Gladstone Commercial Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Real Estate and Intangible Assets (Tables)

Real Estate and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2012

Real Estate and Intangible Assets [Abstract]

Company's investments in real estate, including capitalized leases


		December 31, 2012				December 31, 2011
Real estate:
Land		$	69,126			$	60,602
Building and improvements			442,451				367,605
Tenant improvements			22,176				14,314
Accumulated depreciation			(65,730	)			(53,784	)

Real estate, net		$	468,023			$	388,737

Schedule of properties acquired


Location		Acquisition Date				Square Footage				Lease Term				Renewal Options		Total Purchase Price				Acquisition Expenses				Annualized Straight Line Rent				Debt Issued / Assumed
Ashburn, VA			1/25/2012				52,130				15 years			2 (5 years each)		$	10,775			$	102			$	989				N/A
Ottumwa, IA			5/30/2012				352,860				11.5 years			3 (5 years each)			7,100				49				684				5,000
New Albany, OH			6/5/2012				89,000				10.5 years			2 (5 years each)			13,333				196				1,361				N/A
Columbus, GA			6/21/2012				32,000				11.5 years			2 (5 years each)			7,320				71				656				4,750
Columbus, OH			6/28/2012				31,293				10 years			N/A			4,037				66				342				N/A
Jupiter, FL			9/26/2012				60,000				10.5 years			2 (5 years each)			15,500				61				1,372				10,758	⁽¹⁾
Fort Worth, TX			11/8/2012				208,234				14 years			N/A			19,950				128				1,628				14,168	⁽¹⁾
Columbia, SC			11/21/2012				146,483				10 years			3 (5 years each)			29,150				105				2,614				19,000

Total							972,000									$	107,165			$	778			$	9,646			$	53,676

Company allocated the purchase price of the properties acquired


		Land				Building				Tenant Improvements				In-place Leases				Leasing Costs				Customer Relationships				Above Market Leases				Below Market Leases				Discount/ (Premium) on Assumed Debt				Total Purchase Price
Ashburn, VA		$	706			$	6,551			$	1,307			$	804			$	908			$	499			$	—			$	—			$	—			$	10,775
Ottumwa, IA			212				4,743				329				940				484				499				—				(107	)			—				7,100
New Albany, OH			1,658				7,511				1,235				1,122				857				903				47				—				—				13,333
Columbus, GA			1,378				3,894				626				574				473				375				—				—				—				7,320
Columbus, OH			542				1,856				597				391				213				325				113				—				—				4,037
Jupiter, FL			1,160				11,249				745				1,603				701				909				—				—				(867	)			15,500
Fort Worth, TX			963				15,507				140				1,579				2,107				517				—				—				(863	)			19,950
Columbia, SC			1,905				17,765				2,883				2,454				1,490				1,919				734				—				—				29,150

		$	8,524			$	69,076			$	7,862			$	9,467			$	7,233			$	5,946			$	894			$	(107	)		$	(1,730	)		$	107,165

Schedule of revenue and net income recognized on properties acquired


						For the Year Ended December 31,
		Acquisition Date				2012				2012
Location		Acquisition Date				Rental Revenue				Net Income ⁽¹⁾
Ashburn, VA			1/25/2012			$	925			$	555
Ottumwa, IA			5/30/2012				408				200
New Albany, OH			6/5/2012				776				445
Columbus, GA			6/21/2012				346				186
Columbus, OH			6/28/2012				168				65
Jupiter, FL			9/26/2012				362				191
Fort Worth, TX			11/8/2012				240				118
Columbia, SC			11/21/2012				282				123

						$	3,507			$	1,883

⁽¹⁾	Does not include interest expense or acquisition related costs that are required to be expensed under ASC 805.

Pro-forma earnings


		For the year ended December 31,
		2012				2011				2010
		(unaudited)
Operating Data:
Total operating revenue		$	55,849			$	56,414			$	47,968
Total operating expenses			(27,571	)			(29,182	)			(27,566	)
Other expense			(25,040	)			(21,709	)			(15,465	)

Net income			3,238				5,523				4,937
Dividends attributable to preferred and senior common stock			(4,206	)			(4,156	)			(4,114	)

Net (loss) income available to common stockholders		$	(968	)		$	1,367			$	823

Share and Per Share Data:
Basic & diltued (loss) earnings per share of common stock		$	(0.09	)		$	0.13			$	0.10
Weighted average shares outstanding-basic (in thousands)			10,953,325				10,236,859				8,576,303
Weighted average shares outstanding-diluted (in thousands)			10,953,325				10,288,711				8,601,153

Weighted average amortization period for the intangible assets acquired and liabilities assumed


Intangible Assets & Liabilities		2012				2011
In-place leases			11.2				16.4
Leasing costs			11.2				16.4
Customer relationships			14.6				19.2
Above market leases			10.1				8.8
Below market leases			11.3				20.9

All intangible assets & liabilities			12.1				17.1

Future operating lease payments from tenants under non-cancelable leases


Year		Tenant Lease Payments
2013		$	50,534
2014			49,719
2015			46,431
2016			42,240
2017			40,239
Thereafter			266,545

Value of intangible assets and the accumulated amortization


		December 31, 2012								December 31, 2011
		Lease Intangibles				Accumulated Amortization				Lease Intangibles				Accumulated Amortization
In-place leases		$	34,085			$	(12,125	)		$	24,620			$	(10,181	)
Leasing costs			24,071				(7,103	)			15,013				(5,663	)
Customer relationships			26,671				(8,345	)			20,725				(6,844	)

		$	84,827			$	(27,573	)		$	60,358			$	(22,688	)

Estimated aggregate amortization expense


Year		Estimated Amortization Expense
2013		$	7,545
2014			6,282
2015			5,854
2016			5,223
2017			5,039
Thereafter			27,311