($mm)	$	1,105
Properties		132
Tenants		110
Industries		19
States		27
Average remaining lease term (years)		6.7
Occupancy		98.9 %
Square footage owned (mm)		16.7

Capitalization ($mm)1

Common equity market capitalization2	$	558
Preferred equity		200
Net total debt		719
Total capitalization	$	1,477
Less: Cash and cash equivalents		(10)
Total enterprise value	$	1,467
Net total debt / enterprise value		48.3%
Net total debt + preferred / enterprise value		61.9%
Net total debt / gross assets		46.1%

Top 5 tenants1	% of annualized straight
	line rent
	4%
	3%
	3%
	2%
	2%
Top 5 Tenants total	14%
Top 5 Tenants average remaining lease term	4.2 years
Portfolio average remaining lease term	6.7 years

Corporate liquidity ($mm)1

Cash and Cash Equivalents	$	10.5
Availability Under Revolving Credit Facility3		47.3
Total	$	57.8

• As of March 31, 2024.

• Based on the closing common stock price per share on March 28, 2024 of $13.84. Includes OP units and senior common shares convertible into shares of common stock.
  3 As of May 6, 2024, approximately $49.1 million is available under the Company's revolving credit facility.

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Q1 2024 highlights (unaudited)

FFO1 and Core FFO2:	Generated FFO and Core FFO of $13.6 million and $13.9 million, respectively, or $0.34 per diluted
	share.
Dividends:	Paid monthly common stock dividends totaling $0.30 per common share, or an annualized $1.20
	per common share, as well as continued payments of monthly senior common dividends, Series E
	preferred dividends, Series F preferred dividends, and Series G preferred dividends.
Equity Issuances:	Issued Series F preferred equity for net proceeds of $0.2 million.
Debt Activity:	Repaid $17.7 million in fixed rate mortgage debt with a weighted average interest rate of 5.05%,
	collateralized by two properties.
Select Expenditure Activity:	Paid $0.8 million related to capital expenditures and $0.3 million related to leasing commissions.

• FFO is calculated as net income (computed in accordance with GAAP), excluding gains or losses from sales of property and impairment losses on property, plus depreciation and amortization of real estate assets, which we believe to be consistent with the NAREIT definition. FFO does not represent cash flows from operating activities in accordance with GAAP. FFO should not be considered an alternative to net income as an indication of our performance or to cash flows from operations as a measure of liquidity or ability to make distributions.
  2Core FFO is FFO adjusted for gains from early extinguishment of debt and any other non-routine revenue or expense adjustments.

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[PIC]

Financial Overview

[PIC]

[PIC]

Condensed consolidated statements of operations

($ in thousands, except per share amounts)		For the three months ended (unaudited)
Operating revenues		3/31/2024	12/31/2023		3/31/2023
Lease revenue	$	35,721	$	35,908	$	36,554
Total operating revenues	$	35,721	$	35,908	$	36,554
Operating expenses
Depreciation and amortization	$	13,326	$	13,731	$	14,704
Property operating expenses		5,884		5,572		6,727
Base management fee		1,535		1,573		1,605
Incentive fee		1,171		-		-
Administration fee		630		615		565
General and administrative		1,047		926		1,063
Impairment charge		493		5,719		-
Total operating expense before incentive fee waiver	$	24,086	$	28,136	$	24,664
Incentive fee waiver		(771)		-		-
Total operating expenses	$	23,315	$	28,136	$	24,664
Other income (expense)
Interest expense	$	(9,497)	$	(9,485)	$	(8,828)
Gain on sale of real estate, net		283		3,492		-
Gain on debt extinguishment, net		300		2,830		-
Other income		34		(58)		105
Total other (expense), net	$	(8,880)	$	(3,221)	$	(8,723)
Net income
$	3,526	$	4,551	$	3,167
Net (income) loss (available) attributable to non-controlling interests		(2)		(14)		7
Net income available to the company
$	3,524	$	4,537	$	3,174
Distributions attributable to Series E, F, and G preferred stock		(3,112)		(3,106)		(3,022)
Distributions attributable to senior common stock		(105)		(107)		(109)
(Loss) gain on extinguishment of Series F preferred stock		(3)		1		(5)
Gain on repurchase of Series G preferred stock		-		-		3
Net income available to common stockholders	$	304	$	1,325	$	41

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Funds from Operations (FFO) and core FFO

($ in thousands, except per share amounts)		For the three months ended (unaudited)
		3/31/2024		12/31/2023		3/31/2023
Net income	$	3,526	$	4,551	$	3,167
Less: Distributions attributable to preferred and senior common stock		(3,217)		(3,213)		(3,131)
Less/Add: (Loss) gain on extinguishment of Series F preferred stock		(3)		1		(5)
Add: Gain on repurchase of Series G preferred stock		-		-		3
Net income available to common stockholders and Non-controlling OP Unitholders	$	306	$	1,339	$	34
Adjustments:
Add: Real estate depreciation and amortization	$	13,326	$	13,731	$	14,704
Add: Impairment charge		493		5,719		-
Less: Gain on sale of real estate, net		(283)		(3,492)		-
Less: Gain on debt extinguishment, net		(300)		(2,830)		-
FFO available to common stockholders and Non-controlling OP Unitholders - basic	$	13,542	$	14,467	$	14,738
Add: Convertible senior common distributions		105		107		109
FFO available to common stockholders and Non-controlling OP Unitholders - diluted	$	13,647	$	14,574	$	14,847
FFO available to common stockholders and Non-controlling OP Unitholders - basic	$	13,542	$	14,467	$	14,738
Add: Write off shelf registration statement costs and prepaid ATM costs		183		-		110
Add: Asset retirement obligation expense		33		32		31
Add: Realized loss on interest rate hedging instruments		81		-		-
Core FFO available to common stockholders and Non-controlling OP Unitholders - basic	$	13,839	$	14,499	$	14,879
Add: Convertible senior common distributions		105		107		109
Core FFO available to common stockholders and Non-controlling OP Unitholders -
diluted	$	13,944	$	14,606	$	14,988
Weighted average common shares outstanding and Non-controlling OP Units - basic		40,314,124		40,309,714		40,313,827
Weighted average common shares outstanding and Non-controlling OP Units - diluted		40,656,371		40,654,846		40,659,514
FFO per weighted average share of common stock and Non-controlling OP Unit - basic	$	0.34	$	0.36	$	0.37
FFO per weighted average share of common stock and Non-controlling OP Unit - diluted	$	0.34	$	0.36	$	0.37

Core FFO per weighted average share of common stock and Non-controlling OP Unit - basic

Core FFO per weighted average share of common stock and Non-controlling OP Unit - diluted

Distributions declared per share of common stock and Non-controlling OP Unit

$	0.34	$	0.36	$	0.37
$	0.34	$	0.36	$	0.37
$	0.30	$	0.30	$	0.30

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Condensed consolidated balance sheets

		3/31/2024
($ in thousands)		(unaudited)			12/31/2023
ASSETS
Real estate, at cost	$	1,209,932	$	1,221,364
Less: accumulated depreciation		304,000			299,662
Total real estate, net		905,932			921,702
Lease intangibles, net		97,663			101,048
Real estate and related assets held for sale, net		18,297			28,787
Cash and cash equivalents		10,451			11,985
Restricted cash		4,467			4,150
Funds held in escrow		5,334			7,515
Right-of-use assets from operating leases		4,143			4,889
Deferred rent receivable, net		41,912			41,006
Other assets		16,958			12,389
TOTAL ASSETS	$	1,105,157		$	1,133,471
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Mortgage notes payable, net	$	275,976	$	295,853
Borrowings under revolver and term loan, net		443,380			443,008
Deferred rent liability, asset retirement obligation and other liabilities, net		67,509			70,303
TOTAL LIABILITIES	$	786,865		$	809,164
MEZZANINE EQUITY
Series E and G redeemable preferred stock, net	$	170,041	$	170,041
TOTAL MEZZANINE EQUITY	$	170,041		$	170,041
STOCKHOLDERS' EQUITY
Senior common stock	$	1	$	1
Common stock		40			40
Series F redeemable preferred stock		1			1
Additional paid in capital		730,465			730,256
Accumulated other comprehensive income		13,281			7,758
Distributions in excess of accumulated earnings		(596,475)			(584,776)
TOTAL STOCKHOLDERS' EQUITY	$	147,313		$	153,280
OP Units held by Non-controlling OP Unitholders		938			986
TOTAL EQUITY	$	148,251		$	154,266
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY	$	1,105,157	$	1,133,471

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