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Gladstone Buys Industrial Property in Carrollton for $8M

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Gladstone Commercial Corporation (GOOD - Free Report) recently announced the acquisition of an industrial building in Carrollton, GA. The company shelled out $8 million for this sale/leaseback transaction. The move is in sync with the company’s efforts to fortify its portfolio on high-quality assets in thriving markets with credit-worthy tenants.

The 117,000-square-foot industrial building is fully leased to Superior Recreation Products and guaranteed by PlayCore with a 12-year lease term. The tenant makes use of this property, which was newly constructed in 2019, for assembling and distribution of its recreation and shade products.

Gladstone Commercial has been taking steps to bolster its property base in key markets in a bid to bank on upbeat market trends. In fact, the latest acquisition improves the weighted average lease term and lowers the average property age within the portfolio, per the company’s press release. Located near Atlanta along I-20, this facility serves as a mission-critical component of the tenant’s business and is likely to ensure steady returns.

As part of its capital-recycling program, the company is aimed at selling non-core assets and use proceeds to de-lever its portfolio as well as acquire properties in the stronger target-growth markets. The company has been growing its industrial portfolio and recently completed the acquisition of a 509,211-square-foot, six building industrial portfolio located in San Antonio, TX, Albuquerque, NM, New Orleans, LA, Baton Rouge, LA, Tucson, AZ. Also, Gladstone Commercial announced the acquisition of an industrial building in Jackson, TN, for $9 million. The 241,000-square-foot industrial building is fully leased to Berry Global, Inc.

Last month, the company announced steps to bolster its property base in the Indianapolis market. It acquired a 231,509-square-foot industrial building, which marked Gladstone Commercial’s third purchase in the market, and the second industrial acquisition in Indianapolis this year.

Such portfolio-expansion efforts will likely fuel growth, as high consumer spending, e-commerce boom and a healthy job market are spurring demand for the industrial real estate category. This is highly encouraging for Gladstone Commercial and other REITs, including Duke Realty Corp. (DRE - Free Report) , Prologis (PLD - Free Report) and Rexford Industrial Realty, Inc. (REXR - Free Report) .

As such for Gladstone Commercial, which is focused on investments in mission-critical facilities occupied by middle market to investment-grade businesses located in growing markets, the latest acquisition is likely to be accretive to its earnings and drive long-term growth. Nevertheless, rising supply and protectionist trade policies remain concerns for the industrial real estate market.

Shares of this Zacks Rank #4 (Sell) company have gained 4% in the past six months. Also, the industry reported growth of roughly the same during the period.

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