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Actively Seeking Real Estate Opportunities

2014 Representative Transactions 

 
 
 
 

Industrial Portfolio Acquisition

$30,800,000

Monroe, MI

December 2014

On December 23, 2014 Gladstone Commercial purchased two industrial buildings totaling 535,500 square feet located in Monroe, Michigan for $30.8 million. The properties are fully leased through August 2023 to a $1B+ revenue manufacturing company that is a wholly owned subsidiary of an investment-grade rated Fortune 100 company. The going-in cap rate was 7.6% and the GAAP cap rate was 8.2%.

The properties are "A" quality, built in 2003 and 2005, and are very well located to serve the surrounding manufacturing areas. Additionally, with 32 foot+ clear heights, cross docking capabilities, ample loading, and parking, they are highly functional as distribution buildings. The properties are located in the Monroe submarket of the 500 million square foot Detroit area industrial market. The overall Detroit area industrial market vacancy rate is 6.1%. The 12 million square foot Monroe submarket has a vacancy rate of 3.5%.

 
 
 
 

$10,000,000

Denver, CO

October 2014

On October 31, 2014 Gladstone Commercial purchased a 189,210 square foot industrial building in Denver, Colorado for $10.0 million. The property is fully leased through December 2024 to Premium Pet Health, LLC, a wholly owned subsidiary of Smithfield Foods. The going in cap rate was 7.4% and the GAAP cap rate was 8.6%.

The building serves as headquarters of, as well as a manufacturing and distribution facility for, Premium Pet Health, which specializes in the sourcing, production, sales and distribution of proteins for use by the pet care industry. The property is located in an industrial park in close proximity to downtown Denver with direct rail service and easy access to I-25, 1-270 and the Denver airport.

The property is located in the Northeast Denver industrial submarket of the 145 million square foot Denver area industrial market. The vacancy rate for the submarket was 2.6% and the overall vacancy for the Denver industrial market was 3.8% at the time of the acquisition.

 
 
 
 

$10,500,000

Indianapolis, IN

August 2014

On August 25, 2014 Gladstone Commercial purchased a five-story, 86,495 square foot, multi-tenant office building located in Indianapolis, Indiana for $10.5 million. Built in 1981 and renovated in 2013, the anchored multi-tenant property serves as the headquarters for Community Health Network, Inc.'s for-profit subsidiary, Visionary Enterprises Inc. The property was acquired for a going cap rate of 6.9% with a GAAP cap rate of 8.3%.

Community Health Network (CHN) is a Central Indiana based non-profit health system with over 200 sites of care. CHN occupies 71% of the space through February 2026. The remaining 25% is leased to six tenants with staggered lease maturities through 2018.

CHN is the sixth largest employer in the Indianapolis region and has continued to grow rapidly in the North Shadeland submarket since 2007, the submarket in which the property is located, when CHN moved its administrative headquarters off campus from the nearby Community Hospital North. Since 2007, CHN's annual off campus growth has averaged 43,000/SF/Yr. Heritage Park II is the closest office building based on travel time to Community Hospital North.

 
 
 
 

Build to Suit
On Campus Healthcare
Facility

$5,600,000

Phoenix, AZ

July 2014

On July 26, 2014 Gladstone Commercial funded a $5.6 million second mortgage development loan for the construction of an 81,371 square foot, build-to-suit transitional care facility located on a major hospital campus in Phoenix, Arizona.

Construction is scheduled to be completed in Q3 2015 and Gladstone will earn 9.0% interest, paid currently in cash, on the loan during construction until maturity. Prior to completion of the facility, Gladstone will be granted a right of first offer to purchase the property. If Gladstone does not purchase the property at completion, it will receive a priority exit fee sufficient to earn an internal rate of return of 22% when the development loan is repaid upon sale of the property.

 
 
 
 

$8,300,000

Aurora, CO

July 2014

On July 1, 2014 Gladstone Commercial purchased a 124,800 square foot building in the Denver suburb of Aurora, Colorado for $8.3 million. The building serves as headquarters of, as well as a warehouse, manufacturing and distribution facility for, Barton Supply, a privately owned portfolio company of Kodiak Building Partners, specializing in rebar fabrication, structural and miscellaneous steel and concrete construction accessories across commercial and residential markets. The going in cap rate was 7.7% and the GAAP cap rate was 9.3%.

The property, which has been leased back to Barton Supply for 15 years with a lease expiration date of June 2029, is located in the Upland Business Park, a mature core business / industrial park in Aurora with direct rail service and direct access to I-225 and 1-70. The property is located 15 minutes from the Denver CBD and 20 minutes from Denver International Airport. The property has excess land for future expansion and direct rail access, a unique attribute within the business park.

 
 
 
 

Industrial
Sale-Leaseback


$39,000,000

Scranton, PA

June 2014

On June 9, 2014 Gladstone Commercial purchased a 955,935 square foot bulk distribution warehouse located in Scranton, PA for $39.0 million. The property is occupied by a regional third-party logistics company under a ten-year absolute net lease with an expiration date of June 2024. The front loading distribution center is situated at the intersection of I-476, I-81 and Route 11/307, providing convenient highway access for distribution to the Northeast Corridor, which is crucial for the Tenant's operations. The Class B distribution center was acquired at a going in cap rate of 8.0% and a GAAP cap rate of 8.7%.

The property is located in the Northeast PA submarket of the I-81 industrial corridor. The I-81 industrial corridor is one of the most active and fastest growing markets in the northeastern United States for warehousing, repackaging, and distributing consumer goods. At the time of acquisition, the Northeast PA submarket had a vacancy rate of 8.7%.

 
 
 
 

$11,800,000

Columbus, OH

May 2014

On May 13, 2014 Gladstone Commercial purchased a 114,786 square foot three-story, Class B multi-tenant office building located in Columbus, OH for $11.8 million. The going in cap rate is 9.6% and the GAAP cap rate is 11.0%. The anchored multi-tenant property serves as the headquarters for Quantum Health, Inc.

Located 7 miles northwest of the Columbus CBD, the subject's submarket had a vacancy rate 2.0% below the Columbus market average at the time of acquisition.

Quantum Health, Inc. is a care coordination and navigation firm that works for employers with self-funded health insurance plans to guide their employees and dependents through the healthcare system and help them get the most out of their care and benefits. A regional privately-owned business occupies the remaining 8% of the space.

 
 
 
 

$8,200,000

Rancho Cordova, CA

April 2014

On April 22, 2014 Gladstone Commercial purchased a 61,358 square foot creative office building located in Rancho Cordova, CA for $8.2 million. The property is located adjacent to Highway 50, an approximate 15-minute drive from Downtown Sacramento. The going in cap rate was 6.7% and the GAAP cap rate was 8.5%. The Property is fully leased to Barco, Inc. with a lease expiration date of April 2024.

Barco is a global technology company that designs, and develops networked visualization products, including projectors, video walls, displays, image processing and presentation systems and software for a variety of selected professional markets. The property is 1 of 3 U.S. locations for Barco and serves as its West Coast headquarters.

 
 
 
 

$15,900,000

Dallas, TX MSA

March 2014
May 2014

On March 27 and May 18, 2014 Gladstone Commercial purchased three Crème de la Crème childcare facilities totaling 62,680 square feet for a total purchase price of $15.9 million. The going in cap rate was 9.1% and the GAAP cap rate was 10.3%.

The 3 facilities are located in the Allen, Colleyville and Coppell, Texas suburbs of Dallas and were constructed as build to suits for Crème in 2000, 2004 and 2005. Crème de la Crème, based in Greenwood Village, Colorado, is a privately held company that owns and operates 24 premium early childhood learning centers across 8 states. At acquisition, the properties were leased on an absolute NNN basis with approximately 12 years of primary term remaining.

The properties are located in the Dallas/Fort Worth market, home to more than 10,000 corporate headquarters, the largest concentration in the U.S. The median household incomes of Allen, Colleyville and Coppell are 70%, 80% and 135% greater, respectively, than that of the Dallas MSA.

 
 
 
THE GLADSTONE COMPANIES
Leaders in private equity, debt and real estate ownership and financing, the Gladstone Companies are a family of public and private investment funds. Our funds invest in commercial real estate, farmland, and small and medium-sized companies and provide financing to such businesses across the capital structure, from second lien and mezzanine debt, to equity and real estate financing solutions.

Financing for the Gladstone Companies is provided by four public investment vehicles: Gladstone Capital Corporation (NASDAQ: GLAD), Gladstone Investment Corporation (NASDAQ: GAIN), Gladstone Commercial Corporation (NASDAQ: GOOD), and Gladstone Land Corporation (NASDAQ: LAND).

SENIOR REAL ESTATE TEAM
 

Bob Cutlip
President and Executive Managing Director
(703) 287-5878

  Buzz Cooper
Sr Managing Director
South/Southeast
(703) 287-5815
  Matt Tucker
Managing Director
Northeast/Midwest
(703) 287-5830
  Andrew White
Managing Director
West
(310) 953-4960
 
 

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1521 Westbranch Drive • Suite 100 • McLean, VA 22102
Phone: (703) 287-5800• Fax: (703) 287-5801