Gladstone Expands Presence in Alabama With $14.25M Buyout

In efforts to expand its property base in targeted thriving markets, Gladstone Commercial Corporation GOOD purchased a 240,714-square-foot industrial rail-served manufacturing center in Montgomery, AL. The company shelled out $14.25 million for the acquisition.

The transaction indicates Gladstone Commercial's strategy of achieving growth on the back of buyout of high-quality, mission-critical assets leased out to tenants with strong credit profile.

In fact, the newly acquired build-to-suit property is fully-leased to WestRock CP, a wholly-owned subsidiary of corrugated solutions leader WestRock Company WRK, with a remaining lease term of 7.2 years. This indicates that the company is likely to enjoy stable revenues over the long term. Moreover, the property sits on 22 acres and is strategically located within the Montgomery Interstate Industrial Park that spans 700 acres.

Notably, Gladstone Commercial has been making encouraging moves to expand its footprint in strong growth corridors like Alabama. This is apt, given the strong macro tailwinds that are driving the industrial real estate space. In fact, the asset class demonstrated resilience despite the coronavirus pandemic, with low vacancy rates, high asking rents and high rent collections.

In fact, a notable increase in the e-commerce business’s share of total retail sales and a likely rise in the inventory levels of companies as a precaution for any supply-chain disruption are long-term demand drivers. This, in turn, will likely keep supporting industrial landlords like Gladstone Commercial, Prologis PLD and Duke Realty Corp. DRE, to enjoy a favorable market environment.

Nevertheless, oversupply remains concerning for the industrial real estate market. This is likely to affect rent growth and pricing power for Gladstone Commercial.

This Zacks Rank #5 (Strong Sell) stock has depreciated 26% compared with the industry’s decline of 7.2% in the past year.


You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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