Terms

Series

6.625% Series E Cumulative Redeemable Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

6.625%

Rate Type

Fixed

Annual Dividend

$1.66

Payment Frequency

Monthly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

October 4, 2024

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Debt Obligations, Any Capital Stock Expressly Designated As Senior To Series E Preferred Stock (None Currently Exist); Pari Passu With: Series A Preferred Stock (7.75%), Series B Preferred Stock (7.50%), Series D Preferred Stock (7.00%), Any Future Parity Preferred Stock; Senior To: Common Stock, Senior Common Stock, Any Capital Stock Expressly Designated As Junior To Series E Preferred Stock

Regulatory (Basel III) Call

No

Tax Classification

Reit Passthrough

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

2,400,000

Prospectus Summary

Gladstone Commercial Corporation (Nasdaq: GOOD), a Maryland-based externally-advised REIT focused on office and industrial properties, is offering 2,400,000 shares of its 6.625% Series E Cumulative Redeemable Preferred Stock at $25.00 per share liquidation preference, targeted to list on Nasdaq as 'GOODN.' The fixed dividend rate equates to $1.65625 per share annually, paid monthly in arrears on the last day of each month. The shares are cumulative, meaning any missed or deferred dividends accumulate and must be paid in full before any distributions can be made to common or junior stockholders. The company cannot call the shares before October 4, 2024; thereafter, it may redeem at $25.00 plus accrued dividends on 30–60 days' notice. The Series E Preferred Stock ranks senior to Gladstone Commercial's common stock and senior common stock, and on parity with its Series A (7.75%), Series B (7.50%), and Series D (7.00%) preferred issues. It is expressly junior to all existing and future debt obligations of the company. Critically, as a holding company structure, all operations and assets reside in Gladstone Commercial Limited Partnership and its subsidiaries; preferred stockholders are structurally subordinated to all subsidiary-level liabilities (approximately $620 million in debt as of June 30, 2019) before any value reaches them. There is no regulatory capital call provision, but the issuer retains a REIT-preservation redemption right allowing repurchase of excess shares to maintain REIT status. At the $25.00 offering price, the Series E Preferred Stock yields exactly 6.625% per annum, with monthly cash dividends of approximately $0.1380 per share. As a REIT, Gladstone Commercial's dividends generally do not qualify for the 15%/20% qualified dividend income (QDI) rate available to individual investors, nor the dividends-received deduction (DRD) for corporate holders; distributions may be characterized as ordinary income, return of capital, or capital gains depending on the company's earnings and profits. Record dates are set 10–35 days before each monthly payment date. The dividend stopper provision prevents payment of any dividends on common or junior securities if cumulative preferred dividends are in arrears, protecting preferred holders' priority but not guaranteeing payment if legal funds are unavailable or debt agreements restrict distributions.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If the company has not paid full cumulative dividends on the Series E Preferred Stock for all past monthly periods, it cannot pay dividends on or repurchase any common stock or junior/parity preferred stock, subject to limited exceptions.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 57 (Average)