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Greetings, and welcome to Gladstone Commercial Corporation Year-End and Fourth Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Gladstone, Chief Executive Officer. Please go ahead.

Well, thank you for that nice introduction, and thanks to all of you who called in today to hear from us. We always enjoy these times with you and on the phone and wish there were more times to talk about it. Now we'll hear from Catherine Gerkis first, our Director of Investor Relations, to provide a brief disclosure regarding certain regulatory matters. Catherine, go ahead.

Thanks, David. Good morning, everyone. Today's call may include forward-looking statements, which are based on management's estimates, assumptions and projections. There are no guarantees of future performance, and actual results may differ materially from those expressed or implied in these statements due to various uncertainties, including the risk factors set forth in our SEC filings, which you can find on the Investors page of our website, gladstonecommercial.com. We assume no obligation to update any of these statements unless required by law. Please visit our website for a copy of our Form 10-K and earnings press release for more detailed information. You can also sign up for our e-mail notification service and find information on how to contact our Investor Relations department. We are also on X, @GladstoneComps as well as Facebook and LinkedIn. Keyword for both is, The Gladstone Companies. Today, we'll discuss FFO, which is funds from operations, a non-GAAP accounting term defined as net income, excluding the gains or losses from the sale of real estate and any impairment losses on property plus depreciation and amortization of real estate assets. We may also discuss core FFO, which is generally FFO adjusted for certain other nonrecurring revenues and expenses. We believe these metrics can be a better indication of our operating results and allow better comparability of our period-over-period performance. Now let's turn the presentation to Buzz Cooper, Gladstone Commercial's President.

Thank you, Catherine, and thank you all for joining today's call. We are pleased to update you on our results for the year ended December 31, 2025, our current portfolio and our 2026 outlook. 2025 was a productive year for our portfolio. During the year, we acquired over $206 million of industrial assets across 10 facilities totaling 1.6 million square feet with a weighted average cap rate of 8.88%. At closing, these properties had a weighted average lease term of 15.9 years. We increased portfolio industrial concentration as a percent of annualized straight-line rent to 69% as of December 31, 2025, as compared to 16 -- excuse me, 63% at the same date in 2024. We invested $21 million in existing portfolio towards renewing or extending 1.2 million square feet of leases at 18 of our properties. These leases resulted in a $2.1 million net increase in GAAP rent. We sold 2 properties consisting of 1 office and 1 industrial property and executed an agreement to sell another industrial property in the coming months. We amended, extended and upsized our syndicated bank credit facility from $505 million to $600 million. We closed on an $85 million private placement at 5.99% senior unsecured notes due December 15, 2030. As we have discussed in the past, we remain steadfast in several key focus areas: growing our industrial concentration, adding value in our existing portfolio through renewals, extensions and strategic capital investments and disposing of noncore assets and strategically redeploying those proceeds into quality industrial assets. By executing on these focus areas, we expect to achieve increased portfolio WALT, strong occupancy rates, streamline rental growth across the portfolio, continue to delever and decrease the cost of capital. Our asset management team continues to effectively manage the existing portfolio as evidenced by 100% collection of cash-based rents in the period, and occupancy of 99.1% across the portfolio, average remaining lease term of 7.3 years and a 4% same-store lease revenue increase compared to 2024. Each of these milestones is a testament to the mission-critical nature of the assets in our portfolio, the quality of tenant credits in our portfolio and our underwriting capabilities. We are grateful to our lenders for their continued trust and partnership with us. These long-standing relationships are critical to our continued investment in the current portfolio and the addition of mission-critical industrial real estate going forward. In short, our relationships with our tenants, the capital market community and our financial capacity have allowed us to execute upon our focus areas at a high level. Looking ahead to 2026, we remain focused on evaluating opportunities to acquire higher-quality industrial assets that are mission-critical to tenants and industries and accretive to our long-term strategy. As I mentioned a moment ago, we are working toward our near-term goal of 70% industrial annualized straight-line rent. We will look to achieve this goal and push past it in the coming year. While we do not have a time line for the disposition of all of our office properties, we are keenly focused on growing the industrial concentration of our portfolio. At the same time, we will continue to work with our existing tenants to extend leases, capture mark-to-market opportunities and support tenant growth through targeted expansion, capital improvement initiatives and build-to-suit opportunities. While we remain aware of the challenging office environment, we will be strategic and intentional in evaluating our specific portfolio, seeking opportune times to dispose of office and noncore industrial as part of our continued capital recycling efforts. With the availability via our increased line of credit, access to the private placement bond market, cash on hand and the ATM, we are positioned to deploy capital into accretive industrial acquisitions and portfolio improvements. In closing, 2025 was a great year for the company, and the team is focused on continuing their efforts as we head into 2026. I will now turn the call over to Gary to review our financial results for the quarter and liquidity position. Gary?

Thank you, Buzz, and good morning, everyone. I'll start my remarks regarding our financial results this morning by reviewing our operating results for the fourth quarter of 2025. All per share numbers referenced are based on fully diluted weighted average common shares. FFO and core FFO per share available to common stockholders were both $0.37 per share, respectively, for the quarter. FFO and core FFO available to common stockholders during the fourth quarter of 2024 were both $0.35, respectively. FFO and core FFO for the 12 months ended December 31, 2025, were $1.38 and $1.40 per share, respectively. FFO and core FFO for the same period in 2024 were $1.41 and $1.42 per share, respectively. Same-store lease revenue increased by 4% in the 12 months ended December 31, 2025, over the same period in 2024 due to an increase in recovery revenue from property operating expenses and an increase in rental rates from leasing activity subsequent to the year ended December 31, 2024, partially offset by a settlement received at one of our properties related to deferred maintenance in the prior period. Our fourth quarter results reflected total operating revenues of $43.5 million with operating expenses of $26.4 million as compared to operating revenues of $37.4 million and operating expenses of $25 million for the same period in 2024. Operating revenues were higher in 2025 due to an increased portfolio size, increased recovery revenues and higher rental rates. Expenses were higher in the fourth quarter of 2025 versus 2024, mainly due to the higher depreciation from a larger portfolio, partially offset by an impairment charge and crediting back of all the incentive fee in the fourth quarter of 2024. At the end of the quarter, we had one industrial property and a portion of a land parcel held for sale. During the quarter, we extended and upsized our bank credit facility to $400 million in term loans and a $200 million revolver. The revolving credit facility maturity was extended to October 2029 and the maturity dates for Term Loan A and Term Loan B components were extended until October 2029 and February 2030, respectively. The amended credit facility also provides the company with options to extend the maturity dates of the revolving line of credit and Term Loan C components until October 2030 and February 2029, respectively. The transaction led by KeyBanc as joint lead arranger and book manager as well as Bank of America, the Huntington National Bank, Fifth Third Bank National Association as joint lead arrangers, Synovus Bank and S&T also renewed their commitments. In addition, PNC Bank and Webster Bank both joined as lenders. In Q4, we also issued $85 million of 5.99% senior secured notes due December 30, 2030, in the private placement market. Investors included Nuveen and New York Life. This is our second issuance in this market, which allows us to decrease our cost of capital and simplify our balance sheet. As of today, we have $27.6 million of loan maturities in 2026. As of the end of the quarter, we had $37.4 million in revolver borrowings outstanding. Looking at our debt profile. As of December 31, 48% was fixed, 47% was hedged floating rate and 5% was floating rate, which is the amount drawn on our revolving credit facility. As of December 31, our effective average SOFR was 3.87%. Our outstanding bank term loans are all hedged to maturity with interest rate swaps. We continue to monitor interest rates closely and update our hedging strategy as needed. During the 12 months ended December 31, 2025, we sold 4.4 million shares of common stock under our ATM program, raising net proceeds of $61 million. We continue to manage our equity activity to ensure that we have sufficient liquidity for upcoming capital requirements and new acquisitions. Taking in the year as a whole, we increased net assets from $1.1 billion to $1.25 billion, which was the result of the net portfolio acquisitions and revenue-generating portfolio CapEx during the year. As of today, we have approximately $4 million in cash and $60 million of availability under our line of credit. We encourage you to review our quarterly financial supplement posted on our website, which provides more detailed financial and portfolio information for the quarter. Our common stock dividend is $0.30 per share per quarter or $1.20 per year. And now I'll turn the program back to David.

Thank you, Gary. That was a good report, and it was a good one from Buzz and Catherine did her part as well. The team has performed very well overall in a very nice quarter indeed that we have for our shareholders. As you've heard today, in summary, during the fourth quarter, we amended and extended our bank credit facility, which is now $600 million. We issued $85 million of 5.99% senior unsecured notes in the private placement marketplace. For 2025, we acquired $206 million of industrial properties that we are gradually becoming a fully industrial real estate investment trust. We increased our industrial percentage on annual straight-line rent to 69%. And here's one you always love to hear, increased occupancy to 99.1%. That is we've got tenants, almost 100% of our stuff is leased out. Gladstone Commercial's team is growing the real estate that we own at a good pace, and the team is doing a great job managing the properties we own, especially during these challenging times. We don't have a lot of industrial property that's somehow related to the Internet or to the M&A that's going on the stock, but we certainly hope to hit some of those big numbers that are out there. My team of strong professionals continues to pursue potential quality properties on the list of acquisitions they are reviewing. We've got a good strong list of acquisitions that we're looking through. Okay. I'm going to stop here and let the operator come in and help us listen to some of the questions that people always ask us.

[Operator Instructions] Today's first question is coming from Dave Storms of Stonegate.

I wanted to start with the occupancy. It looks like occupancy remained the same, though you did lose a tenant. I was just hoping to get a little more color on what happened there.

David, nice to talk with you. Relative to the occupancy, we're at an all-time high, if you will, since 2019. We renewed a tenant and have increased our occupancy. And we -- obviously, the portfolio management team has done a great job relative to that. We see continued maintaining that occupancy. Certainly, there'll be some fluctuations as we add property or dispose of property.

Understood. I appreciate that. And then one more. I know you mentioned that you're looking to get the portfolio up to 70% industrial. You don't have a time line for that. Just curious as to what you're seeing in the transaction environment and if anything has changed now that we have a little more clarity about the incoming Fed share and the potential plans to reduce the Fed's balance sheet.

It's a very competitive market. And almost every day, you see somebody else coming into the space of triple-net. We play in the middle market and our value-add is underwriting middle market credits. We're not playing in the high range, if you will, both size as well as A-rated credits. So we are working hard at adding good properties, good tenancy focused upon the quality of the tenant and quality of the real estate, not just going for the highest return. So we're going to be very discerning as it relates to what we're going to put on our books and what we are going to chase. Well, David, if I could, relative to just thinking through it on your question, the first question, we did have a tenant with a fee we received that may be answering your question relative to the payment as well as the effect on occupancy at that point, but we did have a fee received.

Our next question is coming from John Massocca of B. Riley Securities.

Sorry if I missed this maybe earlier in the call, what's the size of the pipeline today roughly? And I guess if you think about maybe cap rates in the pipeline or how cap rates are trending, where do those stand today? And maybe where you think they're going to trend over the course of the year?

Thank you, John. And we are continually looking at somewhere in the neighborhood of $300 million in transactions. Obviously, we would love to do them all. We can't do them all. We won't do them all. Cap rates generally from where we are competing are at a floor of 7.5%. And certainly, for us, we look between 7.5% and 8.5% is realistic. But the competition is great. One of our -- again, our value add, as we always say, is our underwriting capability, plus we're able to purchase all cash. So we are also competitive in the market. It was a little slow coming out of the gate at the end of 2025 as it relates to opportunities, but we do see that picking up currently.

And maybe kind of cap rate ranges is roughly where you're kind of seeing those today for your target assets?

Going in 7.5% and up with an average cap rate north of 9%.

Okay. And then in terms of the in-place portfolio, how are you looking at kind of lease maturities over the course of the year? I know you have a relatively sizable one at the very end of the year, but anything else that's kind of noteworthy before then or even maybe in early 2027.

Sure. Happy to address that. And as mentioned previously, all the property management team, portfolio management has done a great job. We've been in contact with every tenancy that's coming due in the next 2 years. We have 8 in 2026, half for office, half for industrial. Of that, it represents a total of approximately 8% of straight-line rent. But in our discussions with the tenancy and as we have projected out with some agreements in place relative to waiting just having a signed document or their ability within their lease to just automatically have a right to exercise, we are concentrating on 2 out of those 8 because 6 of them have been, in all honesty, we believe very, very much in the barn. But we have certainly our asset in Austin, where GM is the tenant, which represents approximately 3% of our straight-line rent. It does lease mature at the end of the year. The team is in place and has -- creating a plan that we are going to work relative to leasing, of which we had 2 tours here in the coming week of approximately 50,000 square foot each. But one way or the other, that property will be taken care of. And the other is an industrial -- excuse me, office building of which we do have 2 tours as well. That lease matures at the end of 2026 and 2 full building users are touring in the next 2 weeks. As it relates to 2027, we have 14. Again, half are office, half are industrial. Of those, we are very confident that all but 3 are, for lack of a better word, perhaps not -- I don't want to say not going to happen, but we don't have the clarity we wish. But again, that only represents 1.2% of the straight-line rent of those maturities. Others, again, have the right to extend, and we have every confidence they will and have been in contact with them, but their notice date is not yet upon us, upon them, so they haven't given us notice. and we are diligently working the other small amount of approximately 85,000 square feet in 2027.

Okay. And then last one for me on the balance sheet. How are you thinking about the need for additional debt capital given some of the activity at quarter end? I mean, does that provide you think sufficient runway for what your kind of target acquisitions are for the year? Or should we be looking for any kind of additional activity in the debt markets? And I guess, how would you maybe look to spread that between either term loan debt or additional kind of private placement or even mortgage debt?

John, this is Gary. Really, the way we look at debt right now, our kind of goal is to use our revolving credit facility to acquire properties and then clean up that facility with an issuance in the private placement market. And so that's what we've done in the last 2 years. That's what we intend to do going forward. As you know, we actually have a couple of mortgages coming due. And once those -- once we pay those off, we'll then put those properties into the unencumbered pool, which will increase our availability. So right now, our liquidity is about $60 million on the credit facility that we expect to go up over time, given new properties. We have plenty of room under the facility to grow our availability. So I think right now, that's our general look on debt going forward.

[Operator Instructions] Our next question is coming from Craig Kucera of Lucid Capital Markets.

I think last quarter, you mentioned that you were working on a couple of transactions that you thought might close in the fourth quarter. Are those still in the mix? Or are those transactions you don't think you're going to execute on?

We have one that we believe we can hopefully get done by the end of this quarter. Still some diligence work to do on that. So yes, some bled over, did have one fall out. Actually, the seller pulled back on it, I believe. So we're hopeful of one and a pickup in activity into the second quarter.

Got it. And can you give us a sense of the dollar amount that might close here in the first quarter?

I would say it's in the range of $10 million.

Okay. That's helpful. And you mentioned a fee earlier. I know we had a discussion about this last quarter about some lease termination income or accelerated rent, but was that recognized here in the fourth quarter at about $1.5 million?

Yes, it was. That was a termination fee, and we had a tenant that came right in after that tenant left. So the building is occupied the same level of occupancy. So there's no loss there. And that -- yes, that was a onetime fee.

Got it. I appreciate that. Another for me. I guess just thinking about the incentive waiver, philosophically, I mean, looking at it, it looks like the Board is sort of targeting maybe a core FFO payout ratio of something around 85%, plus or minus. Is that how we should think about that? Or is there any color that you think you can give us on that?

I mean that's reasonable. I think going forward, we'd like to lower that going forward, but I think that's a reasonable assumption, yes.

Our next question is a follow-up from Dave Storms of Stonegate.

I just wanted to ask one around average lease terms. It looks like they're trickling up to the mid-7s. Is this by design? Is this something that you're seeing in the market? Maybe just any more color on that.

Sure, Dave. And obviously, the longer WALT, the better. So we do look at transactions that allow for that. It gives us more stability within the portfolio. And so yes, we will look at transactions 7 years and up, prefer 15 and up. Of course, that leads to our wheelhouse of sale-leaseback transactions. So yes, the longer we can do, the better.

Okay. Do we have any more questions?

We're showing no additional questions at this time. Mr. Gladstone, I turn it back to you for closing comments.

Thank you very much. And that was pretty puny in terms of number of questions. We like more questions from our folks out there. This really makes a meeting go faster and easier and straight to the point for all of these. So thank you all for calling in, but save up your questions for the next meeting. That's the end of this call. Thank you.