Gladstone Commercial Corporation (GOOD - Free Report) recently clinched a lease with Pipeline Foods LLC at the company’s Minneapolis office property. The lease runs for five years and encompasses 8,032 square feet of space in the 72,428-square-foot office building at 6499 University Avenue, in Fridley, MN.
The latest move marks the company’s fast signing of two significant leases in the building, reflecting the benefits from value additions with the recent property repositioning and the company’s asset-management expertise.
Moreover, the addition of a sustainability-focused tenant to the company’s roster seems strategic. The tenant — Pipeline — creates sustainable supply-chain solutions to connect farmers and end users of organic grains and ingredients. Such kind of businesses are in demand, thus, the addition of this tenant with an active commodity trading floor is likely to help generate steady cash flows for the landlord.
Apart from this, Gladstone Commercial has also clinched a two-year lease extension with Haier US Appliance Solutions at a Georgia industrial property. The move is likely to help the company secure steady cash flows from the property for a decent period as the extension provides more than 12 years of lease term with a high-quality credit tenant that has a growing business.
Delivered in March 2020, this 504,400-square-foot build-to-suit facility is located at 6900 Highway 411 North, in Crandall, and serves as a critical infrastructure in the tenant’s distribution channel. Haier, which had initially signed a 10.5-year lease for this facility, precisely utilizes it for the import and distribution of appliance components via the Appalachian Regional Port through rail from the Port of Savannah.
As such, the recent leasing activities for both office and industrial properties reflect the healthy demand for the company’s quality assets in strategic locations and the benefits from repositioning moves.
For the overall office real estate market, now much of the leasing proportion has shifted from new to renewal-oriented deals due to the pandemic. However, the next cycle of office-space demand will likely be driven by de-densification to allow higher square footage per office worker and the need for better-amenitized office properties to focus on health & wellness amid social-distancing requirements.
Moreover, the industrial asset class has grabbed limelight for showing resilience amid the pandemic with low vacancy rates, high asking rents and robust rent collections. Apart from the fast adoption of e-commerce, the industrial real estate space is anticipated to gain traction over the long run from a likely rise in the inventory levels of companies as a precaution for any supply-chain disruptions.This, in turn, will likely keep supporting the landlords like Gladstone Commercial, Prologis (PLD - Free Report) , Duke Realty Corp. (DRE - Free Report) and Terreno Realty Corporation (TRNO - Free Report) to enjoy a favorable market environment.
Gladstone Commercial currently carries a Zacks Rank #3 (Hold). The stock has gained 46.6% compared with the industry’s rally of 28.3% in the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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